General InformationDownload PDF Report
Michigan Education Savings Program (MESP)
The Michigan Education Savings Program is similar to other TIAA-managed 529 savings programs. The Program features an age-based option, four multi-fund options, a single fund option and a principal protection option.
- Program typeSavings
- State agencyMichigan Department of Treasury
- Program ManagerTIAA-CREF Tuition Financing, Inc.
- Program distributorTIAA-CREF Individual & Institutional Services, LLC
- Manager contract termUNLOCK PRO
Ratings & Rankings
Our overall rating for non-residents
This is an excellent program with many benefits for the participant and positive investment attributes. If it has any significant weaknesses then it also has some particularly good things to recommend it.
Each plan's performance score is developed directly from Savingforcollege.com's Quarterly 529 Performance Rankings. A 529 savings plan must have at least one year of performance history before they will be assigned a 5-cap rating. For those plans that are not part of our quarterly performance rankings, such as plans offering a single set of bank-based investment options, we assign a performance score by evaluating the returns currently available on similar types of investments outside of 529 plans.
State residency requirements:None
Who can be a participant/owner in the program?U.S. citizens and resident aliens, UGMA/UTMA custodians, estates, trusts, 501(c)(3) organizations, corporations, and state or local government agencies and instrumentalities.
Significant time or age restrictions imposed by the program:None
Maximum contributions:Accepts contributions until all account balances in Michigan's 529 plan for the same beneficiary reach $500,000.
Minimum contributions:$25, or $15 per pay period via payroll deduction.
Age-based investment options:The Age-Based Option is offered in 3 different risk levels (Aggressive, Moderate, and Conservative), each containing 9 portfolios of underlying mutual funds. Contributions are placed into the portfolio corresponding to the beneficiary's age and later reassigned to more conservative portfolios as the beneficiary approaches college age.View more age-based investment options
Static investment options:Select among 4 multi-fund options (the International Equity Index Option, the Global Equity Index Option, the 100% Fixed Income Option, and the Balanced Option), the U.S. Equity Index Option and the Principal Plus Interest OptionView more static investment options
Underlying investments:TIAA-CREF institutional mutual funds and one Vanguard index fund. The Principal Plus Interest Option is invested in a funding agreement with TIAA-CREF Life Insurance Company that guarantees principal and a minimum annual rate (actual rate is declared annually).View a full list of this plan's investment options
Underlying fund allocations:UNLOCK PRO
Portfolio Fees & Performance LookupUNLOCK PRO
Fees & Expenses
Enrollment or application fee:None.
Account maintenance fee:None.
Program management fees:0.02% manager fee plus 0.05% state fee. No fee for the Principal Plus Interest Option.
Expenses of the underlying investments:0.06% - 0.17%. None for the Principal Plus Interest Option.
Total asset-based expense ratio:0.12% - 0.24%. None for the Principal Plus Interest Option.
Taxes and other Benefits
- Tax deduction for single filers$5,000/yr
- Tax deduction for joint filers$10,000/yr
Married filing jointly residents contributing $100/month can expect an additional $0 a year in tax savings.
Program match on contributions:Michigan matching grants based on MESP contributions were discontinued for the 2009-2010 year. In prior years, a Michigan resident with adjusted gross income of $80,000 or less and a beneficiary under seven years old could apply for a one-time matching grant of $1 for every $3 contributed, up to a maximum $200 grant.
State tax deduction or credit for contributions:Contributions to a Michigan's 529 savings plan of up to $5,000 per year by an individual, and up to $10,000 per year by a married couple filing jointly, are deductible in computing Michigan taxable income. Contributions must be reduced by qualified withdrawals during the year for purposes of determining the amount that may be deducted. Rollover contributions are not deductible, according to the Michigan Department of Treasury. Contribution deadline is December 31.
State tax recapture provisions:The principal portion of nonqualified withdrawals from this plan are included in Michigan taxable income to the extent of prior Michigan tax deductions. Qualified rollovers are not subject to recapture.
State tax treatment of qualified distributions:Qualified distributions from Michigan and non-Michigan 529 plans are exempt. Also excluded are distributions made due to the beneficiary's death, disability, scholarship, or attendence at one of the U.S. military academies.
State tax treatment of rollovers:Michigan follows federal tax-free treatment.
Does the sponsoring state exclude the value of an account for state financial aid purposes?Yes
Does participation in the program provide beneficiaries with any advantages in qualifying for resident tuition status at state institutions?No
Does the program have a formal agreement with a rewards program or outside scholarship program?No
Statutory protection of an account from creditors:UNLOCK PRO
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Alternative 529 Plans
The Maine NextGen College Investing Plan -- Client Direct Series is available through Merrill Edge. The plan utilizes BlackRock (including iShares) funds in its age-based and static options. In addition, the Principal Plus Portfolio and the NextGen Savings Portfolio are available.
Why we like this plan
- Strong long-term performance
- Low fees
- Matching Grants for qualifying accounts