Michigan Education Trust 2007-2008

Michigan
Education
Trust
2007-2 0 0 8
A nnual Re p o rt
for Cont r a c t
Pl ans B & C
This report is available at www.SETwithMET.com.
To have a copy mailed to you, call
1-800-MET-4-KID.
187 (Rev. 4-06)
JENNIFER M. GRANHOLM
GOVERNOR
STATE OF MICHIGAN
DEPARTMENT OF TREASURY
LANSING
ROBERT J. KLEINE
STATE TREASURER
June 2009
Dear MET Participants:
We are pleased to present the Fiscal Year 2007-08 Annual Report for the Michigan Education
Trust (MET) program. By law, an actuarial evaluation must be performed annually to determine
MET’s ability to pay future benefits. The actuary report prepared by PricewaterhouseCoopers
L.L.P. for contracts purchased from 1988 to 1990 (referred to in this Annual Report as Plan B
and Plan C contracts) as of September 30, 2008, is available on-line at
www.SETwithMET.com.
In August 2008, the MET Board of Directors increased the maximum amount of educational
benefits allowed from four years to five years. This allows for more flexibility to transfer credit
hours among immediate family members. It also allows four year contract holders the ability to
purchase additional benefits if needed.
If you have not yet purchased full four-year contracts, we encourage you to consider additional
purchases this year. The 2009 enrollment period is currently open and ends August 31, 2009.
Please feel free to call the MET office with any questions or concerns you may have at (800)
MET-4-KID (638-4543) or (517) 335-4767 in the greater Lansing area. You may also e-mail us
at [email protected].
Sincerely,
Robert J. Kleine
MET Chairman
State Treasurer
Michigan Education Trust
Robin R. Lott
Executive Director
Michigan Education Trust
P.O. BOX 30198 x LANSING, MICHIGAN 48909
www.michigan.gov/treasury x (517) 335-4767 or (800) MET-4-KID
1
MET BOARD AND LEADERSHIP
A nine-member Board of Directors administers the Michigan Education Trust (MET) program. Board
members are responsible for policy development, investment initiatives, program development and
implementations. The Governor, on advice and consent of the Senate, appoints MET Board members,
who represent expertise in business, academics or finance. The State Treasurer, Robert J. Kleine, serves
as Chairperson. Robin Lott, Executive Director, serves as liaison to the MET Board of Directors and
administers MET operations.
MICHIGAN EDUCATION TRUST
BOARD OF DIRECTORS
MR. ROBERT J. KLEINE
State Treasurer
MET Chair
MR. ROBERT A. BOWMAN
MET President
President & CEO, MLB Advanced Media, L.P.
MR. THOMAS P. SULLIVAN
MET Vice President
President, Cleary College
DR. MICHAEL RAO
President, Central Michigan University
DR. ALBERT L. LORENZO
President, Macomb Community College
MR. JOHN M. HALE, III
Independent Financial Consultant
DR. MARLENE E. DAVIS
CEO Leadership Strategies L.L.C.
MR. GREGORY CLEVENGER
Teacher, Rochester Adams High School
MS. BARBARA A. KLOCKO
Representing the General Public
THE MET PROGRAM
MET was established pursuant to Public Act 316 of 1986 as Michigan’s prepaid tuition program. MET is a
“qualified tuition program” under Section 529 of the Internal Revenue Code which provides tax exemption
for the trust and tax exemption of earnings for contract participants who use MET funds to pay for qualified
higher education expenses.
MET allows parents, grandparents, businesses, and others to make contributions at the current rate of tuition
for a child to attend any Michigan public college in the future. Michigan is the first state in the nation to
enact legislation for a prepaid tuition program. Today, all 50 states have established similar prepaid or
college savings programs.
22
2007-2008 Annual Report for Contract Plans B & C
Contracts by Academic Year
Beneficiary is Expected to Attend College
(as of September 30, 2008)
5000
4500
Number of Contracts
4000
3500
3000
2500
2000
1500
1000
500
0
1988
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
2012
2014
Ye ar
Contracts in Payment Status
62.15
Percentage
(as of September 30, 2008)
13.91
11.25
5.86
3.94
0.77
Michigan 4year
Michigan
Community
College
Private College
Out-of -State
1.74
0.30
Full Tuition
Scholarship
Not Attending
Michigan 4year under
Community
College
Contracts
0.08
Michigan
Community
College w ith
Full Benef its
Contracts
Military
Enlistment
Contracts Paid in Full
79
48
3,
2,
9
58
3,
2
98
8
3,
3,
8
70
5
1,
2,000
53
4
1,
80
0
2,
1,
98
9
2,500
13
8
2,
3,000
2,
9
66
7
2,
97
0
3,500
62
3,
4,000
5
1,500
88
Number of Contracts
12
4,500
8
(as of September 30, 2008)
0
1991
1993
Michigan Education Trust
28
98
99
42
500
6
1,000
1995
1997
1999
2001
2003
2005
2007
3
CONTRACT AMENDMENT
Amendment of Full Benefits, Limited Benefits and Community College Contracts:
MAXIMUM AMOUNT OF BENEFITS:
Until amended in 2008, the MET statute did not allow a Beneficiary to accumulate more than four years of
educational benefits.
The Board approved an amendment to Section 2, for contracts purchased between 1988–1999, and Section
4, for contracts purchased between 2000-2008, to allow an increase in the maximum allowable credit hours
per Beneficiary from four years (120 credit hours) to five years (150 credit hours). This resolution was passed
pending approval of Administrative Rule 390.1802, which was adopted on December 3, 2008.
Amendment to all Full Benefits, Limited Benefits and Community College contracts:
A Beneficiary may not accumulate more than five years of MET educational benefits.
This language is already in contracts purchased during the 2009 enrollment period.
TESTIMONIALS
“MET is the best investment that we ever made! So user friendly, it has been great for our three children. With
all three attending college now it’s great for us too. Without MET, this may not have been possible.”
Judy Roberts, Appointee
“As it turns out, purchasing the MET was one of the smartest financial moves we have made! We cannot thank
you enough for the time and effort spent to help our daughter make the most of her options.”
Loretta Kramer, Purchaser
“I have two children that have graduated from the University of Michigan without the burden of student loans. MET
was one of the best decisions we have ever made. I have highly recommended it to both family and friends.”
Jennell Salciccioli, Appointee
“MET is the best investment we have ever made. Our children were three and four years old when we purchased
contracts. Since they have been using their benefits I have always found it easy to get assistance. We are elated
with the experience.”
Deborah Thomson, Appointee
44
2007-2008 Annual Report for Contract Plans B & C
Michigan Education Trust
5
66
2007-2008 Annual Report for Contract Plans B & C
MANAGEMENT’S DISCUSSION AND ANALYSIS
Michigan Education Trust
7
88
2007-2008 Annual Report for Contract Plans B & C
Michigan Education Trust
9
10
10
2007-2008 Annual Report for Contract Plans B & C
Michigan Education Trust
11
NOTES TO THE FINANCIAL STATEMENTS
12
12
2007-2008 Annual Report for Contract Plans B & C
Michigan Education Trust
13
14
14
2007-2008 Annual Report for Contract Plans B & C
Michigan Education Trust
15
16
16
2007-2008 Annual Report for Contract Plans B & C
Michigan Education Trust
17
18
18
2007-2008 Annual Report for Contract Plans B & C
Contract Number(s)
Michigan Department of Treasury
2775 (Rev. 3-07)
Michigan Education Trust Change of Address
It is important that we have correct addresses and phone numbers. Please notify us when a permanent address change
is made. This will enable us to mail the appropriate individual important program information such as tax information used
for income tax purposes. The MET contract is a legal document; therefore, any changes to the contract must be made in
writing to the MET office and mailed (or faxed) to the address listed below. Either the Purchaser, Beneficiary or Appointee
must sign this form. If change of address applies to more than one Beneficiary (student), please copy this form and
submit a separate form for each Beneficiary (student).
This change of address applies to (check all that apply):
Ƒ Purchaser
Ƒ Beneficiary (student)
Ƒ Appointee
Name
E-mail Address
New Address
Daytime Telephone
City, State, ZIP Code
(
)
The Purchaser’s signature is required to change Purchaser address. Purchaser may also sign to change address for an Appointee
and a Beneficiary under 18 years of age.
Purchaser Signature
Date
The Beneficiary must be 18 years of age and can only change his/her address.
Beneficiary Signature
Date
The Appointee’s signature is required to change Appointee’s address. Appointee may also sign to change address for a Beneficiary
under 18 years of age.
Appointee Signature
Date
MAIL TO:
Michigan Education Trust
P.O. Box 30198
Lansing, Michigan 48909
Fax:
(517) 373-6967
Michigan Education Trust
19
Fold here
1st Class
Postage
Required
Michigan Education Trust
P.O. Box 30198
Lansing MI 48909
Fold here
The MET Staff
Robin R. Lott
Executive Director
Joseph Asghodom
Finance Manager
Brenda Rustem
Office Manager
Jennifer Wallace
Outreach Manager
Sharon Gleason
Processing Supervisor
Dalynne M. Preston
Financial Analyst
Diane Brewer
Policy Analyst
Jchon Patton
Analyst
Roger Shelley
Analyst
Yoshiaki Tani
Accountant
Donald Fews
Communications Assistant
Linda Giles-Gordon
Executive Secretary
Printed under authority of Public Act 316 of 1986. 500 copies printed at $2.0546 each; total cost $1,027.13.
Michigan Education Trust
21
2268 (Rev. 6-09)
P.O. Box 30198
Lansing, MI 48909
Telephone: (517) 335-4767
Toll-free 1-800-MET-4-KID
Fax (517) 373-6967
www.SETwithMET.com