Glitches in transfer of 529 college savings plans are resolved, state says

The Illinois treasurer’s office now says that transferring the state’s 529 Bright Start college savings plan to a new administrator resulted in technical problems that kept families from accessing their accounts.

But all glitches have now been repaired, said Paris Ervin, spokesman for Treasurer Michael Frerichs.

On Friday, the state treasurer’s office said there had been no technical issues with the transfer even though some families said they were struggling to access their accounts. At the time, the treasurer’s office said the families reporting problems did not have their account numbers on hand and, as a result, had trouble changing their passwords when logging into the new system.

On Tuesday, the treasurer’s office said the new administrator of the plan — Union Bank & Trust Co. — identified three technical problems in the new system that were keeping people from withdrawing money.

Changes were made to the system Saturday that resolved the problems, and there have been no new complaints since Saturday, Ervin said Tuesday. Based on requests for help, Ervin said about 150 account holders had trouble withdrawing funds before the glitches were resolved.

About 3,000 successful withdrawals have been made, including 2,000 online, Ervin said.

This is a busy time of year for withdrawing college savings because families must make fall tuition payments. Students often are not allowed to register for classes or move into dormitories if tuition hasn’t been paid.

Ervin said she does not think the glitches existed long enough to keep people from paying tuition on time. The state began using the new administrator on July 17.

In June, Frerichs announced the state was moving management contracts for Illinois 529 plans from Oppenheimer OFI Private Investments to Union Bank & Trust Co. The state previously had three options for 529 college savers and was combining them into two, as well as reducing fees and adding funds, he said.

“We have successfully transitioned over 300,000 college savings accounts,” Ervin said.

State-run 529 plans allow people to put away money for college and avoid paying taxes on any money withdrawn to pay for college.

Twitter @gailmarksjarvis

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via Business – Chicago Tribune

July 25, 2017 at 12:18PM

Glitches in transfer of 529 college savings plans are resolved, state says

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