New York issues RFP for 529 program manager
The state plans to award the contract and have any transition completed by August 28, 2011. The term of the new contract will be 7 years. The same firm will manage both the Direct and Advisor plans, which as of the end of 2009 had combined assets of over $9 billion.
The RFP specifies that its 529 plan must have both age-based and standalone investment options including an international option that cannot be part of the age-based option, and a lower-cost low-risk option like a money market.
Bidders must propose a constant program manager fee so that the overall expense ratio of each option varies based on the underlying investments. The state will charge the program manager a very low administrative fee of 1.25 basis points (.0125 percent).
This RFP has been one of the most anticipated in the last couple of years because the current and potential size of the plan is substantial.