Today, the Board of Directors for College Savings Mississippi unanimously approved rules that will apply to all new enrollments in the Mississippi Prepaid Affordable College Tuition (MPACT) program when it reopens in the fall.The rules are being submitted to the Mississippi Secretary of State’s Office where they will be posted online for public comment for the next 60 days.
Enrollment in the program was deferred by the Board in 2012 amid concerns that it could not be sustained long term given funding shortfalls. An independent actuarial audit of MPACT was ordered for the first time. It was aimed at evaluating whether the program was sustainable over the long term based on existing pricing, contract terms, and investment and expense assumptions. The pricing structure for new contracts is being analyzed by MPACT’s actuaries and will be finalized in the coming months.
“The Board’s approval of these proposed rule changes today will keep us on the road to reopen MPACT in a fiscally responsible way” said Treasurer Lynn Fitch. “The process allows College Savings Mississippi to put MPACT back onto the list of options for families planning for a college education.”
Rule changes apply mainly to new enrollments but some policy changes may affect existing contract holders. Some examples of the proposed changes are:
- The addition of a Contingent Purchaser feature. This feature will greatly reduce the administrative burden on the Purchaser’s family in the event of the Purchasers death.Contract holders can designate a “backup” contract holder to manage the account if something happens to the contract holder.This protects both purchasers and beneficiaries.
- The Annual Enrollment Period has been extended from 4 months to 9 months.
- Streamlined plan types and payment options have been created. MPACT previously offered 11 plans with 54 payment options. Some of these options were seldom used and some were not used at all. New Purchasers will choose from 6 plans with 22 payment options.
- Fees have been comprehensively studied and adjusted to reflect actual administrative costs and industry standards. Many existing fees have not been revised since 1997.
- Contract extensions will be granted for beneficiaries who delay enrollment due to military service.
“There are a number of steps to be completed before reopening the program. Filing the proposed rules continues the process. Additional meetings of the Board of Directors will address issues such as timelines and pricing,” board member Len Blanton said. “We are all committed to making sure MPACT remains a solid tool for families saving for college and cost neutral for Mississippi’s taxpayers.”
Legacy Modifications (Current Customers)
Horizon Modifications (Future Customers)