R E G I S T E R E D E D U C A T I O N S A V I N G S P L A N

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

Contributions Grants Investment income Education bonus The accumulation in Diploma is made up of... Exclusive to Diploma

Contributions  PAC contributions up to the beneficiary’s age 18*  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 3 types of contributions:

Annual: $4,000 Lifetime: $42,000 Maximum contributions... Maximum per beneficiary for all RESPs held Maximum per beneficiary for all RESPs held

Contributions Grants The accumulation in Diploma is made up of...

The Canada Education Savings Grant (CES Grant) A gift from the government; Contirbutes to the plan’s success; Substantially increases the returns. Accumulated Deposits RESP RESP + CES Grant

 Beneficiary eligibility The CES Grant  Do 16 and 17-year-olds receive the grant?  Certain conditions apply.  Must be 17 years of age or younger;  Social insurance number;  Canadian resident.

The amount of the Grant:  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maximum;  $7,200 lifetime maximum;  Paid monthly by the Federal Government;  Tax deferred until the amounts are withdrawn;  Unused rights can be carried-over.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 CES Grant

Contributions Grants Investment income The accumulation in Diploma is made up of...

Investment Fund 40% 25% 10% « B » Fund S&P TSE 60 S&P 500 MSCI EAFE An index based investment fund Potential for superior returns Fixed proportions

Investment Fund Estimated annual returns * as at January 1, 2001 * net return

 Offers an optimal diversification between several asset classes  Simplified choice offering an index based management  Guarantee at death and maturity Investment Fund

Contributions Grants Investment income Education bonus The accumulation in Diploma is made up of... Exclusive to Diploma

The Diploma Education Bonus.  % of the total PAC contributions made;  A one time payment at the end of the commitment period. Example: Deposits: $100 X 12 X 18 years = $21,600 Bonus: $21,600 X 15% = $3, 240

LATE MONTHLY PAC PAYMENTS

Late PACs : process PAC’s stopped Issue months12 18 (0 to 24 months) 1. Grace period 2. Charge/fee 3. Reinstatement period (3 to 6 months)

Late PACs 1. Grace period

Late PACs 2. Charge/fee - RESP remains in force - Charge/fee is also applicable on surrender A charge/fee is applied to the Diploma contract at the end of the grace period

Charge/fee duration charge 6 months: $ months: $ months: $225 50% X PAC amount X number of PACs paid (max. 18) This charge is very competitive vs Enrolment fees of Scholarship Plans Example: $25/ month, age 0 No charges once commitment period ended

PAC’s stopped Issue 100% 75% 50% 25% months12 18 (0 to 24 months) If the PAC’s are paid back to the plan (without interest) : We reimburse the charge (a 24 month decreasing %) Late PACs 3. Reinstatement period (3 to 6 months)

PAC’s stopped Issue 100% 75% 50% 25% months12 18 (0 to 24 months) Late PACs : process 1. Grace period 2. Charges 3. Reinstatement period (3 to 6 months)

NEW RESP EDUCATIONAL ASSISTANCE PAYMENTS

When the subscriber requests the Educational Assistance Payment (EAP) for the beneficiary: EAP for the beneficiary «TAXABLE» The subscriber can withdraw contribution «NON-TAXABLE» Contributions Grants Investment income Education bonus

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 …INVEST IN THE FUTURE OF YOUR CHILDREN... RESP

NEW RESP An unbiased comparison between Diploma and Scholarship Trust Funds

Scholarship Trust funds