- Program Description
- BEST Prepaid Plan Participant Information
- Questions and Answers
Learn more about the new TNStars College Savings Program HERE.
The Baccalaureate Education System Trust (BEST) was created by the Tennessee General Assembly for the purpose of providing Tennessee families with a means to save for their children's future college education costs.
As a Qualified Tuition Program under Section 529 of the Internal Revenue Code, withdrawals are federal income tax-free for college expenses such as tuition, books, some room and board expenses, and equipment and supplies required for attendance or enrollment at an eligible educational institution.
New Weighted Average Tuition Adopted for the 2014-2015 Academic Year:
The BEST Board of Trustees convened on July 16, 2014 to set the new weighted average tuition for the 2014-2015 academic year. The new per unit payout value is $85.74 from August 1, 2014, until July 31, 2015. All units must be on a contract for at least two calendar years before they may be withdrawn.
On November 22, 2010, the Baccalaureate Education System Trust (BEST) Board of Trustees voted to stop selling new tuition units in the prepaid plan.
This action was effective immediately for payments made by check, rollovers into the prepaid plan and automatic bank account withdrawals. Additionally, payroll deductions for the November 30, 2010, payroll period was the last payroll deduction accepted by the program. No action was required by program participants to stop their automatic bank account withdrawals or payroll deductions. Our program terminated all automatic transactions and contacted payroll officers for the State of Tennessee and businesses that send payroll deductions to our program. Checks and rollovers postmarked after November 22, 2010, have been returned to the sender.
- The BEST Board of Trustees convened on July 16, 2014, to adopt the new per unit payout value for the 2014-2015 academic year. Click here to view the customer letter regarding the new $85.74 per unit payout value.
- The BEST Board of Trustees convened on November 22, 2010, and voted to stop selling new units in the plan. Click here to view the customer letter regarding the board’s actions.
What action was taken by the Tennessee Baccalaureate Education System Trust (BEST) Board of Trustees regarding the Prepaid Plan?
In its November 22, 2010, meeting, the Board voted to stop selling units in the Prepaid Plan. This action is effective immediately for contributions received by check, rollovers into the prepaid plan and automatic bank withdrawals. Checks with a postmark after November 22, 2010, will be returned to the sender. Additionally, payroll deductions for the November 30, 2010 payroll period was the last payroll deductions accepted by the program.
Why did the board vote to take this action?
As you are aware, the units that you have held with the plan appreciate in value based on the weighted average tuition increases at Tennessee’s four-year public colleges. If you have been part of the plan since its inception, you have realized an average annual return in value of more than 9 percent. At September 30, 2010, approximately 9,000 participants held more than 1.47 million units in the plan with a payout value of $96.2 million based on the current weighted average tuition. At September 30, 2010, the prepaid plan’s total assets were $99.7 million.
The prepaid plan was established to be a self-supporting plan. In other words, it was expected that investment income earned on the units you and other participants purchased would equal or outpace the annual increases in tuition rates. . Unfortunately, that has not been the case. Weak investment markets and fast-rising college costs have put tremendous financial pressure on the prepaid plan. As a result, the General Assembly has infused approximately $41 million to keep the plan financially solvent. Because the plan could place an additional financial burden on the state’s taxpayers, the BEST board determined that the optimal course of action was to limit the plan’s liabilities by stopping the sale of additional tuition units.
How does the action of the board affect my existing BEST Prepaid contract?
The action of the board only affects participants in the plan who were purchasing units in the plan. Contracts currently held with the plan will continue under the provisions of the plan.
Is the BEST Prepaid Plan Guaranteed by the Full Faith and Credit of the State of Tennessee?
The BEST Prepaid Plan is not guaranteed by the full faith and credit of the State of Tennessee. The funds in the plan are invested in accordance with an investment policy. Each year, an actuarial valuation is performed for the plan by an independent firm to determine the actuarial status of the plan. Additionally, an investment report is prepared each quarter.
What is the financial status of the prepaid plan?
At September 30, 2010, approximately 9,000 participants held more than 1.47 million units in the plan with a payout value of $96.2 million based on the current weighted average tuition. At September 30, 2010, the prepaid plan’s total assets were $99.7 million.
I mailed a check that may be received by the program after November 22, 2010. What will happen to my contribution?
Checks postmarked after November 22, 2010, were returned to the sender.
Should I take action to stop my ACH (automatic clearing house) from my bank account or my payroll deduction?
Our program terminated all ACH transactions and contacted payroll officers for the State of Tennessee and businesses that send payroll deductions to our program.
What if I want to save for my child's college education?
The State of Tennessee is in the process of creating a new college savings program.
The Tennessee Department of Treasury administers its programs free from discrimination on the basis of race, color, or national origin, and accommodations are made for individuals with limited English Proficiency.
Any person alleging discrimination based on race, color, or national origin in the administration of any Treasury programs subject to Title VI, has a right to file a complaint to the State of Tennessee Treasury Department within 180 days of the alleged discrimination.
Complaints are directed to the Human Resources Title VI Coordinator.
Treasury Human Resources
14th Floor, Andrew Jackson Building
502 Deaderick Street
Nashville, TN 37243