2014ANNUAL REPORT TABLE OF CONTENTS
About Our Founder 1 Chairman’s Message 2 Florida Prepaid College Board 4 Florida Prepaid College Plans 6 Florida 529 Savings Plan 12 Financial Summary 15 Board Members 18 Service Providers 20 ABOUT OUR FOUNDER, MR. STANLEY G. TATE
Mr. Stanley G. Tate was instrumental in the creation and early development of the Florida Prepaid College Program. It was his vision to provide Florida families with an affordable means to save for their children’s future college education. Mr. Tate served tirelessly as Board Chairman from 1987 to 2005. In recognition of Mr. Tate’s service, Governor Jeb Bush signed House Bill 263 into law on June 26, 2006, renaming the program the Stanley G. Tate Florida Prepaid College Program.
Highlights of Mr. Tate’s leadership include:
• More than 58,000 tuition and dormitory contracts sold in the first year. • In 1989, two years ahead of schedule, Mr. Tate presented the State of Florida a check for $600,000, repaying a start-up loan made by the Legislature to help launch the program. From that point forward, the program has remained fully self-supporting. • In 1990, the Florida Legislature created the Stanley Tate Project STARS scholarship program to be administered by the Stanley G. Tate Florida Prepaid College Foundation. Project STARS helps economically disadvantaged students who are at risk of dropping out of school by providing them with the opportunity for a college education. • In 2002, under Mr. Tate’s leadership, the Board created the Florida 529 Savings Plan to provide families another way to save for college tuition, fees, housing and other college expenses. • At the Florida Cabinet meeting on November 8, 2005, Governor Jeb Bush and the Florida Cabinet issued a resolution recognizing Mr. Tate’s exemplary record of professional and dedicated service to the families and children in Florida. • While Mr. Tate served as Chairman of the Board, more than 1 million Prepaid Plans were purchased, and more than 142,000 children used their plan benefits to attend a college or university. In addition, 15,472 scholarships were awarded to Stanley Tate Project STARS students, helping Florida’s children build a better future through a college education. Ase w move past our 25th anniversary, we thank Mr. Tate for his extraordinary dedication and commitment to public service. The Board is excited to carry on the program’s strong tradition and Mr. Tate’s vision for the next 25 years and beyond.
11 CHAIRMAN’S MESSAGE
n the heels of its 25th anniversary year, the mission of the Florida Prepaid OCollege Board remains as important as ever: to help Florida families save for future higher education expenses by providing cost-effective, financially sound college savings programs. Today we are the largest, most successful and longest continuously running prepaid college tuition program in the nation. In many ways our mission is even more important today than when we first began, given the rising costs of tuition and increasing concerns over student loan debt.
I am honored, therefore, to present the Florida Prepaid College Board Annual Report for the fiscal year ending June 30, 2014. It is a testament to our success in helping families provide their children with the lasting gift of a college education. More than 1.6 million Prepaid Plans have been purchased since the Stanley G. Tate Florida Prepaid College Program was introduced over a quarter century ago.
Here are a few additional highlights:
• M ore than 378,000 students have attended college using Prepaid Plans.
• More than 131,000 students attended college during the Academic Year 2013/2014.
• Approximately 20,000 students are using the benefits of their Prepaid Plans at a private, out-of-state or technical school.
The Florida 529 Savings Plan, launched in 2002, also continues to grow each year – offering families another way to save for future higher education expenses. Our Florida 529 Savings Plan has been ranked among the best performing college savings plans by both Morningstar and SavingforCollege.com.
2 Here are a few additional highlights:
• M ore than 39,000 active Florida 529 Savings accounts.
• M arket value increased more than $71 million (up 23%) from 2012/2013 to 2013/2014.
• 49% increase in new accounts opened from 2012/2013 to 2013/2014.
On average, students in Florida leave college today with more than $24,000 in student loan debt. That debt becomes a financial hindrance for years to come and is a reminder of why saving for college is so vitally important for future generations.
Ase w reflect in this annual report upon the successes of the past year, we eagerly accept the challenge and opportunity to continue providing expanded and affordable college savings plan options.
3 ABOUT THE FLORIDA PREPAID COLLEGE BOARD
The Florida Prepaid College Board is an agency of the State of Florida. The seven members who make up the Board are appointed and serve on a volunteer basis. They are responsible for establishing policy and monitoring performance for the Florida Prepaid College Plan and Florida 529 Savings Plan. The Executive Director and staff manage the day-to-day operations of the Board and its programs. The Board’s first priority is always the safety of the money entrusted to it by Florida families. Saving for college is one of the most important investments a parent or grandparent can make for a child. The Board is committed to helping Florida families save for one of the most important aspects in their children’s lives – receiving a college education.
The Florida Prepaid College Board is committed to helping Floridians save for future MISSION qualified higher education expenses by providing a cost-effective, financially sound Prepaid College Plan and other college savings programs. STATEMENT
THE IMPORTANCE OF SAVING FOR HIGHER EDUCATION Though future college costs are uncertain, you are doing a smart thing by planning ahead, and there are several important reasons why you should start saving today:
Education Pays: Today, individuals with a bachelor’s degree earn an average of $23,700 a year more than those with only a high school diploma. In fact, a recent Georgetown University study estimates that a student with a bachelor’s degree can earn $1.6 million more in their lifetime than a student with only a high school diploma.
Higher Employment: It’s projected that by 2018, 59% of jobs in Florida will require post-secondary education. In 2013, the unemployment rate for bachelor’s degree holders was 4%. For those with only a high school diploma, it was 7.5%.
Peace of Mind: Knowing that your child will have something set aside can help you avoid the stress that others experience when high school graduation is right around the corner.
Avoiding Debt: Student loans are now the #2 source of debt in America, behind only mortgages. Planning now will help your child to begin life after college without this burden, effectively jump-starting their career.
Time: The earlier you start saving, the more opportunity you have to spread your payments and lower the monthly contribution necessary to reach your savings goals. 4 WHAT OUR CUSTOMERS ARE SAYING
Florida Prepaid is a benefit of living in Florida – no other state has a college savings plan that KIM FIELDS, is comparable. who purchased a 4-Year Florida University Plan
ELIZABETH STEVENS, I just wanted the peace of mind of knowing their mother of two Prepaid college tuition is taken care of and that I don’t have to Plan beneficiaries worry about it.
We both came out of college without any loan LAURA CLARK, debt, and that was important for us that the boys who purchased 2 + 2 experience the same. So for all of us, the stress is Florida Plans for her gone. This was a huge relief. sons, age 7 and 4
Graduating from college with no debt was such a REBECCA SHEFFIELD, huge burden avoided, and it helped me start out in the who purchased a 2 + working world on more solid footing than many of my 2 Florida Plan for her peers. It was a no-brainer for me to do the same for my 10-month old daughter daughter.
Some of life’s events you just can’t plan for, but COLE DAVIS, because of Florida Prepaid, I never worried about Prepaid Plan beneficiary paying for college. attending Florida State University
5 FLORIDA PREPAID COLLEGE PLANS
The Florida Prepaid College Board has offered families an affordable and secure way to save for tuition and most fees, and dormitory housing at Florida’s 12 State Universities and 28 Florida Colleges, for more than 25 years. The Florida Prepaid College Plan is guaranteed by the State of Florida§. The value of a Prepaid Plan may be transferred to most private and out-of-state colleges and select technical schools.
SECURE INVESTMENTS A conservative investment strategy is used for Prepaid Plans, with customer payments invested based on a Comprehensive Investment Plan, which is structured to ensure the Board’s obligations for tuition, the tuition differential fee, local fees and dormitory costs, as applicable, are met. The Board has adopted an asset allocation policy which limits the amounts of equities to 15 percent of the market value of the total portfolio, or the most current actuarial reserve balance as determined by the Board’s actuary, whichever is less. Fixed income investments include U.S. Treasuries, asset-backed securities and corporate bonds. Equity investments include large capitalization growth, large capitalization value, small capitalization core, mid capitalization core, international developed market and S&P 500 index stocks.
2013-2014 OPEN ENROLLMENT * Open Enrollment for the Florida Prepaid College Plan was November 1, 2013 through February 28, 2014. * Website visits totaled more than 482,241. * A total of 15,803 plans were purchased, 12,788 of which were for new student beneficiaries. * With the close of the 2013-2014 enrollment period, the total number of children and students enrolled in the Florida Prepaid College Plan has grown to almost 1,026,000. Hispanic 24.7% African American DIVERSITY 8.0% We are pleased to report that minority participation Asian continues to increase in the Florida Prepaid College Plan. 7.1% Minorities represent 45 percent of the families enrolling Native American in 2013-2014. Since Florida Prepaid’s inception, 27 0.3% percent of Prepaid families have been minorities.
Caucasian 54.7% Other 5.2% 6 §Financially guaranteed by state of Florida. Section 1009.98(7) Florida Statutes. PLAN OPTIONS FOR THE 2013-2014 ENROLLMENT PERIOD
For the 2013-2014 enrollment period, families were offered the 2013-2014 Prepaid choice of four Florida Prepaid College Plans: the 2-Year Florida Tuition Plans Sold College Plan, the 4-Year Florida College Plan, the 2 + 2 Florida 2 + 2 Plan and the 4-Year Florida University Plan. These plans combined 15.8% tuition and most required fees. 4-YR UNIV 35.5% In addition to the Prepaid Plans, the Board offered plans such as the Tuition Differential Fee Plan and the Local Fee Plan to cover required fees to supplement previously purchased tuition plans. In addition, the University Dormitory Plan was offered to new 4-YR FC and previous purchasers of a 2 + 2 Florida Plan or a 4-Year 22.0% University Plan. 2-YR FC 26.7%
Q&A Favorite time in a child’s life to buy a Florida Prepaid College Plan? Newborn babies, infants and one-year-olds received 40 percent of the Prepaid Plans purchased in 2013-2014. Saving early is a growing trend, with 27 percent of the plans purchased for children one-year-old or younger since 1988.
Most popular way to pay? 73 percent of families chose to make monthly payments until the child is expected to enroll in college. Another 14 percent selected monthly payments over five years and 13 percent of families made a single lump-sum payment.
Most likely to buy a Florida Prepaid College Plan? Parents remain the most frequent purchasers since Prepaid Plans were first offered in 1988. Parents comprised 86 percent of the purchasers in 2013-2014, with grandparents purchasing another 12 percent and the remaining 2 percent bought by relatives and others.
Most popular Prepaid Plan? Purchasing a 4-Year Florida University Plan was the choice of 35 percent of families in 2013-2014. Another 22 percent of families purchased the 4-Year Florida College Plan. The 2 + 2 Florida Plan garnered 16 percent of Prepaid Plan sales and 27 percent purchased the 2-Year Florida College Plan.
7 EVERY COUNTY IN FLORIDA HAS CHILDREN WITH A FLORIDA PREPAID COLLEGE PLAN
CUSTOMERS BY COUNTY - CUMULATIVE
North Florida: 15.1% Central Florida: 34.5% South Florida: 50.4% Alachua 11,805 Brevard 26,881 Broward 132,026 Baker 649 Citrus 4,254 Charlotte 4,185 Bay 4,932 Hernando 5,548 Collier 11,108 Bradford 613 Hillsborough 67,061 De Soto 520 Calhoun 289 Indian River 5,880 Glades 100 Clay 9,439 Lake 10,264 Hardee 541 Columbia 1,725 Levy 983 Hendry 775 Dixie 202 Marion 9,368 Highlands 2,510 Duval 34,329 Orange 45,189 Lee 20,143 Escambia 7,510 Osceola 5,797 Manatee 11,612 Flagler 2,702 Pasco 19,571 Martin 9,765 Franklin 192 Pinellas 50,490 Miami-Dade 147,985 Gadsden 1,381 Polk 17,189 Monroe 4,295 Gilchrist 337 Seminole 25,187 Okeechobee 1,028 Gulf 337 Sumter 1,530 Palm Beach 84,677 Hamilton 160 Volusia 18,547 Saint Lucie 10,142 Holmes 261 TOTAL 313,739 Sarasota 13,578 Jackson 1,326 TOTAL 457,990 Jefferson 652 Lafayette 144 Leon 20,632 Liberty 294 Madison 442 Nassau 2,603 Okaloosa 6,228 Putnam 1,973 Saint Johns 14,691 Santa Rosa 5,736 Suwannee 969 Taylor 508 Union 338 Wakulla 1,640 Walton 1,169 Washington 550 TOTAL 136,758
8 (This does not include recipients of Foundation scholarships or families who moved out of state.) SENDING STUDENTS OFF TO COLLEGE
The opportunity for a child to go to college is enhanced when parents or grandparents save for college. One of the ways to ensure that opportunity is by saving with a Prepaid Plan. A Prepaid Plan prepays the costs of tuition (and most mandatory fees) at the time the student enrolls in a State University or Florida College. Should the student decide to go to a private or out-of-state college, the full value of the Plan (what would be paid by the Board to a State University or Florida College for that student) can be transferred to the private or out-of- state college. During the 2013 fall semester, 110,375 students throughout the U.S. were using Prepaid Plan benefits to pursue higher education. Most Prepaid Plan students, 56,407 of them, attended State Universities. Another 34,189 attended Florida Colleges and 17,679 attended private, out-of-state or technical schools.
Prepaid Plan Usage - Fall 2013 Total: 110,375 Students
Florida Colleges 31.0%1
Out-of-State Colleges 10.3%
Private Florida Colleges 5.1%
Florida Technical Florida State Centers Universities 0.6%2 51.1 % Scholarships/ Reimbursements 1.9%3
1Includes students taking upper division level classes at a Florida College. 2Includes students enrolled at an approved technical center in Florida and students enrolled in technical education courses offered by a Florida College. 3Includes scholarship refunds and qualified account owner reimbursements for enrolled students.
9 2
38 16 27 19 40 34 15 9 29 7 10
21 37 25
3 4
22 13
28 36 18 5 20 33 11 39
24 26 23
12
35 17 31 30
1
6 32 14
FLORIDA UNIVERSITIES & THE FLORIDA 8 PREPAID COLLEGE PLAN
Florida’s public universities received approximately $93 million in Florida Prepaid College Plan tuition and fee payments for 56,407 students in Fall 2013.
STUDENTS WITH PLAN PAYMENTS STATE UNIVERSITIES PREPAID PLANS TO UNIVERSITY ($)
29 Florida&M A University 645 1,106,486
30 Florida Atlantic University 4,471 6,937,553
31 Florida Gulf Coast University 3,128 5,277,163
32 Florida International University 5,587 8,724,320
33 Florida Polytechnic University* N/A N/A
34 Florida State University 10,864 18,249,314
35 New College of Florida 219 515,783 36 University of Central Florida 10,366 16,670,810 37 University of Florida 10,954 18,768,545 38 University of North Florida 2,786 4,403,929 39 University of South Florida 6,124 10,338,644 40 University of West Florida 1,263 2,017,713
TOTAL 56,407 $ 93,010,260 10 * No invoices have been paid to date. FLORIDA COLLEGES & THE FLORIDA PREPAID COLLEGE PLAN
Institutions in the Florida College System received approximately $30.9 million in Florida Prepaid College Plan tuition and fee payments for 34,189 students in Fall 2013.
STUDENTS WITH PLAN PAYMENTS FLORIDA COLLEGES PREPAID PLANS TO COLLEGES ($)
1 Broward College 3,140 2,697,837 2 Chipola College 122 125,185
3 College of Central Florida 429 373,595
4 Daytona State College 859 805,427
5 Eastern Florida State College 1,084 1,006,976
6 Edison State College 906 852,123
7 Florida Gateway College 180 171,596
8 Florida Keys Community College 118 122,880
9 Florida State College at Jacksonville 2,069 1,787,397
10 Gulf Coast State College 294 257,470
11 Hillsborough Community College 2,037 1,885,640
12 Indian River State College 1,233 1,071,173
13 Lake-Sumter Community College 308 284,305
14 Miami-Dade College 3,906 3,722,385
15 North Florida Community College 83 82,597
16 Northwest Florida State College 280 289,537
17 Palm Beach State College 2,847 2,369,601
18 Pasco-Hernando State College 698 676,183
19 Pensacola State College 534 479,341
20 Polk State College 555 515,073
21 Santa Fe College 2,148 1,797,540
22 Seminole State College 1,271 1,142,036
23 South Florida State College 154 151,635
24 St. Petersburg College 2,489 2,263,993
25 St. Johns River State College 462 434,885
26 State College of Florida Manatee-Sarasota 801 768,365
27 Tallahassee Community College 2,012 1,979,817
28 Valencia Community College 3,170 2,749,679 TOTAL 34,189 $ 30,864,271
11 FLORIDA 529 SAVINGS PLAN
The Florida 529 Savings Plan offers families a flexible means to save for their children’s college education. Families can save at a pace that meets their budget, allowing them to decide how much money to put into a college savings account. Families can open a Florida 529 Savings Plan account for as little as $25 per month through automatic withdrawals from a checking or savings account, or a lump-sum payment of $250. With 11 investment options, families can decide how they want to invest their funds.
Earnings on the investments are tax-free when used for any qualified higher education expense such as tuition, fees, room and board, books and even gradu- ate or professional school. The Florida 529 Savings Plan can be used at almost any public or private university, community college or technical school anywhere in the United States. The Savings Plan can also be used by adults returning to col- lege for graduate school or professional certification.
As of June 30, 2014, there were 39,287 active Florida 529 Savings Plan ac- counts. The total market value of the Florida 529 Savings Plan was more than $380.2 million as of June 30, 2014, up $71.2 million from the previous year. The average account balance was $9,755.
Introduced in 2002, the Florida 529 Savings Plan is an alternative 529 plan to the Florida Prepaid College Plan. Families can participate in one or both plans, depending on what fits their budget and their college goals for their children. More than 54 percent of families with a Florida 529 Savings Plan also have a Florida Prepaid College Plan and 91 percent are Florida residents.
Unlike the Florida Prepaid College Plan, the Florida 529 Savings Plan exposes the account owner to investment risk. There is no guarantee that the value of the investment will grow. The account owner could lose all or a portion of the money invested. Potential account owners are given the Florida 529 Savings Plan Program Description and Participation Agreement, which discloses the potential risk of an account.
LOW FEES The Florida 529 Savings Plan charges no commission or sales fees. There is an annual administrative fee, which is 3/4 of one percent (75 basis points or 0.0075) of the account balance.
12 DEMOGRAPHICS SINCE INCEPTION Information is self-reported at the time of enrollment. Not all enrollees participated.
Account Owners Minorities Hispanic Grandparents 15.4% 11.5% Other African Relative American 2.4% 6.2% Self 0.8% Asian 5.5% Other 0.8% Caucasian 68.3% Other Parents 4.4% 84.5% Native American 0.2%
Family Income $50k - $70k 14.1%
Less than $50k 12.5%
Over 70K 73.4%
Q&A Who can establish an account in the Florida 529 Savings Plan? Anyone, including parents, grandparents, other relatives and friends, can open an account. Individuals can even open an account to save for themselves to pursue an additional degree or certification to advance their career. The account owner and beneficiary (student) do not have to be Florida residents.
I have a Florida Prepaid College Plan. Why should I sign up for the Florida 529 Savings Plan? The Florida 529 Savings Plan offers a way to save for extra expenses not covered by a Florida Prepaid College Plan, including books, off-campus housing and the additional costs of most private and out-of-state colleges and graduate or professional schools.
What is the most popular investment option? Many families choose the Age-Based/Years to Enrollment Portfolio, which automatically adjusts the level of investment risk to match the child’s age, so the investment risk is higher when the child is young and the risk is lowered automatically as the child gets closer to enrolling in college.
13 $1k-$9,999 Dollars Invested 50.02% By Customer as of June 30, 2014 Average Account Balance = $9,755 $10k-$24,999 14.79%
$25k-$99,999 7.14%
Less than $1k $100k + 26.71% 1.34% There is a minimum contribution of $250 required to open an account, or the account owner may authorize contributions of at least $25 per month. After that, the account owner decides how much and how often to contribute, up to the current maximum account limit of $418,000.
FLORIDA 529 SAVINGS PLAN ANNUAL PERFORMANCE SUMMARY
July 1, 2013 - June 30, 2014
PORTFOLIO OPTIONS GROSS INVESTMENT RETURNS Age 0 - 4 / 14 or More Years to Enrollment 27.76% Age 5 - 8 / 10 -13 Years to Enrollment 21.83% Age 9 - 12 / 6 - 9 Years to Enrollment 15.88% Age 13 - 15 / 3 - 5 Years to Enrollment 10.12% Age 16 & Above / 0 - 2 Years to Enrollment 4.54% Blended Equity Portfoilio 27.77% Balanced Portfolio 15.89%
FUND OPTIONS
Money Market Fund 0.17% Fixed Income Fund 4.54% Domestic Equity Index Fund 24.23% Large Cap Growth Fund 32.87% Large Cap Value Fund 24.67% Mid Cap Fund 28.50% Small Cap Fund 33.22% International (Developed Markets) Fund 25.53%
The investment returns for the Investment Options are provided as general information only and are not intended to provide investment or other advice. Past performance is no guarantee of future performance. The investment return shown for each Investment Option reflects the composite returns for the institutional portfolios comprising the Investment Options available to participants in the Florida 529 Savings Plan. Please see the Disclosure Statement and Program Description & Participation Agreement for the Florida 529 Savings Plan dated October 1, 2013. The assets of the Florida 529 Savings Plan are invested by AllianceBernstein, Silvant, Fiduciary Management, Columbia, Florida Prime, PanAgora, The Boston Co. and QMA in accordance with the guidelines. Investment returns shown in the table above were calculated by Callan Associates Inc., the Board’s investment consultant, by computing the percentage change in the trust unit value of each Investment Option. The unit values were provided to Callan for computing the investment returns. Initial funding for the Plan began in December 2002.
14 FINANCIAL SUMMARY OF THE FLORIDA PREPAID COLLEGE BOARD
The Financial Summary below provides an overview of the Board’s financial activities for the fiscal year ended June 30, 2014. Please read this information in conjunction with the Board’s financial statements which can be found on the Board’s website at myfloridaprepaid.com.
The Board’s financial position is measured in terms of resources (assets) owned and obligations (liabilities) owed on a given date. The excess of assets over liabilities is equal to the net position. The Board’s financial position, or net position, is one way to measure the Board’s financial condition.
Stanley G. Tate Florida Prepaid College Program:
Financial Position
JUNE 30, 2014 2013 CHANGE Assets Restricted assets $ 15,079,670,758 $ 13,457,555,479 12.05%
Total assets 15,079,670,758 13,457,555,479 12.05%
Liabilities Current liabilities 3,440,471,189 2,282,764,070 50.72% Long-term liabilities 9,846,726,098 10,344,943,502 -4.82%
Total liabilities 13,287,197,287 12,627,707,572 5.22% Net position Invested in capital assets 6,652 2,175 205.84% Restricted 1,792,466,819 829,845,732 116.00%
Total net position $ 1,792,473,471 $ 829,847,907 116.00%
Changes in Net Position
YEARS ENDED JUNE 30, 2014 2013 CHANGE Operating revenues - non-actuarial $ 370,326,125 $ 386,493,895 -4.18% Operating expenses - non-actuarial (394,763,889) (376,440,801) -4.87% Decrease in actuarial receivables (114,862,689) (84,589,676) -35.79% Decrease in actuarial liabilities 450,979,469 532,916,831 -15.38%
Net operating revenues 311,697,016 458,380,249 -32.00%
Non-operating revenues 658,500,160 (186,102,600) 453.84% Non-operating expenses (7,192,919) (6,528,756) -10.17% Transfers (to) from other fund (360.693) (938,000) 61.55%
Net non-operating revenues 650,946,548 (193,569,356) 436.29%
Change in net position 962,625,564 264,810,893 263.51% Net position, beginning 829,847,907 565,037,014 46.87%
Net position, ending $ 1,792,473,471 $ 829,847,907 116.00% 15 The following actuarial assumptions were used in determining the net position of the Stanley G. Tate Florida Prepaid College Program:
• Weighted average rate of return: 3.18% per annum. Based on the U.S. Treasury Spot Rate Curve increased by a 19.2 basis point incremental return assumption as provided by Callan Associates. This rate is calculated net of the Board’s annual operating expenses.
• Tuition rates: For Florida University tuition plans in effect on July 1, 2009, an inflation rate of 7.0% was utilized for the 2014/2015 academic year. For subsequent years, the prospective inflation rate assumption has been modeled in accordance with 1009.98(10), F.S. [2013]. For Florida University tuition plans issued after July 1, 2009, the projected rates are based on a tuition inflation rate of 6.0% per annum. For Florida College tuition plans, the projected rates are based on a tuition inflation rate of 6.0% for Florida Upper and Lower Division Colleges.
• Dormitory rates: For plans on effect July 1, 2009, the projected rates are based on an inflation rate of 6.0% per annum. For plans issued after July 1, 2009, the prospective rates are based on an inflation rate of 5.0% annum.
• Local fee rates: For plans in effect on July 1, 2009, the Florida University local fee is increased at 5.0% per annum. For Florida University local fee plans issued after July 1, 2009, the projected rates are based on an inflation rate of 6.0% per annum. For Florida College local fee plans, the projected rates are based on an inflation rate of 6.0% for Florida College Upper Division and Lower Division.
• Tuition Differential Fees (TDF): For TDF plans in effect on July 1, 2009, an inflation rate of 7.0% was utilized for the 2014/2015 academic year. For subsequent years, the prospective inflation rate assumption has been modeled in accordance with 1009.98(10), F.S. [2013]. For TDF plans issued after July 1, 2009, the annual increase is projected at 6.0% per annum for preeminent Florida universities and 0.0% per annum for non-preeminent Florida universities.
16 Florida 529 Savings Plan:
Financial Position JUNE 30, 2014 2013 CHANGE Assets Restricted assets $ 411,656,668 $ 328,639,980 25.26% Total assets 411,656,668 328,639,980 25.26%
Liabilities Current liabilities 30,519,751 19,534,876 56.23% Long-term liabilities 7,663 4,015 90.86%
Total liabilities 30,527,414 19,538,891 56.24% Net position Held in trust for individuals 381,129,254 309,101,089 23.30% Total net position $ 381,129,254 $ 309,101,089 23.30%
Changes in Net Position YEARS ENDED JUNE 30, 2014 2013 CHANGE Additions $ 96,523,084 $ 63,668,527 51.60% Deductions (24,494,919) (21,436,469) -14.27%
Increase in net position 72,028,165 42,232,058 70.55%
Net position, beginning 309,101,089 266,869,031 15.83%
Net postion, ending $ 381,129,254 $ 309,101,089 23.30%
17 BOARD MEMBERS
The Florida Prepaid College Board is committed to helping Floridians save for future qualified higher education expenses by providing a cost-effective, financially sound Florida Prepaid College Plan and other college savings programs. The Board has seven members including three members appointed by the Governor, the Chief Financial Officer of Florida, the Attorney General of Florida, the Chancellor of the State Universtity System of Florida and the Chancellor of the Division of Florida Colleges, or their designees. The Board manages the Florida Prepaid College Plan and the Florida 529 Savings Plan, which are tax-advantaged 529 plans authorized by Section 529 of the Internal Revenue Code. Board meetings are open to the public and held quarterly.
The Florida Prepaid College Board would like to thank Ms. Liana O’Drobinak for her contributions to the Board from June 21, 2011 - March 25, 2014.
DUANE L. OTTENSTROER - CHAIRMAN Mr. Ottenstroer was appointed to the Florida Prepaid College Board in 2001 by Florida Chief Financial Officer Tom Gallagher. He was reappointed in 2007 as the designee for Attorney General Bill McCollum and in 2011 as designee for Attorney General Pam Bondi. As Chairman of the Prepaid College Board, Mr. Ottenstroer serves as Chairman of the Prepaid College Foundation Board. Mr. Ottenstroer serves on numerous, corporate, charitable and community boards and is active in higher education policy as a board member for Flagler College. Mr. Ottenstroer earned a Bachelor’s degree in Business from the University of Minnesota.
PHILIP E. MARSHALL - VICE CHAIRMAN Philip E. Marshall was appointed to the Florida Prepaid College Board in 2011 as the designee for the Chief Financial Officer of Florida, Jeff Atwater. With more than 30 years experience in the investment banking industry, Mr. Marshall serves as a Principal at Advantage Capital Partners where he is responsible for the investment activities and portfolio management of the firm’s investments in Florida. Prior to this, he was associated with SunTrust Robinson Humphrey, the investment banking arm of SunTrust Banks for more than two decades. Mr. Marshall is active in the Central Florida community and currently serves as Chairman of the Board of Trustees of Bishop Moore Catholic High School in Orlando as well as a member of the Finance Committee. Mr. Marshall earned a Bachelor’s degree from the University of Florida in Agricultural Economics and a M.B.A. with a concentration in Finance from the Wharton School of the University of Pennsylvania.
1818 PATRICK T. HOGAN Patrick. T Hogan was appointed to the Florida Prepaid College Board by Governor Rick Scott in 2013. Mr. Hogan is an Attorney and Managing Shareholder of Hogan Legal Services, P.A. In addition to being admitted to practice in all Florida State Courts since 1996, Mr. Hogan is also admitted to the Bars of the United States District Court for the Southern District of Florida and the United States District Court for the Middle District of Florida. He is a member of both the American Institute of CPAs and the Florida Institute of CPAs. Mr. Hogan received a Bachelor’s Degree in Business Administration from the University of Notre Dame and graduated from Notre Dame Law School.
MARSHALL M. CRISER III Marshall Criser III was named Chancellor of the State University System of Florida in January 2014. Fully dedicating himself to his passion of higher education advocacy, Mr. Criser is serving his fourth year as the Florida House Speaker’s appointee to the Higher Education Coordinating Council. Mr. Criser was appointed to the Florida Prepaid College Board in 2014. Mr. Criser represented the business community by serving as the former president of AT&T Florida. His community service includes terms as vice chair of the University ofs Florida’ Board of Trustees, chair of the Florida Chamber of Commerce and chair of Florida TaxWatch. A Florida native, Mr. Criser graduated from the University of Florida with a degree in business administration and completed an Advanced Management Programme at INSEAD of Fountainebleau, France.
RANDY HANNA Randy Hanna was named Chancellor for the Florida College System in November 2011. Most recently, he held the role of Managing Shareholder of Bryant Miller Olive since 1997, where he served as special counsel to numerous governmental units and represented clients before state agencies. With a tremendous higher education background, Mr. Hanna previously served as Chair of the Florida State Board of Community Colleges and the Florida College System Foundation and member of Tallahassee Community College’s governing board. He is a current member of the Board of Trustees for the University of West Florida and has served as a trustee for Florida A & M University. His civic involvement also includes serving as Chairman of the Florida Board of Bar Examiners and is the current Chairman of the Chamber of the Tallahassee Area Chamber of Commerce. Chancellor Hanna received a Bachelor of Science degree from the University of Florida and a M.B.A. from the Goizueta Business School at Emory University.
ROBERT C. CHAMPION Robert C. Champion was appointed to the Florida Prepaid College Board by Governor Rick Scott in 2013. Withe mor than 20 years of investment experience, Mr. Champion is a Family Wealth Director as well as, First Vice President, Financial Advisor and Financial Planning Specialist for Morgan Stanley Wealth Management. Mr. Champion is active in his community as a member of the Ponte Vedra Chamber of Commerce, Ponte Vedra Club and Museum of Contemporary Art. Mr. Champion also serves as Program Chair for the Rotary Club, as well as President for the Ponte Vedra Community Association. Mr. Champion received a Bachelor’s degree in Economics from Rollins College.
19 SERVICE PROVIDERS
The Board contracts with various companies for legal, financial, investment, customer service, marketing and other professional support. Our vendors include:
ALLIANCE BERNSTEIN LP NORTHERN TRUST Investment Management Services INVESTMENTS, N.A. Investment Management Services
CALLAN ASSOCIATES, INC. Investment Consulting Services THETH NOR HIGHLAND COMPANY, INC Management Consulting Services
CARR, RIGGS & INGRAM, LLC Auditing and Accounting Services PANAGORA ASSET MANAGEMENT, INC. Investment Management Services
COLUMBIA MANAGEMENT INVESTMENT ADVISERS, LLC. QUANTITATIVE MANAGEMENT ASSOCIATES, LLC Investment Management Services Investment Management Services
ERNST & YOUNG, LLP SILVANT CAPITAL MANAGEMENT, LLC Actuarial Services Investment Management Services
FIDUCIARY MANAGEMENT, INC. STANDISH MELLON ASSET MANAGEMENT Investment Management Services COMPANY, LLC Investment Management Services
FLORIDA PRIME (Under a State Board of THE BOSTON COMPANY Administration contract) ASSET MANAGEMENT, LLC Investment Management Services Investment Management Services
GRAY ROBINSON, P.A. THE NORTHERN TRUST COMPANY Legal Services Trustee and Securities Lending Services
INTUITION SYSTEMS, INC. THE ZIMMERMAN AGENCY Records Administration Advertising, Marketing & and Customer Service Public Relations
NEUBERGER BERMAN WELLS FARGO FIXED INCOME, LLC. Banking Services Investment Management Services
2020 The Florida Prepaid College Plan is financially guaranteed by the state of Florida. Section 1009.98(7), Florida Statutes. Unlike the Florida Prepaid College Plan, investments in the Florida 529 Savings Plan are not guaranteed and you could lose all or a portion of your investment. Nothing in this publication should be construed as financial, investment, legal or tax advice. Consult your own advisors before investing. The Florida Prepaid College Board is the source of all information included in this Annual Report unless otherwise noted. myfloridaprepaid.com
1.800.552.GRAD (4723) Florida Prepaid College Board P.O. Box 6567 Tallahassee, FL 32314-6567 2014