Companies form foundation to promote college savings plans. (Life/Health: Marketplace).

Several large financial-services companies, including Manulife Financial, have created the College Savings Foundation to help support tax-advantaged plans authorized under Section 529 of the Tax Code.

Founding members of the Washington, D.C.-based not-for-profit corporation include AIM Investments, Fidelity Investments, Franklin Templeton, Manulife Financial, Merrill Lynch, Morgan Stanley, Strong Financial and T. Rowe Price. The 529 industry is dominated by these mutual-fund providers, but New York-based TIAA-CREF is the plan sponsor in 13 states, and several other insurers have partnered with other state contract holders.

The 529 plans bestow federal tax-free treatment to earnings and distributions when used for qualified college costs. Many states also offer state-tax benefits. Boston-based Financial Research Corp. estimates assets in the plans at nearly $28 billion as of Dec. 31, 2002.

The foundation seeks to promote, protect and enhance 529 plans. It will also build a database to serve as the primary source for detailed analysis of the plans, including the prepaid-tuition variety. During the 2002-2003 academic year, college tuition and fees rose an average of 9.6% at four-year public institutions and 5.8% at four-year private institutions, according to the College Board, a national association of schools and colleges.