As part of the SBI's Participant Directed Investment Program, the SBI is responsible for the investment oversight of two State Sponsored Savings Programs, the Minnesota College Savings (529) Plan and the Minnesota ABLE (529A) Plan.
Established by the Minnesota Legislature in 1997, the Minnesota College Savings Plan is an education savings plan designed to help families set aside funds for future college costs. The SBI is responsible for investments and the Minnesota Office of Higher Education (OHE) is responsible for the overall administration of the Plan.
Minnesota College Savings Plan Website
The SBI and OHE have contracted jointly with TIAA-CREF Tuition Financing, Inc. (TFI) to provide administrative, marketing, communication, recordkeeping and investment management services for the Plan.
The Minnesota College Savings Plan investment options are divided into three categories: Enrollment Based Managed Allocation Option, Risk Based Allocation Option, and Static Options (or Asset Class Based Allocation Options).
Minnesota College Savings 529 Plan Investment Options
The Enrollment Year Investment Option is a set of single fund options representing the date your future student needs their college savings. The asset allocation adjusts automatically to a more conservative investment objective and level of risk as the enrollment year approaches.
The Risk Based Allocation Option offers three separate allocation investment options - Aggressive, Moderate, and Conservative, each of which has a fixed risk level that does not change as the Beneficiary ages.
The Static Options (Asset Class Based Options are:
- U.S. LARGE CAP EQUITY INDEX - A passive domestic stock portfolio that tracks the S&P 500.
- INTERNATIONAL EQUITY INDEX - A fund that passively invests in a mix of developed and emerging market equities. The fund is expected to track a weighted benchmark of 80% MSCI ACWI World ex USA and 20% MSCI Emerging Markets Free Index.
- U.S. AND INTERNATIONAL EQUITY INDEX - A fund that invests in a mix of equities, both U.S. and international, across all capitalization ranges and real estaterelated securities. The fund is expected to track a weighted benchmark of 60% Russell 3000, 24% International, 6% Emerging Markets, and 10% Real Estate Securities Fund.
- PRINCIPAL PLUS INTEREST OPTION - A passive fund where contributions are invested in a Funding Agreement issued by TIAA-CREF Life. The funding agreement provides for a return of principal plus a guaranteed rate of interest which is made by the insurance company to the policyholder, not the account owners. The account is expected to outperform the return of the 3-month T-Bill.
- EQUITY AND INTEREST ACCUMULATION - A fund that passively invests half of the portfolio in U.S. equities across all capitalization ranges and the other half in the same Funding Agreement issued by TIAA-CREF Life as described above. The fund is expected to track a weighted benchmark of 50% Russell 3000 and 50% 3-month T-Bill.
- 100% FIXED INCOME - A fund that passively invests in fixed income holdings that tracks the Bloomberg Barclays U.S. Aggregate and two active funds that invest in inflation-linked bonds and high yield securities. The fund is expected to track a weighted benchmark of 70% BB Barclays Aggregate, 20% inflation-linked bond, and 10% high yield.
- MONEY MARKET - An active fund that invests in high-quality, short-term money market instruments of both domestic and foreign issuers that tracks the iMoneyNet Average All Taxable benchmark.
The Minnesota ABLE Plan (Achieving a Better Life Experience) was established to encourage and assist individuals and families to save for the purpose of supporting individuals with disabilities to maintain health, independence, and quality of life.
Minnesota ABLE Plan Website
The SBI is responsible for the investment oversight and the Commissioner of the Minnesota Department of Human Services (DHS) is responsible for the overall administration of the Plan.
The SBI and DHS have contracted jointly with Ascensus to provide administrative, recordkeeping and investment management services.
Minnesota is one of 18 states in the National ABLE Alliance Program, which is a coalition of States that has partnered to share a Program and Program Manager, while maintaining Member State independence.
The Minnesota ABLE Plan offers seven investment options; six are Target Risk-Based Options and one is a Checking Account Option. Each of the six Target Risk-Based Options seek to meet a specific investment goal and risk tolerance by investing in multiple underlying investment funds.
Minnesota ABLE Plan Investment Options
The aggressive option seeks to provide long-term capital appreciation with very low income potential. This option has a mixed allocation of 90% stocks and 10% bonds.
The moderately aggressive option seeks to provide long-term capital appreciation with low income potential. The investments are allocated 75% in stocks and 25% in bonds.
The growth option seeks to provide capital appreciation and low current income. The investments are allocated 60% stocks and 40% bonds.
The moderate option seeks to provide capital appreciation and secondarily provide moderate current income. The investments are allocated 45% stocks and 55% in bonds.
The moderately conservative option seeks to provide moderate current income and low capital appreciation. The investments are allocated 30% stocks, 45% bonds, and 25% cash.
The conservative option seeks to provide substantial capital preservation, limited current income and very low capital appreciation. The investments are allocated 10% stocks, 30% bonds and 60% cash.
The Checking Account Option seeks to provide preservation of principal. It invests 100% of its assets in an FDIC-insured checking account.