Oregon's 529 College Savings Plan is supposed to be a safe and responsible way to save and allow children and grandchildren to attend college. The brochures made it sound safe -- especially for those who chose the "One To Three Years To College" and "Four To Six Years To College" portfolios. When the kids are that close to needing the money for tuition and books, parents cannot afford to be taking big risks with the money, because there is not enough time to make up for losses. That is an elementary principal of investing.
Apparently, Oppenheimerfunds, the professional portfolio manager for the Oregon College Savings Plan, didn't understand that, because it invested college savings into high risk, low return funds that have performed miserably. The investing was complicated, but the bottom line is that Oppenheimer put 30% to 35% of the conservative portfolios' money into a Core Bond Fund that lost 36% of its value (before expenses) in 2008. And that was suppose to add a component of safety to the portfolio! That Core Bond Fund was invested heavily in mortgaged backed securities. As a result, the two most conservative and safe College Savings Plan portfolios lost 24% and 29% of their value in the last year. There is no excuse for those losses in a conservative savings plan. If Oppenheimer or anyone else says that it was because of a poor market, don't believe it. Responsible fund managers did not suffer those losses. The Vanguard Bond Index Fund, for example, which invests in a broad range of bonds, showed a 5% gain in 2008. The losses in the Oregon College Savings Plan occurred because Oppenheimerfunds gambled with kids' tuition, and lost. They did precisely the opposite of what they said they would do, and what they should have done. We think investors have recourse for these losses, and that those who are proactive and file claims will likely fare better than those who do not.
If you were an Oregon College Savings Plan Participant, fill out our free Contact Us form, and tell us (a) how much and when you invested in the Oregon 529 Plan, (b) which portfolios you were in, and (c) how much you have lost, by looking at your last statement or reviewing your account online. Let us know how to reach you and we promise to tell you what we think. There's no charge or obligation for asking, and if we do represent you, we would offer to do so on a percentage of your recovery, so you would not owe any attorney fees unless and until you recover your losses.