PARENTS CAN NOW GET THE MOST FOR THEIR MONEY

Missourians can start building a nest egg to pay for their children's college education through a new program called Missouri Savings for Tuition or MOST, says state Treasurer Bob Holden.

The Legislature approved the program earlier this year. It began operating a month ago. Already, over 1,000 people have put money into the savings program. The program has over $2 million in assets, Holden said Friday during a visit to Southeast Missouri State University to tout the savings plan.

He spoke to university officials and preschoolers gathered around tot-sized tables in the Child Enrichment Center on campus.

The program, developed by the state treasurer's office, is designed to take advantage of a federal law that provides a federal tax deferment on earnings from eligible tuition savings programs.

Missouri is sweetening the deal by adding significant tax advantages, said Holden.

"We've been told by tuition financing experts that Missouri's program is one of the most attractive in the nation," Holden said.

"This is strictly for education purposes," he said. The money doesn't go to state government. "This is strictly a savings program for families."

MOST allows people to put in as little as $25 to begin with, or $15 through payroll deductions.

There's no income limitations and the money can be used at most of the nation's higher-education institutions. "It is not tied to Missouri institutions," said Holden.

Here's how it works:

A person opens a MOST account under the program for a designated beneficiary such as a child or grandchild.

The amount the person puts into the account each year can be deducted from his or her state taxable income, up to a maximum of $8,000 a year. An individual can put as much as $100,000 a year into the account, but the tax savings won't exceed $8,000.

The account continues to grow through investment earnings, which are exempt from Missouri income taxes. Federal income taxes are deferred until the money is withdrawn, and then it is taxed at the student's rate which is likely to be lower than the tax rate of the account owner.

The MOST program is overseen by a six-member Higher Education Savings Program Board. The funds are managed by TIAA-CREF Tuition Financing Inc., which operates the largest pension system in the world.

A person who puts $1,000 a year into a MOST savings account for 18 years can expect to realize $40,000, Holden said. The savings would be generated from investments in stocks, bonds and money markets.

Dr. Ken Dobbins, Southeast's president, welcomed the program. He said the program's flexibility makes it far better than Ohio's savings program and would make it easier for Missourians to afford a college education.

Two Southeast employees were among the first at the university to sign up for the program.

Dr. Fred Janzow, dean of the School of University Studies, and Sandra Eichhorn, operations supervisor in the human resources office, applied following Holden's press conference.

Janzow applied on behalf of his grandchild. Eichhorn applied on behalf of her two children.

Both plan to participate in the program through a payroll deduction plan, starting on March 1.

Southeast employees will be allowed to make regular contributions of as little as $15 per account per pay period. The contributions will be withdrawn from the paychecks on a post-tax basis and the money transferred electronically to TIAA-CREF.

Missourians interested in the program can call 1-888-414-MOST.