future invest in the now, i can realize my dreams

FUTUREFUTURE

INVESTINVESTIN THEIN THE

Now, I can realize my dreams...

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...

Giving your child the opportunity to pursue post-secondary studies is one of your most precious projects.

• Your goals are important for you and we understand.

• How can we help you realize them?

Your Child’s Future...

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

Is an Education Important?

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

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

The Cost of a University Education (over 4 years)

$14,932

$50,000

$23,540

$85,122

$0

$20,000

$40,000

$60,000

$80,000

$100,000

2003 2021

* Estimated with a 3% inflation rate

Child living at home

Child living away from home to study

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!

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

DIPLOMA … an

excellent savings vehicle for your child’s post-secondary education!

DIPLOMA … an

excellent savings vehicle for your child’s post-secondary education!

The RESP...

The People Involved...

SUBSCRIBER:• Parents, grandparents,

uncle, aunt, godfather, godmother

BENEFICIARY:• a child age 14 or under

$$$

C Contributions

The RESP

• The amounts invested in an RESP are made up of:

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

C Contributions

G The Grant

The RESP

• The amounts invested in an RESP are made up of:

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

The RESP

Investment income

• The amounts invested in an RESP are made up of:

Taxable only upon withdrawal

C Contributions

G The grant

I

Diploma Fund

40%

30%

20%

10%

Money Market

Fixed-incomesecuritiesCanadian Equities

U.S. indexinvestmentInternationalindex investment

35%

50%

7.5%5.0%

2.5%

Diploma Elementary Fund

Diploma Secondary Fund

Diploma Investment

Automatic rebalancing on the beneficiary’s birthday

Distribution of Diploma Assets

Exclusive Exclusive to to DIPLOMADIPLOMA

The RESP

Investment income

• The amounts invested in an RESP are made up of:

C Contributions

G The grant

I

B The education bonus

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)

MONTHLY PAYMENTS (PAC)

MONTHLY PAYMENTS (PAC)

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.

Late PAC

Plan duration Grace period

36 months and less 3 months

37 months and more 6 months

Fees are applicable at the end of the grace period

Diploma - Contributions

Issue

Grace period

3 to 6 months

Month

Surrender fees

Recuperation period

0 to 24 months

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

YOUR CHILD IS READY FOR POST-SECONDARY STUDIES

The Educational Assistance Payment (EAP)

EAP Beneficiary

The subscriber can withdraw contributionsC

G

I

BTAXABLE

NON-TAXABLE

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.

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

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

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

The Advantages of the Diploma RESP

RESP + CESG

RESP

Total deposits

RESP + CESG + BONUS

• 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!

The Advantages of the Diploma RESP

The Diploma RESPThe Diploma RESP...

For the grantFor the education bonusFor the tax-free accumulationTo diversify your investmentsFor the flexibility of changing the beneficiaryFor the possibility of transferring investment

income to your RRSP, if your child does not pursue a post-secondary education