S.C. college savings plan ranked in top 10

South Carolina's state-administered college savings fund was recently ranked in the top 10 nationally.

Future Scholar, a tax-free college savings plan administered by the S.C. Treasurer's Office, was recently ranked in the top 10 among similar plans for several categories of investment performance by the website savingforcollege.com.

In the second quarter of 2015, the website ranked Future Scholar No. 5 for one-year investment performance, No. 9 for three-year performance, No. 10 for five-year performance and No. 13 for 10-year performance.

The Future Scholar plan is classified by the IRS as a 529 plan, a special category of investment plan administered by a state or educational institution and meant to make it easier to save for a child's college education. Many states have begun offering 529 plans since Congress began allowing them in 1996.

South Carolina residents can claim contributions to a Future Scholar account as a line-item deduction on state tax returns. Spending from a Future Scholar account on qualifying tuition, books, room and board, and other college-related expenses is also tax-free.

The investment plan is managed by Columbia Threadneedle Investments, and investors can shift their investment once per year between aggressive, moderate, and conservative portfolios.

Jenny McGill, program director for Future Scholar, said the Treasurer's Office renegotiated the plan's management contract in 2012, allowing account holders to invest in a broader range of funds and eliminating management fees from the Direct Plan, which is sold to South Carolina residents. Out-of-state residents can invest in a Future Scholar Advisor Plan but must pay a management fee.