State Treasurer Lynn Fitch spoke about the recently audited MPACT program Friday during a press conference. Mississippi's prepaid affordable college tuition program is not allowing anyone to enroll at this time.
There is a possibility MPACT, the program designed to help Mississippi children continue their education through college, could be closing. Fitch said it was necessary to see how sustainable the program really is, therefore an audit was granted. Now, results are in showing 12 areas of concern.
"Nine of them have to do with pricing. And I will just tell you that our current rate of assumption is 7.8 percent. I've told you historically we've only made 4.8% over the like of this fund. Are actuary has been 7.8 percent. College tuition has continued to rise and we have a tremendous gap," Lynn Fitch said.
A gap of $94 million, Fitch said. And that's why she believes it's critical to continue looking at the viability of this fund.
"They talk about in these 12 concerns, the annual investment return experience is expected to be very volatile. That will cause a problem as we go into the additional participation periods as we look at pricing and ultimate solutions," Fitch said.
From here, phase two of the audit will be performed. It will take 90 to 120 days to complete. Fitch said from there recommendations and solutions will be given to determine if MPACT should close. So, what about the 22,000 already participating in the program?
"If you are an investor in that program you're in a very good position. Certainly it's backed by the full faith and the credit. So their participation and those children will receive those dollars and their education they paid for or are paying for. So, it's well protected. It's a great investment," Fitch said.
Thursday, August 28 2014 9:33 AM EDT2014-08-28 13:33:06 GMT
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