Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/251514 
Year of Publication: 
2022
Series/Report no.: 
CFR Working Paper No. 22-06
Publisher: 
University of Cologne, Centre for Financial Research (CFR), Cologne
Abstract: 
Section 529 plans have experienced tremendous growth, yet we know little about how the incentives of their sponsors (i.e., states) and program managers affect investors. We study how the incentives of these key players relate to plan characteristics. Plans where states exhibit a greater tendency to extract revenue offer investment menus with higher underlying fees, weaker performance, and limited options. In addition, their sponsors offer no other direct or indirect benefits that offset these plans' inferior investment menus. Our evidence suggests conflicts of interest faced by program managers and lack of investment sophistication of sponsoring states as likely explanations.
Subjects: 
529 plans
conflicts of interest
plan sponsor
program manager
revenue sharing
Document Type: 
Working Paper

Files in This Item:
File
Size





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.