The Oregon treasurer's office said Wednesday that it has hired OppenheimerFunds Inc. to replace Strong Capital Management as a manager of its 529 college savings plan.
The state fired Strong three months ago as the company, and its founder, Richard Strong, faced allegations of improper fund trading. Oppenheimer is expected to take its role in the 529 plan's management by midsummer.
Oppenheimer is to manage the no-load, direct-sold portion, which has $132 million of assets. The state intends to announce shortly who will manage an additional $23 million of broker-sold 529 assets, which had also been under Strong. The agreement with Oppenheimer is contingent on its certifying to the state that it has "no outstanding issues or problems with market timing or late trading," the fund trading abuses suspected in more than 20 companies.
Oregon is the only state to fire one of its college-savings plan providers. It is one of only a few that has clauses in its contracts with 529 plan providers allowing it to fire them for any reason. The state has $260 million in three 529 plans. Massachusetts Financial Services Co., which manages about $100 million for Oregon, announced a $351 million settlement two weeks ago with state and federal officials who had alleged market-timing abuses. The state has not determined what to do about MFS.
Oregon's third provider, State Street Corp.'s Schoolhouse Capital, manages $5 million of its 529 plan assets and has not been named in any mutual fund probe.
