SALT LAKE CITY — When Aaron Pond was looking a year ago for a way to save for his first child's future, he chose a plan with a good reputation that would give him a tax break. When baby No. 2 came in December, he chose the Utah Educational Savings Plan again.
"I went the student loan route (when I was in college), and it would've been nice to have funds available at least to help, so I wanted to do that for my kids," he said.
Pond should know what he's talking about: He's an accountant.
If you're not already putting money away for your kids or grandkids or nieces and nephews to go to college, this weekend could be a good time to start. The UESP is offering a $25 match for any account opened online Friday or Saturday at uesp.org as part of its annual 5/29 promotion.
Qualified plans, which fall under section 529 of the tax code, are convenient vehicles for long-term college savings — and Utah has one of the best. The UESP, set up by the state Legislature in 1996, is consistently ranked highly by financial publications and advisers.
The plan now manages more than $3.3 billion in assets in roughly 159,000 accounts. And while the number of new participants has leveled off since 2007, with the economic downturn, people in the plan are still making steady contributions, according to executive director Lynne Ward.
She attributes UESP's success to its flexibility and low fees. Many other states contract out their 529 plans to for-profit private investment companies, but in Utah the middleman gets cut out.
"In our case, we exist to help families save for college," Ward said. "We're not trying to nickel-and-dime people."
UESP offers 12 options, ranging from aggressive, all-equities plans to an FDIC-insured Zions Bank savings account. A new choice added this year allows a customized investment strategy — what Ward calls a "buffet" of the other 11 plans.Comment on this story
Earnings grow tax-deferred and are tax-free when used for educational expenses. Utah taxpayers also can claim a 5 percent tax credit up to $1,710 per beneficiary on contributions.
Ward said the most popular options are those that start out in stocks and move more into bonds with time to become safer as the child approaches college age.
While some people are skittish about investing amid the stock market's recent turbulence, most are looking past that to the distant future, Ward said.
"The volatile economy has shown that you're in a better position to get or keep a job if you have a college degree or vocational training," she said.