Fitch: Audit finds problems with MPACT’s pricing structure

The firm state Treasurer Lynn Fitch hired to audit the Mississippi Prepaid Affordable College Tuition Program, or MPACT, identified 12 areas of concern, nine of which were related to the program’s pricing structure.

Fitch announced last fall that was suspending the state-backed college savings program, due to concerns she had over its financial condition. She hired Michigan-based Gabriel Roeder Smith and Co. shortly thereafter to audit it.

Fitch released the results, which she said made up Phase I, Friday morning, to go with her legislative agenda.

The first-term treasurer said GRS & Co. found the plan had a 43 percent of chance of reaching its 7.8 percent target rate or return. For fiscal year 2012, the rate of return was 1.10 percent. The estimated rate for fiscal year 2013, according to Fitch, is 4.98 percent. The plan, which has 22,000 enrollees and $274 million in trust, is currently is 76 percent funded. The last time it was 100 percent funded was 2000.

Mississippi Business Journal
1/11/13