13-441a English Brochure
13-441a English Brochure
13-441a English Brochure
DIPLOMA
THEIR FUTURE?
$67,000
$20,000 $0
$16,000
2009
2027
A child may be designated as the beneficiary1 of more than one RESP by different subscribers. For example, a parent and a grandparent can both subscribe to separate RESPs for the same child. However, they must be sure to remain within the maximum contribution limits allowed for one beneficiary. The flexibility of our plan allows you to change beneficiaries once the plan has been established. The monthly payments continue until the end of the original commitment period regardless of the age of the new beneficiary. A written notice of the beneficiary change is required, accompanied by the new beneficiary's Social Insurance Number.
1
When a beneficiary already has an RESP, certain rules have to be respected to avoid making overcontributions.
Make the maximum contribution every year with an RESP loan. ASK US ABOUT IT!
The CESG is paid directly into the beneficiary's education savings plan. We submit the application for you. In order to be eligible for the CESG, the designated beneficiary must have a Social Insurance Number, and must be a resident of Canada. The CESG is available for children age 17 and under. For beneficiaries who are 16 or 17 years of age, there are conditions that must be satisfied for the CESG to be paid. Please contact your financial advisor for more details.
Your CESG is retroactive to January 1, 1998. Dont forget to verify the number of years for which your child was eligible!
Example
This year, you invest $1,000 in David's RESP. A CESG of $200, i.e., 20% of your total contribution, is paid directly into the RESP. The CESG carry over is $300 (i.e. this year's CESG entitlement of $500, less the $200 CESG received). Next year, the total CESG entitlement is $800 ($500 for the current year's CESG entitlement plus $300 carried over from the previous year). Therefore, a $4,000 contribution will generate an $800 CESG payment into David's plan.
Indispensable benefits
Why should you include additional benefits in your Diploma RESP? By subscribing to the Diploma RESP, you are making a commitment: that of creating an education fund that will allow a child to pursue a post-secondary education. This commitment entitles you to an education bonus that can reach as high as 15% of your monthly contributions to the plan. Furthermore, to help you respect your commitment and achieve your savings objective, two additional benefits are being offered with the RESP in order to help you ensure the continuity of your contributions in case of death or disability.
disability, as well as eligibility for the education bonus once your commitment has been fulfilled. So, thanks to these two benefits and for just a few dollars a month, you can enjoy peace of mind in knowing that your children will be able to pursue a post-secondary education, no matter what!
The Quebec government offers beneficiaries who are residents of Quebec a 10% tax credit on the first $2,500 in annual contributions per beneficiary. Depending on family income, the first $500 of contributions can also entitle the beneficiary to an additional credit of up to 10%. The maximum per beneficiary is $3,600.
Contribution in the event of the insured's death (subscriber) (CIDE) Contribution in the event of the insured's disability (subscriber) (CID)
These benefits give you the assurance that in the event of death or disability, the Company will continue to make monthly contributions on your behalf to fulfil your commitment. The inclusion of these benefits also ensures the continuity of CESG payments into your plan in the event of death or
A diversified investment whose assets are partially invested in the Diploma Elementary fund and the Diploma Secondary fund, depending on the beneficiary's age. Each fund's performance is related to the return of assets composed of money market securities, fixed income securities, Canadian equity and investments in U.S. and international stock market indices.
0 to 12 100% 0% 13 80% 20% 14 60% 40% 15 40% 60% 16 20% 80% 17 0% 100%
A guarantee on investment funds that can reach and even exceed 100% of the invested capital.
Sample case:
You want to invest for your two-year-old son David's postsecondary education. Thanks to the additional 20% in CESGs generated on monthly RESP contributions of $100 for 17 years, the education bonus paid by the Company and the growth of tax-sheltered investments, you will accumulate a total of $41,804 in your RESP by the time he turns 18. The same amount invested in a non-registered plan (no CESGs and no education bonus) is $26,897, considering a 40% annual taxation rate. The calculations are based on a 5% annual compound rate of return.
The advantage of combining the CESG with an RESP and an education bonus
$45,000 $40,000 $35,000 $30,000 $25,000 $20,000 $15,000 $10,000 $5,000 $0 3 5 7 9 11 13 15 17 19
Age
earners, the amount of income taxes will probably be fairly low. You can also add a portion of the contributions to the EAPs, but this amount is not taxable for the beneficiary. The amount paid in the form of EAPs is intended to pay for tuition and other education-related expenses such as housing, school supplies, food, transportation expenses, etc.
The beneficiary must be enrolled full-time in a qualifying educational program (or part-time if the child has a physical or mental impairment). Virtually all full-time post-secondary educational programs offered by most qualifying educational institutions (colleges, universities, technical and vocational schools) are eligible for RESPs. Similarly, several programs provided by educational institutions located outside Canada are also eligible (subject to certain conditions).
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1 new beneficiary
You may choose to designate a new beneficiary. New contributions may be made for the time remaining in the plan, as long as the original commitment is respected. However, to maintain the previous CESGs, the new beneficiary must meet one of the following conditions: The new beneficiary must be under 31 years of age and be the brother or sister of the former beneficiary; or
Designate a
You have unused RRSP contribution room. You are a resident of Canada. The RESP has existed for at least ten years. The plan's designated beneficiary is 21 or older and is not eligible to receive Educational Assistance Payments (EAPs).
Both beneficiaries (former and new) are related by blood or adoption to the subscriber. (The old and the new beneficiary must be under 31 years of age).
$50,000 is the maximum amount that can be transferred. Because no payments are made to the beneficiary, the CESG must be returned to the federal government and the education bonus will be returned to the Company.
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3 accumulated income
If your RRSP contribution room is not sufficient to accommodate the transfer of investment income from the RESP, you are required to withdraw this money no later than the end of February in the year following termination of the plan. This investment income will be reported as taxable annual income and will also be subject to an additional tax of 20%. You must satisfy the same conditions as those outlined in Point 2 before you can withdraw the investment income accumulated in the RESP.
Withdraw the
4 accumulated income
The accumulated income in an RESP can also be donated to a registered educational institution of the subscriber's choice.
Donate the
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Secondary
Manager Industrial Alliance Investment Objective Generate regular returns and a certain capital appreciation. The risk level is reduced through diversification in assets and geographic regions. Allocation*: Money market funds: 35%
Advantages
Advantages: Excellent way to take advantage of the high performance potential of stock markets while ensuring capital security.
Industrial Alliance
Investment Objective Generate superior returns in the medium- to long-term while lowering risk through diversification in assets and geographic regions. Allocation*: Fixed-income securities: 40%
Fixed-income securities: 50% Canadian Equities: 7.5% U.S. index investments: 5% International index
investments: 2.5%
F13-441A (09-02)