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Rating:PFPC and 529 Services Not Rated 3.0 Email Routing List Email & Route  Print Print
Wednesday, March 20, 2002

PFPC and 529 Services

Reported by Tony Pennino

PFPC may not be the king of the hill in the 529 plan marketplace, but it is certainly giving it a try. The firm is now service provider for 11 state 529 plans.

The new states under the PFPC umbrella are North Carolina, Oregon, Wisconsin, South Dakota, and Montana. These join Arizona, Colorado, Illinois, Nebraska, Nevada and South Carolina.

PFPC services in this niche include tracking for distributions, withdrawals and beneficiaries as well as account management and recordkeeping and tax reporting. The firm works in tandem with its asset manager clients. The firm contends that there are 167,000 shareholders in its combined 529 system with approximately $900 million in assets under management.

"We have been focused on this market segment for the past 24 months," Michael DeNofrio, executive vice president of shareholder services and transfer agency at PFPC. "And that is starting to pay off for us. When we are involved in the RFP process with a particular state, we go in support of a particular client. The asset manager takes the lead, and we are in the room supporting the operating and technological component of the sale."

"States are looking for flexible service providers, and we provide our clients with that flexibility," DeNofrio continued.

"We feel that the 529 market is one of terrific opportunity. We have seen a lot of sales, a lot of growth for funds, in this area. We talk to our clients about the available opportunities in 529 plans. We take on a very consultative role with them," the executive contended.

"We advise them to be creative in their approach," he added. "Look at different ways to enter the space. Investigate joint ventures or wrap products. There are tremendous opportunities. Most states have been spoken for, and it looks like there is a lock in the marketplace. But that isn't the case. States will be refining the assets they offer. They will be looking for best of breed products, for instance. 529 plans are not closed."

"We chose PFPC as our servicing partner because of the strength and flexibility of their technology," stated Timothy Clark, executive vice president at PIMCO Funds. "The administration of 529 plans is evolving as the needs of the market change. PFPC provides the robust platforms and flexible technology needed to service and distribute both in-state and national plans." PIMCO provides asset management for South Dakota.

PFPC is also a player in the Washington State RFP for its 529 plan. DeNofrio stated that some of its clients were on the shortlist in that process.

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