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Your Child...

Your Child. You give your child all the care and love he needs to grow and achieve his potential. Even though he is small, you have big dreams for him. You want to give him everything he needs to succeed in life on a personal and professional level. Your Child’s Future.

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Your Child...

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  1. Your Child... • You give your child all the care and love he needs to grow and achieve his potential. • Even though he is small, you have big dreams for him. • You want to give him everything he needs to succeed in life on a personal and professional level.

  2. Your Child’s Future... Giving your child the opportunity to pursue post-secondary studies is one of your most precious projects.

  3. Your Child’s Future... • Your goals are important for you and we understand. • How can we help you realize them?

  4. Is an Education Important? A Canadian study shows that a post-secondary education and training are becoming increasingly important • In the 2000s: • 65% of new jobs, i.e., almost 2 out of 3 jobs, will require a post-secondary degree. Source: Statistics Canada

  5. Education and the Government • Governments have decreased their spending in the education sector. Consequences: • Reduction of the amounts allocated to educational institutions • Educational institutions have increased their tuition fees

  6. Increased Tuition Fees* (university) • In the last 10 years, tuition fees have increased by 135% • In 1993: $1,588 per year • In 2003: $3,733 per year * Canadian average according to Statistics Canada

  7. $100,000 $85,122 $80,000 $60,000 $50,000 $40,000 $23,540 $14,932 $20,000 $0 2003 2021 The Cost of a University Education (over 4 years) Child living at home Child living away from home to study * Estimated with a 3% inflation rate

  8. The Solution... • The Registered Education Savings Plan, commonly known as the RESP, is the most realistic alternative for saving for a child’s education. • The RESP is to studies what the RRSP is to retirement!

  9. Why Choose the RESP The RESP is the top financial tool to accumulate amounts for your child’s education. • The advantages of the RESP: • Tax-sheltered investment income • Canada Education Savings Grant (CESG) • Savings plan more flexible than before

  10. The RESP... DIPLOMA … an excellent savings vehiclefor your child’s post-secondary education!

  11. $$$ The People Involved... SUBSCRIBER: • Parents, grandparents, uncle, aunt, godfather, godmother BENEFICIARY: • a child age 14 or under

  12. The RESP • The amounts invested in an RESP are made up of: C Contributions

  13. Contributions • Through monthly payments (PAC) until age 18* • Minimum: $25 per month • no enrolment fees • Additional lump-sum deposits • Transfers from other RESPs • The maximum contributions per beneficiary are: • $4,000 per year • $42,000 lifetime *until December 31 of the designated beneficiary’s 17th birthday

  14. The RESP • The amounts invested in an RESP are made up of: The Grant G C Contributions

  15. The CESG Amount of the CESG: • 20% of annual contributions • Annual maximum of $400 • Total maximum of $7,200 • Paid monthly (by the federal government) • Taxable only upon withdrawal • Unused grant rights deferred to subsequent years

  16. The RESP • The amounts invested in an RESP are made up of: Taxable only upon withdrawal Investment income I The grant G C Contributions

  17. Diploma Fund Diploma Elementary Fund 10% 40% Diploma Secondary Fund 20% 2.5% 5.0% 35% 7.5% 30% 50%

  18. Diploma Investment Distribution of Diploma Assets Automatic rebalancing on the beneficiary’s birthday

  19. The RESP • The amounts invested in an RESP are made up of: Exclusive to DIPLOMA The education bonus B I Investment income G The grant C Contributions

  20. The Education Bonus • Exclusive on the market • Paid if all PAC contributions have been made • Bonus established according to the beneficiary’s age at issue and can reach up to 15% (including lump-sum depostis acccording to the beneficiary's age when each deposit is made) • Paid in the form of Educational Assistance Payments (EAP)

  21. MONTHLY PAYMENTS (PAC)

  22. Your Commitment • The education bonus is paid to the RESP to compensate for your efforts at the end of your commitment period, i.e., until the child (beneficiary) reaches age 18. • Therefore, a delay in your monthly PAC payments could lead to penalties.

  23. Late PAC Fees are applicable at the end of the grace period

  24. 3 to 6 months Surrender fees 0 to 24 months Grace period Recuperation period Diploma - Contributions Issue Month

  25. Just in Case... To help you respect your commitment and to ensure the continuity of your contributions, additional benefits can be added to your education savings plan: • Contribution in the event of the subscriber’s death • Contribution in the event of the subscriber’s disability

  26. YOUR CHILD IS READY FOR POST-SECONDARY STUDIES

  27. The Educational Assistance Payment (EAP) B EAP Beneficiary TAXABLE I G C The subscriber can withdraw contributions NON-TAXABLE

  28. Beginning of Studies • Proof of registration required (only) • The subscriber decides on the frequence and amounts to be paid to the beneficiary • Admissible educational institution: • Almost any college (CEGEP) or university in Canada • For a foreign college or university: • course that lasts a minimum of 13 consecutive weeks.

  29. Admissible Studies • Admissible training program: • course that lasts a minimum of 3 consecutive weeks • Minimum of 10 hours of courses (or homework) per week • Training course not related to the student’s employment

  30. WHAT HAPPENS IF YOUR CHILD DOESN’T PURSUE POST-SECONDARY STUDIES

  31. If the Beneficiary does not Pursue Post-Secondary Studies... The subscriber has 4 choices: • Name another beneficiary • Transfer the accumulated income to his RRSP* or his spouse’s RRSP • Withdraw the accumulated income from the RESP* (100% taxable + 20% penalty) • Make a donation to a recognized educational institution * the grant must be returned to the government

  32. The Advantages of the Diploma RESP +15% RESP + CESG + BONUS +20% RESP + CESG RESP Total deposits

  33. The Advantages of the Diploma RESP • Choosing Diploma is to offer yourself peace of mind knowing that your child will be able to pursue a post-secondary education if he wants to! • Allows your child to start his adult life on the right foot. • Even though he is small, you should start now!

  34. The Diploma RESP ... • For the grant • For the education bonus • For the tax-free accumulation • To diversify your investments • For the flexibility of changing the beneficiary • For the possibility of transferring investment income to your RRSP, if your child does not pursue a post-secondary education

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