An unstable economy is having no effect on West Virginia’s SMART 529 pre-paid college tuition program, according to West Virginia Treasurer John Perdue.

“Our program is close to $1 billion and we are still having people investing in it every day,” Perdue said.

Perdue said although there was a downturn in the stock market last year, it should have no effect on the long-term investment program.

“I tell people who invest in the program when their child is young that it’s a decade-long investment for them,” he said. “Later, they can look at how to move that money toward fixed-income programs and investments.”

Some residents became worried with reports that other state-run trust funds for parents who want to pay off college tuition before their children enroll were running out of money.

Perdue says West Virginia does not have that problem.

“We’re not planning to get back in pre-paid college funds,” said Perdue.

In 2001, West Virginia stopped the pre-paid program and went to the Smart 529 program, Perdue explained.

The reasoning, according to Perdue, is in the pre-pay program the state took the risk of a stock market plunge.

“We’ll meet the needs,” he said. “If not, we have a reserve fund for approximately 7,000 accounts left. We still have nearly $80 million in that fund.”

With the Smart 529 plan, the investor or parent decides to make changes, Perdue explained.

“Parents will still reap the benefits of investing in the pre-pay program,” he said. “You can choose what risk you want to take with your investment.”

Perdue says even though no more accounts are being accepted in the pre-pay plan, people should definitely keep investing in Smart 529.

“It’s a five-star rated program that is considered one of the best in the country,” Perdue said. “It’s the best Christmas gift, birthday gift or baby shower gift. I will continue to promote this program as the best long-term program for investing in your child’s future education.”

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Perdue added that a ruling by the U.S. Treasury and the Internal Revenue Service will allow SMART 529 enrollees to change their investment strategies twice a year.

Previously, owners of 529 plan accounts could change their investment strategy once per calendar year. The new ruling — in effect for calendar year 2009 — is a direct response to current market conditions and a desire to give investors more flexibility.

To learn more about this new ruling, go to www.IRS. gov.

SMART 529 is a type of college savings vehicle, so named for a section of IRS code. SMART 529 is officially sanctioned by the West Virginia College Savings and Prepaid Tuition Fund.

For more information on SMART 529, visit the program’s Web site at www. SMART529.com, call toll-free at 1-877-767-8529, or contact your local bank’s investment firm.

— E-mail:

fpace@register-herald.com