Vanguard will manage state college fund

Vanguard Group Inc., the highly regarded mutual fund company known for its low fees, has been selected by the state of Hawaii to be the investment manager of the state's 529 college savings program.

Upromise Investments Inc. will serve as the plan's program manager.

The program, previously called TuitionEDGE, will now be called HI529 -- Hawaii's College Savings Program.

Previously, the program was managed by Delaware Investments, with Delaware Investment Advisers as the investment manager.

The 529 college savings program, established under Section 529 of the Internal Revenue Code, allows withdrawals to be exempt from federal and Hawaii state income taxation, provided that the withdrawals are used for qualified tuition expenses.

"Hawaii's college savings program can help reduce the financial burden placed on families looking to provide their children with a college education," Lt. Gov. James "Duke" Aiona said yesterday.

The state said Upromise Investments and Vanguard are implementing a number of improvements to the program.

HI529 participants can choose from a variety of investments tailored to their needs, including one age-based option, five fixed-asset allocation options, and a money market portfolio.

In addition, all investment options will have a 0.75 percent management fee and a $20 annual account fee. Under Delaware Investments, the management fee was 0.95 percent of assets and the annual account fee was $25, which was waived if the account balance exceeded $10,000 or the account owner or beneficiary was a resident of Hawaii.

For more information, call toll-free 1-866-529-3343, or visit www.hi529.com.