Transcript Aucun titre de diapositive - RESP-NB

REGISTERED EDUCATION SAVINGS PLAN
RESP
 Ideal investment product for investing
in a child’s future.
 Advantages:
 Tax-sheltered investment income
 Canada Education Savings (CES) Grant :
20 %
SUBSCRIBER
AND
BENEFICIARY
Who can susbcribe to a
Diploma RESP?
• Any person of legal age
Parent, grand-parent, uncle, aunt, friend of
the family, etc...
Who can be designated
beneficiary of a Diploma plan?
• Any child 14 years of age or less;
• Need not be related to the subscriber;
• One per contract;
• Can be changed at any time;
• Can be the beneficiary of more than one RESP.
ACCUMULATION
The accumulation in
Diploma is made up of...
Education bonus
Investment income
Grants
Contributions
Exclusive to Diploma
3 types of contributions:
PAC contributions up to the
beneficiary’s age 18*
Contributions
 Minimum : $25 per month
 No enrolment fees
Additional deposits;
Transfers from other plans.
* until December 31 of the year in which the beneficiary reaches age 17
Maximum contributions...
Annual:
$4,000
Lifetime:
$42,000
Maximum per beneficiary
for all RESPs held
The accumulation in
Diploma is made up of...
Grants
Contributions
The Canada Education Savings
Grant (CES Grant)
• A gift from the government;
• Contirbutes to the plan’s success;
• Substantially increases the returns.
RESP + CES Grant
RESP
Accumulated Deposits
The CES Grant
 Beneficiary eligibility
 Must be 17 years of age or younger;
 Social insurance number;
 Canadian resident.
 Do 16 and 17-year-olds receive the grant?
 Certain conditions apply.
The CES Grant
The amount of the Grant:
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20% of the annual contributions;
$400 annual maximum;
$7,200 lifetime maximum;
Paid monthly by the Federal Government;
Tax deferred until the amounts are withdrawn;
Unused rights can be carried-over.
The accumulation in
Diploma is made up of...
Investment income
Grants
Contributions
Investment Fund
An index based investment fund
MSCI EAFE
International
Stocks
10%
US Stocks
S&P 500
25%
40%
25%
Canadian Bonds
« B » Fund
Canadian
Stocks
S&P TSE 60
Potential for superior returns
Fixed
proportions
Investment Fund
Estimated annual returns *
as at January 1, 2001
1 year
3 years
5 years
10 years
10.9%
9.2%
11.2%
11.0%
* net return
Investment Fund
 Offers an optimal diversification
between several asset classes
 Simplified choice offering an index
based management
 Guarantee at death and maturity
The accumulation in
Diploma is made up of...
Education bonus
Investment income
Grants
Contributions
Exclusive to Diploma
The Diploma Education Bonus.
 % of the total PAC
contributions made;
 A one time payment at the
end of the commitment
period.
Beneficiary’s
Education
age at issue
bonus
% of PAC's
0-4 years
15.0%
5
13.5%
Example:
6
12.0%
Deposits: $100 X 12 X 18 years
= $21,600
7
10.5%
8
9.0%
9
7.5%
10
6.0%
Bonus: $21,600 X 15%
= $3, 240
… up to age 14
LATE MONTHLY
PAC PAYMENTS
Late PACs : 1-2-3 process
1. Grace period
2. Charge/fee
3. Reinstatement period
(3 to 6 months)
(0 to 24 months)
Issue
PAC’s
stopped
0
6
12
18
24 months
Late PACs
1. Grace period
RESP’s age
Grace Period
1 – 3 years
3 months
4 years and over
6 months
Late PACs
2. Charge/fee
A charge/fee is applied to the Diploma
contract at the end of the grace period
- RESP remains in force
- Charge/fee is also applicable on surrender
Charge/fee
50% X PAC amount X number of
PACs paid (max. 18)
Example: $25/ month, age 0
duration
charge
This charge is
very competitive
6 months:
12 months:
18 months:
$ 75
$150
$225
vs
Enrolment fees
of Scholarship
Plans
No charges once commitment period ended
Late PACs
3. Reinstatement period
If the PAC’s are paid back to the plan
(without interest) :
We reimburse the charge
(a 24 month decreasing %)
(3 to 6 months)
(0 to 24 months)
100%
75%
50%
Issue
25%
PAC’s
stopped
0
6
12
18
24 months
Late PACs : 1-2-3 process
1. Grace period
2. Charges
3. Reinstatement period
(3 to 6 months)
(0 to 24 months)
100%
75%
50%
Issue
25%
PAC’s
stopped
0
6
12
18
24 months
NEW RESP
EDUCATIONAL
ASSISTANCE
PAYMENTS
When the subscriber requests the Educational
Assistance Payment (EAP) for the beneficiary:
Education bonus
Investment income
Grants
Contributions
EAP for the beneficiary
The subscriber can
withdraw contribution
Eligibility to receive the EAP:
1. The beneficiary must be a full-time student
in a post-secondary educational institution;
2. Most colleges and universities qualify;
3. Program must be of a minimum duration of
3 consecutive weeks or 13 weeks for an
institution outside Canada.
The Diploma Educational
Payments.
 Great flexibility of EAP payments;
 The frequency and the amount of the
payments are at the discretion of the
subscriber;
 Maximum for the first 13 weeks: $5,000;
 There are no restrictions as to the amounts paid
after the first 13 week period.
NEW RESP
ADDITIONAL
INFORMATION
Insurance Riders
 Two choices :
- CID : disability protection
- CIDE : death protection
 Insured: Subscriber
 Benefit: monthly PAC premium
THE
...
RESP
…INVEST IN THE
FUTURE OF YOUR
CHILDREN
NEW RESP
An unbiased comparison
between Diploma and
Scholarship Trust Funds
Scholarship
Trust funds
Contributions
 PAC contributions
 Ø enrolment fees
Investment
income
 Index type investment fund  Bonds, Treasury bills,
(bonds and stocks)
GICs
 Superior potential return
Educational
payments
 Education bonus
 Great flexibility (timing and
amounts $)
 PAC contributions
 High enrolment fees
 No flexibility in
payments (spread out
over 2 or 3 years)
Scholarship
Trust funds
Child does
not pursue
studies
 Vested accumulated income
(transfer to the RRSP or
withdrawals)
 Loss of accumulated
income (redistributed
among other
beneficiaries)
Late PAC
 Grace period
 Charges
 Grace period
 Loss of enrolment fees
 Reinstatement with
interest charges
 CID / CIDE
 Life and/or Disability
insurance (included in
the unit or optional)
 Reinstatement without
interest charges
Additional
benefits