on his decision, Davis noted what he called “differing interpretations” of the contract changes. Not only did staff and some board members say the 6 percent rate should be applied retroactively, but Maryland 529’s former actuarial firm, Gabriel, Roeder, Smith & Co., issued reports applying the rate as such, according to the memo.
“I’m very grateful to the Treasurer, but reading his memo carefully does raise questions about how and why this board was able to do what it did,” she said.Monday that 529 prepaid account holders who made contributions before Nov. 1, 2021, will have the 6 percent earnings rate compounded monthly and applied retroactively to the date of contribution. For contributions posted on or after that date, the annual earnings rate will be equal to the 10-year Treasury note, compounded monthly.
In both cases, the rate will be effective until the benefits are withdrawn, the contract is terminated or the treasurer sets the earnings rate to zero. That last action will happen no later than July 1, 2024, when contributions to prepaid accounts will cease accruing earnings.The treasurer’s office said it will not know the total cost of its earning policy until the accounts are updated, but the money will come from the assets in the trust.
Parents who tapped their retirement accounts or encountered installment plan fees to cover tuition amid the earnings fiasco may still need to file a claim to recoup those expenses. However, the treasurer has yet to determine the criteria for the claims process, according to his office. The dispute over the earnings rate led Maryland lawmakers to hold hearings on the 529 college savings plan earlier this year.to transfer control of Maryland 529 to the treasurer. The legislation directed Davis to decide the rate of return on prepaid accounts and resolve claims brought against the trust by account holders. It