Franklin Templeton Reselected as Program Manager for New Jersey’s 529 College Savings Program

Rhea-AI Summary

Franklin Templeton has been reselected by The New Jersey Higher Education Student Assistance Authority (HESAA) as the program manager for the New Jersey Better Educational Savings Trust (NJBEST) program. This includes the NJBEST 529 College Savings Plan for New Jersey residents and the Franklin Templeton 529 College Savings Plan available nationwide. Over the past 10 years, total assets under management for NJBEST's state and national program increased by more than 57%, with the number of beneficiaries increasing by 15%. The program serves over 165,000 families nationally, managing more than 260,000 plan accounts and over $6.8 billion in assets as of June 30, 2024.

Franklin Templeton is committed to providing affordable savings options, with accounts starting at just $25. The company plans to simplify the plans to a single target enrollment year glide path and further reduce investor expenses. Both NJBEST and Franklin Templeton 529 plans rank #1 for 3-year performance according to Saving for College. Ascensus has been selected as the sub-contracted recordkeeper for the program, bringing expertise in 529 education savings administration.

Positive

• Reselection as program manager for NJBEST, indicating client satisfaction and trust
• 57% increase in total assets under management over the past 10 years
• 15% increase in the number of beneficiaries over the past 10 years
• Managing over $6.8 billion in assets across 260,000+ plan accounts
• #1 ranking for 3-year performance by Saving for College for both NJBEST and Franklin Templeton 529 plans
• Plans to simplify investment options and reduce investor expenses
• Partnership with Ascensus, a leader in 529 education savings administration

Negative

• None.

Insights

Financial Analyst

Franklin Templeton's reselection as program manager for New Jersey's 529 College Savings Program is a positive development for the company. The 20-year relationship and significant growth in assets under management (AUM) demonstrate the program's success. With $6.8 billion in AUM and over 260,000 accounts, this represents a stable revenue stream for Franklin Templeton.

The planned simplification of investment options and reduction in investor expenses could enhance competitiveness and potentially attract more participants. The #1 ranking for 3-year performance is a strong selling point. The partnership with Ascensus for recordkeeping could improve operational efficiency and user experience, potentially leading to increased customer satisfaction and retention.

Market Research Analyst

The 529 college savings market shows robust growth potential. With college costs rising, demand for tax-advantaged savings vehicles is likely to increase. Franklin Templeton's 57% growth in AUM over 10 years outpaces inflation, indicating strong market penetration. The low $25 minimum investment and state tax benefits make the plan accessible to a broad demographic, which could drive further growth.

The shift to a single target enrollment year glide path aligns with industry trends towards simplification. This, combined with reduced expenses, could enhance competitiveness in a market where cost is a key differentiator. The partnership with Ascensus, a market leader, positions Franklin Templeton to leverage technology trends in financial services, potentially attracting younger, tech-savvy investors.

Franklin Templeton has provided 529 college savings plan management for the State of New Jersey since 2003

SAN MATEO, Calif.--(BUSINESS WIRE)-- Franklin Templeton today announced its reselection by The New Jersey Higher Education Student Assistance Authority (HESAA) as the program manager for the New Jersey Better Educational Savings Trust (NJBEST) program. The program includes NJBEST 529 College Savings Plan, available directly for New Jersey residents, and Franklin Templeton 529 College Savings Plan, available to investors nationwide who are working with a Financial Professional.

Franklin Templeton has provided 529 college savings plan management for the State of New Jersey since 2003 and has seen sustained interest in the program, with significant asset and participation growth over that time. Over the past 10 years alone, total assets under management for the NJBEST’s state and national program increased by more than 57%, and the number of beneficiaries increased by a net amount of 15%. The program serves more than 165,000 families nationally, with about half residing in New Jersey. As of June 30, 2024, Franklin Templeton managed more than 260,000 plan accounts and over $6.8 billion in assets across NJBEST’s state and national plans.

“Franklin Templeton is proud of the strong relationship we have built with HESAA and the State of New Jersey over the past 20 years, and we are thrilled to continue to help families in New Jersey and across the U.S. save and invest for their children’s higher education goals,” said Sandie Palmer, Head of 529 Education Savings. “We understand the challenges families face as they plan and save to meet the rising costs of college. With Franklin Templeton’s deep expertise in 529 plans, we will be there to provide the service, support and investment expertise to guide them along the way.”

Frankin Templeton is committed to providing an affordable option for New Jersey families to save, with reduced administrative and management costs. Families can open an NJBEST account with as little as $25, and Franklin Templeton offers a range of investment options and asset allocations to best suit individual needs and risk tolerances. As part of the New Jersey College Affordability Act, eligible New Jersey residents may also receive special benefits when saving with NJBEST and Franklin Templeton, including a state tax deduction of up to $10,000¹ and a matching grant of $750 for new accounts.² The Program also offers a tax-free college scholarship of up to $6,000 for account beneficiaries.³

Franklin Templeton has continued to enhance the NJBEST and national Franklin Templeton 529 plan investment options resulting in lower shareholder costs and enhanced performance. The NJBEST and Franklin Templeton 529 plans both rank #1 for 3-year performance in the most recent analysis by Saving for College, an independent resource for parents and financial professionals.⁴ Building on changes made to the portfolio offering in 2019 and 2022, Franklin Templeton is preparing to simplify the plans from multiple age-based glidepaths to a single target enrollment year glide path and to continue to reduce investor expenses.

Late last year, Franklin Templeton conducted a competitive 529 recordkeeping search and selected Ascensus as its sub-contracted recordkeeper for the program. Ascensus is the market leader in 529 education savings administration, providing recordkeeping and administrative services to 45 education plans across 28 states and the District of Columbia, representing over $226 billion in assets under management and over 7.2 million serviced accounts.

“We have long respected Franklin Templeton and their ability to offer excellent 529 plans. Together, we both aim to help families reach their education savings goals—a mission we’re proud to partner with Franklin Templeton to achieve,” said Peg Creonte, President of Ascensus Government Savings. “Our technology and service expertise will modernize the support participants experience throughout their savings journey, allowing them to do things like enroll from their phones and send electronic payments directly to schools.”

New Jersey residents interested in the NJBEST 529 College Savings Plan may visit NJBEST.com. For more information on the Franklin Templeton 529 College Savings Plan, please visit franklintempleton.com.

About Franklin Templeton

Franklin Resources, Inc. [NYSE:BEN] is a global investment management organization with subsidiaries operating as Franklin Templeton and serving clients in over 150 countries. Franklin Templeton’s mission is to help clients achieve better outcomes through investment management expertise, wealth management and technology solutions. Through its specialist investment managers, the company offers specialization on a global scale, bringing extensive capabilities in fixed income, equity, alternatives and multi-asset solutions. With more than 1,500 investment professionals, and offices in major financial markets around the world, the California-based company has over 75 years of investment experience and over $1.6 trillion in assets under management as of July 31, 2024. For more information, please visit franklintempleton.com and follow us on LinkedIn, X and Facebook.

1. The New Jersey College Affordability Act allows for a state tax deduction for contributions into a Franklin Templeton 529 College Savings Plan of up to $10,000 per year, for those with gross income of $200,000 or less, beginning with contributions made in tax year 2022. The maximum deduction is $10,000. Because each investor’s circumstances are different, please consult your tax professional for more information about considerations that may be relevant to your particular situation
2. The New Jersey College Affordability Act allows NJ taxpayers with household adjusted gross income between $0 and $75,000 to be eligible for a one-time grant of up to $750 matched dollar-for-dollar of the initial deposit into an NJBEST or FT529 account for accounts open on or after June 29, 2021. Visit HESAA's site for terms and conditions and how to apply. This program is subject to available funding.
3. Investing in NJBEST does not guarantee admission to any particular elementary or secondary school or to college, or sufficient funds for elementary or secondary school or for college. The scholarship is only available for college and is awarded any fall or spring semester of college. The scholarship may be awarded only once to an eligible beneficiary. The NJBEST Scholarship is provided by the New Jersey Higher Education Student Assistance Authority.
4. Each quarter, Saving for College analyzes the investment performance figures for thousands of 529 portfolios and ranks the 529 savings plans. Rankings are derived using the plans' relevant portfolio performance in seven unique asset allocation categories. The asset allocation categories used are 100% Equity, 80% Equity, 60% Equity, 40% Equity, 20% Equity, 100% Fixed and 100% Short Term. The plan composite ranking is determined by the average of its performance score in the seven categories. As of June 30, 2024, NJBEST ranked #1 for Direct-sold 529 Plans 3-year performance out of 55 plans ranked, and FT529 ranked #1 for 3-year performance (including max sales charges Class A), out of 32 plans ranked.

All investments involve risk including possible loss of principal. Diversification does not guarantee a profit or protect against a loss.

The Program and its associated persons make no representations regarding the suitability of the Program’s investment portfolios for any particular investor. This material is intended to be of general interest only and should not be construed as individual investment advice or a recommendation by Franklin Distributors, LLC. Other types of investments and other types of education savings vehicles may be more appropriate depending on your personal circumstances.

Investments are not insured by the FDIC or any other government agency and are not deposits or other obligations of any depository institution. Investments are not guaranteed by the State of New Jersey, Franklin Distributors, LLC, or Franklin Templeton.

Franklin Templeton, its affiliates, and its employees are not in the business of providing tax or legal advice to taxpayers. These materials and any tax-related statements are not intended or written to be used, and cannot be used or relied upon, by any such taxpayer for the purpose of avoiding tax penalties or complying with any applicable tax laws or regulations. Tax-related statements, if any, may have been written in connection with the “promotion or marketing” of the transaction(s) or matter(s) addressed by these materials, to the extent allowed by applicable law. Any such taxpayer should seek advice based on the taxpayer's particular circumstances from an independent tax professional.

© 2024. Franklin Distributors, LLC. Member FINRA/SIPC.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240815359548/en/

Franklin Templeton Corporate Communications:

Rebecca Radosevich, (212) 632-3207, rebecca.radosevich@franklintempleton.com

Source: Franklin Templeton

FAQ

What is the minimum investment required to open an NJBEST account with Franklin Templeton?

Families can open an NJBEST account with as little as $25, making it an affordable option for New Jersey families to start saving for college education.

How much has Franklin Templeton's NJBEST program grown in the past decade?

Over the past 10 years, total assets under management for NJBEST's state and national program increased by more than 57%, and the number of beneficiaries increased by a net amount of 15%.

What benefits do New Jersey residents get when saving with NJBEST and Franklin Templeton (BEN)?

Eligible New Jersey residents may receive a state tax deduction of up to $10,000, a matching grant of $750 for new accounts, and a tax-free college scholarship of up to $6,000 for account beneficiaries.

How do Franklin Templeton's 529 plans (BEN) perform compared to other plans?

Both NJBEST and Franklin Templeton 529 plans rank #1 for 3-year performance in the most recent analysis by Saving for College, an independent resource for parents and financial professionals.