On May 6, 2021, a subscriber vote was held to wind-up Heritage Group and Self-Determined Plans, transferring the RESPs into Knowledge First’s Family Single Student Plan, an individual RESP plan.
What were the outcomes of the Heritage Subscriber Vote?
As a result of the subscriber vote, all Heritage Group and Self-Determined Plans are being transferred into Knowledge First’s Family Single Student Education Savings Plan on March 1, 2022.
To carry out the proposed plan changes, a majority of votes cast in favour of the transfer by Group Plan and SDO customers was required. Overall, 70.70% of Heritage Group and 95.63% of Self-Determined plan holders that voted were in favour of the change.
These changes are being made for the overall benefit of our customers and students.
By transferring into an individual RESP plan, income on contributions are fully owned by you, decreasing risk, adding more flexibility and creating more certainty about what you have in your RESP when it comes time for your student to get a post-secondary education.
What are the main differences between a group and individual RESP plan?
Individual RESP plans provide greater flexibility, ownership and peace of mind for you and your student.
In a group RESP, income on contributions is pooled amongst customers and belongs to the plan, not you or your student. Students share the income within the group plan and may forfeit their right to it for a variety of reasons, including simply not claiming their income in time. Forfeited income is then distributed amongst the remaining students within the pool in the form of attrition income.
Only students who complete a traditional four-year post-secondary education program right after high school will realize the full benefit of their group RESP through attrition value.
In an individual plan, income on contributions is fully owned by you and your student. It is managed and held individually and not pooled together. No matter what contribution schedule or post-secondary path your student chooses, you are in control of the full value of your RESP and have the ability to change when, how or how much you save.
When it comes time for your student to withdraw from their RESP, they will also have full flexibility to determine how much they need and when to withdraw to help cover costs across their post-secondary education program. If your student decides to postpone, not pursue, or change their post-secondary education program, the plan’s income still belongs to you and can stay invested and grow over the entire 35-year life of your RESP.
You don’t need to do anything! We’ll take care of everything and ensure that all your plan’s assets are transferred into your new Knowledge First Single Student Savings Plan.
Will I have to pay anything to transfer into a Knowledge First Family Single Student Plan?
No, the plan transfer will be completely handled by Knowledge First Financial at no cost to you.
What, if any, are the fees associated with the new Family Single Student Plan?
The Family Single Student and Heritage Group RESP Plan share a very similar fee structure. Common fees that customers can expect to pay under the Family Single Student Plan include management fees that includes administration, custodial and portfolio management and IRC fees.
Can I transfer my Heritage Group or SDO Plan to a Knowledge First Financial Flex First Plan instead of a Family Single Student Plan?
No, you will not be able to transfer your Heritage Plan to a Flex First Plan.
Heritage Plans and Family Single Student Plans are more closely related and share a similar fee structure, therefore making it the best and most seamless option for customers.
Why can’t I choose to stay in, or transfer to a Heritage Self-Determined Option?
As a result of the subscriber vote, Heritage Group and Self-Determined Option Plans will be wound up following the transfer to Knowledge First’s Family Single Student Plan.
Given that the two plans will no longer exist, customers will not be able to keep their Heritage Group or Self-Determined Option Plans.
Will my RESP’s investment approach change as a result of the transfer?
Yes, the underlying investment approach will change to benefit you with a goal of protecting your contributions while maximizing their investment return over the life of your plan.
Per the plan’s prospectus, it will offer increased earning potential through a prudent investment strategy that provides more exposure to equities (to a maximum of 40%), but still invests mainly in Canadian fixed income securities to protect the value of your savings.
How will I be able to view the results of the plan transfer?
Following the plan transfer, Knowledge First Financial will send you an updated statement of account in the mail, which will include an overview of your plan and the impact of the changes made, among other things.
You will also be able to review the details of your new plan digitally by logging into the Knowledge First Financial Secure Site. Customers will receive instructions on how to do so once the plans have been transferred.