Save towards your child’s post-secondary education and find out how the government can help you pay for it.

RESP GUIDE Registered Education Savings Plan

Heritage Education Funds RESPs are offered by Prospectus only.

A Canadian company with over $1.7 billion in assets under management.

OUR STRUCTURE

SUBSCRIBERS• Currently over 375,000 Subscribers• Parents• Grandparents• Other family members and friends

HERITAGE EDUCATION FUNDS INC.• Distributor of Registered Education Savings Plans (RESPs)• Education Savings Plans since 1965• Home Office in Toronto, Ontario • www.HeritageRESP.com

SALES REPRESENTATIVES• Provide professional RESP expertise, enrollment information, ongoing support and services

BRANCH OFFICES• Locations across Canada• Provide local Subscriber services and support

THE HERITAGE EDUCATIONALFOUNDATION• A non-profit Canadian corporation• Professional investment management and administration of Subscriber contributions and government grants• The Foundation has returned over $485 million in Savings and Educational Assistance Payments (EAPs) to students and parents since inception• Has received over $285 million in government grants to date• Plan is administered following the guidelines of National Policy 15• Governed by a Board of Directors

Heritage Educational Foundation

A Canadian company with over 45 years of RESP expertise, helping families from coast to coast.

Heritage Education Funds Inc.

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SALES REPRESENTATIVES• Provide professional RESP expertise, enrollment information, ongoing support and services

Key Partners

KEY PARTNERS

DepositoryThe Bank of Nova ScotiaCommercial Banking Centre625 Cochrane Drive, Suite 200Markham, Ontario, L3R 9R9

Registrar Heritage Educational Foundation

Trustee and CustodianRBC Dexia Investor Services TrustRBC Centre 155 Wellington Street West, Street Level Toronto, Ontario, M5W 1P9

AuditorsKPMG LLP (Chartered Accountants)Bay Adelaide Centre 333 Bay Street, Suite 4600 Toronto, Ontario M5H 2S5

External Legal CounselLang Michener LLPBCE Place P.O. Box 747 181 Bay Street, Suite 2500 Toronto, Ontario, M5J 2T7

Portfolio AdvisorScotia Cassels Investment Counsel LimitedP.O. Box 85 One Queen Street East, Suite 1200 Toronto, Ontario, M5C 2W5

Portfolio Advisor CIBC Wood Gundy181 Bay Street, Suite 600 Toronto, Ontario, M5J 2VB

Portfolio AdvisorUBS Bank (Canada) 161 Bay Street, Suite 3900, BCE Place, Toronto, Ontario, M5J 2S1

Insurance Provider Sun Life Assurance Company of Canada227 King Street S., P.O. Box 638, Stn. Waterloo Waterloo, ON N2J 4B8

DistributorHeritage Education Funds Inc.2005 Sheppard Avenue East, Suite 700 Toronto, Ontario, M2J 5B4

Acting as Depository for all Contracts, The Bank of Nova Scotia receives Contributions made by Subscribers, deducts Membership Fees and, if applicable, Insurance Premiums and remits the balance, together with any interest, to the Trustee who deducts Depository Fees and contributes the balance to the account maintained by the Trustee in trust for the Subscriber.

The Foundation acts as Registrar for the Plans.

RBC Dexia Investor Services Trust acts as Trustee of the Plans.

Are the Auditors of the Plans.

Is the External Legal Counsel for the Foundation.

Is a Portfolio Advisor for the Foundation assisting the Foundation in investing principal and investment income earned thereon.

Provides investment advice to the Foundation regarding certain investments.

Provides investment advice to the Foundation regarding certain investments.

Provides optional life and disability insurance protection.

Is the Distributor of the Plans.

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It is estimated that the full cost of a 4-year undergraduate degree from a Canadian university in 2028 could be over $130,000...

How much will it cost?

THE COST

Today’s average cost of a 4-Yearprogram beginning in 2009/2010 $29,958 $51,404

Average cost of a 4-Yearprogram in 2008/2009 was $28,345 $49,176

YOU ALREADY KNOW WHAT YOUR OPTIONS AREToday families without an RESP have to:

• Borrow the money

• Withdraw funds from their personal savings, retirement funds or investments

• Mortgage their home

• Pay-as-they-go

• Let their child earn the money or depend on student loans

Students with an RESP are more focused on their education, not the cost of it!

Year of Birth Year of School Entrance

Estimated Cost of Total Tuition for a 4-Year Program1

(At Home)

Estimated Cost of Total Tuition and Accommodation

for a 4-Year Program1

(Away from Home)

2010 2028 $85,734 $136,186 2009 2027 $81,118 $129,345 2008 2026 $76,751 $122,926 2007 2025 $72,619 $116,826 2006 2024 $68,709 $111,028 2005 2023 $65,010 $105,519 2004 2022 $61,510 $100,282 2003 2021 $58,199 $95,306 2002 2020 $55,066 $90,576 2001 2019 $52,101 $86,081 2000 2018 $49,296 $81,809 1999 2017 $46,642 $77,750 1998 2016 $44,131 $73,891 1997 2015 $41,755 $70,224 1996 2014 $39,507 $66,740

1 From 1995/1996 to 2006/2007 the average annual increase in the total cost of tuition was 5.69% and the average annual increase in the cost of accommodation was 4.53%. Source: Statistics Canada.

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What is an RESP and Why Invest in One?

THE SOLUTION

The Solution: A Registered Education Savings Plan (RESP)

RESPs are education savings vehicles registered by the Federal Government.• Contributors are known as the “Subscribers”• Children are known as the “Beneficiaries”

Savings are eligible for the Canada Education Savings Grant (CESG) andthe Canada Learning Bond (CLB), as well as Provincial Incentive Programs.

Heritage Education Funds RESPs are invested in safe and secure investments that earn a competitive and consistent return. If your child does not pursue post-secondary education, you may be allowed to withdraw and transfer the accumulated income of up to $50,000 of earnings per Subscriber from your RESP to your RRSP or spousal RRSP. t

Investment income on Contributions up to $50,000 are tax-sheltered until withdrawal.

Parents, grandparents, other family members and friends can all help to save towards the first year of a child’s post-secondary education and the Heritage Educational Foundation will provide EAPs (Educational Assistance Payments) towards one or more of the 2nd, 3rd and 4th year.

EDUCATION SAVINGS VEHICLE

GOVERNMENT GRANTS†

SAFETY, STABILITY AND FLEXIBILITY

TAX BENEFITS

ANYONE CAN START SAVING

Today many parents utilize government programs to help save towards their children’s future education.

What is the Canada Education Savings Grant† (CESG)?• Basic CESG: The Federal Government tops up your annual RESP contribution by 20%, up to $500 a year, per eligible child.• Additional CESG: Qualifying families may receive up to 40% on the first $500 of annual RESP contributions.• Both Basic and Additional CESG have a combined total lifetime maximum of $7,200 per eligible child.

What is the Canada Learning Bond† (CLB)?• For qualifying families who open an RESP, a $500 CLB from the Federal Government is available to help save for a child’s post-secondary education and will be deposited into the child’s RESP.• Annual CLB installments of $100 are also available in each subsequent year provided the family still qualifies.• Total available CLB grant is up to $2,000 per child for a qualifying family.

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The Key Benefits of InvestingInside an RESP vs. Outside an RESP

You could gain over $31,800 more!

The earlier your child is enrolled in a Heritage Education Funds RESP, the longer your savings have time to grow.

Start saving today and benefit from the power of compound growth.

Start early. Invest often. Stay invested.

KEY RESP BENEFITS

4 Interest earnings on CESG

3 Maximum CESG of $7,200

2 Compound Interest earnings on your investment

1 Your total personal contributions over 18 years

$45,000

$19,035

$64,035

Total Value Of Investment In 18 Years

Total Value Of Investment In 18 Years

$45,000

$36,593

$7,200

$7,054

$95,847

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Outside an RESP(NOT Tax-Sheltered)

6% Growth

Inside an RESP(Tax-Sheltered)

6% Growth

$120,000

$100,000

$80,000

$60,000

$40,000

$20,000

0Newborn Age 2 Age 4 Age 6 Age 8 Age 10

CESG and interest earned thereon

RESP Contributions and interest earned thereon

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2

The total value of investment may increase for those who qualify for CLB and/or provincial grants.

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2 Both of these examples are based on monthly contributions of $208.34 and exclude fees. Interest is calculated with an average annual rate of return of 6% compounded monthly over 18 years. This assumes the Basic CESG† which is equal to 20% of the total annual contributions to a maximum of $500 per eligible child, per calendar year. Non-RESP earnings assume a marginal tax rate of 40%. Individual circumstances and results may vary. Excludes fees.

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Two Types of RESPs

INDIVIDUAL (SELF-DIRECTED) RESP

Banks, Trust Companies, Life Insurance Companies, Financial Advisors, Mutual Fund Companies, Heritage Education Funds (Impression Plan RESP).

• Net principal savings.

• Interest on net savings.

• Some individual RESP providers do not offer access to all government grants.

• Interest on government grants.

1) Attrition may not be available.

2) Enhancements may not be available.

3) A choice of safe low returns or potentially riskier high returns may not be available.

4) Insurance protection may not be available3.

5) The mutual funds in which RESPs are invested are subject to an annual Management Expense Ratio (MER) fee and other fees such as trustee, administration and account fees that are charged regardless of fund performance. The average Canadian MER is 2.49%4. There also may be a sales commission typically ranging from 0% to 6% which is not returned.

GROUP (POOLED) RESP

Scholarship Plan Dealers such as HeritageEducation Funds (Heritage Plan RESP).

• Net principal savings.

• Interest on net savings.

• Access to all government grants.

• Interest on government grants.

1) Attrition may increase your return. In 2008, 8.2% of the total EAP came from attrition.

2) Enhancements may increase your return.

3) Secure investments such as municipal, provincial and federal bonds. Other investments include corporate bonds and principal protected notes.

4) Optional life and disability insurance protection†.

5) Similar to an MER, an administration fee of 0.50% and portfolio management fee of 0.05 to 0.20% is charged annually. The depository fee of $3.50 to $10.00 is levied based on the contribution method chosen. Up to 100% of the Membership Fees ($100 per unit) may be returned with Educational Assistance Payments depending on the Scholarship Option selected.

Discretionary payments (consisting of Membership Fee returns and enhancements) are not guaranteed. You should not count on receiving a discretionary payment. The Foundation decides if it will make a payment in any year and how much the payment will be.

TWO TYPES OF RESPS

Offered by:

Benefits:

Key Differences:

3 Some insurance companies who offer RESPs may provide life or disability insurance protection benefits (but most other providers do not).

4 Source: Morningstar Canada (08.31.09) 6

How do Heritage Plan RESPs work?

THE HERITAGE PLAN RESPs

SELF-DETERMINED OPTION(Self-Determined Plan, also knownas Self-Directed or Individual Plan)

LESS THAN 2 YR. PROGRAM

Allows a minimum 3 week program of study in different educational institutions

SCHOLARSHIP OPTION (Group Plan, also known as Pooled Plan)

Years

4 YR. PROGRAM OPTION 33 YR. PROGRAM OPTION 22 YR. PROGRAM OPTION 1

Allows up to 4 one-year programs of study in different educational institutions

Acceptance of Enrollment

Eligibility for CESG

Contribution Period

MATURITY

Pay-out Option Selection180 days prior to Maturity

(Maturity may be delayed or advanced by up to 2 years)†

35 YEARS OF RESP LIFETIME0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18

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SCHOLARSHIP OPTION

Used to fund 2nd year of post-secondary education and beyond. Paid to the Student, subject to tax.

An Educational Assistance Payment (EAP) advance installment is available.

SCHOLARSHIP OPTION 1†

ONE PAYMENT OF:

gov.grants + gov.grants interest + EAP

SCHOLARSHIP OPTION 2†

TWO PAYMENTS OF:

1/2 gov.grants + 1/2 gov.grants interest +

EAP

SCHOLARSHIP OPTION 3†

THREE PAYMENTS OF:

1/3 gov.grants + 1/3 gov.grants interest +

EAP

• Your savings are returned tax-free.

• EAPs are taxed at the student’s marginal rate which is typically the lowest tax rate.

• Each EAP consists of interest earned on savings, attrition and enhancement. An amount equal to 25%, 50% or 100% of your Membership Fees may be returned based on the Scholarship Option selected.

• Discretionary payments are not guaranteed. Discretionary payments consist of Membership Fee returns and enhancements to EAPs. You should not count on receiving a discretionary payment. The Foundation decides if it will make a payment in any year and how much the payment will be.

THE HERITAGE PLAN RESPs

Pay-Out Options

You select the Option that meets your requirements.

SELF-DETERMINED OPTION5

All of your earned interest, government grants and interest on government grants (if applicable)

paid to the Student, subject to tax.YOUR SAVINGS

RETURNED TO YOU TAX-FREEat the maturity of your plan.

Used to fund 1st year of post-secondary

education.

5 Student must enroll in a program of at least 3 consecutive weeks of not less than 12 hours per month in Canada or a 13 week full-time program outside of Canada. Accumulated income may be withdrawn as taxable income by the Subscriber less a 20% withholding tax (12% for residents of Quebec) or transferred to their RRSP or Spousal RRSP, up to a limit of $50,000 per Subscriber.

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HERITAGE PORTFOLIO

Your savings and government grants in your Heritage Plan RESP are placed in high quality investments that are safe and secure:

• Government Bonds (Federal, Provincial and Municipal)

• Guaranteed Investment Certificates (GICs) and similar debt obligations of a chartered bank, including Principal Protected Notes

• Variable Rate Securities

• Corporate Bonds

• T-Bills

The money in your Heritage Plan RESP is invested to earn a competitive and consistent return, so the money will be there when you need it.

Our customized savings solutions and pay-out options are designed to meet your individual financial needs and your child’s education objectives.

Where Does My Money Go?

Heritage Plan RESPs for the period ending September 30th, 2009

Heritage Plan RESPs Returns (Net of Fees)6

Portfolio Returns (Market)

Heritage Plan RESPs - Asset Weighting

Sector Allocations % of Market Value

Provincial Bonds 45.5%

Federal Bonds 31.6%

Principal Protected Notes 14.5%

Bank Notes/GICs 5.5%

Corporate Bonds 1.7%

Short-Term Investments 1.2%

31.6%

45.5%

1.2%

5.5%14.5%

1.7%

1 Year 3 Year 5 Year 10 Year

9.75% 4.76% 5.69% 6.82%

6 Investment returns have been calculated using market values and time-weighted cash flows during the periods.Past performance is not necessarily indicative of future returns.

But performance matters.........

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SAFE MONEY

You want your child’s savings to be safe!

* For a Heritage Plan RESP, option 3, where $100 per month was contributed over a period of 18 years and completed in 2009, and include all EAPs, CESG, attrition, enhancements and interest earned thereon.

Discretionary payments are not guaranteed. Discretionary payments consist of Membership Fee returns and enhancements to EAPs. You should not count on receiving a discretionary payment. The Foundation decides if it will make a payment in any year and how much the payment will be.

EAPs are Educational Assistance Payments. CESG is the Canada Education Savings Grant. Past performance is not necessarily indicative of future returns.

Heritage Education Funds’ Heritage Plan (HEFI**)10-year return on underlying portfolio

Canadian Money Market Funds*

Average of all funds in category with a 10-year history

Canada Savings Bonds*

Average rate of return over the 10-year period

Guaranteed Investment Certificates*

Average rate of return over the 10-year period

Canadian Bond Funds*

Average of all funds in category with a 10-year history* Source: Morningstar 09.30.09 ** Returns from Heritage Educational Foundation 09.30.09

4.8%

3.4%

2.5% 2.7%

6.82%

HEFI Plan* MoneyMarketFunds

GIC’sCSB’s BondFunds

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6

4

2

0

PERFORMANCE OF CONSERVATIVE INVESTMENTS

$32,035

$26,409

$21,472

$17,135 $13,320 $9,959 $6,994

ANNUAL RATE OF RETURN

NET GROWTH (INTEREST EARNED)ON $100 IN MONTHLY SAVINGS OVER 18 YEARS

$40,000

$35,000

$30,000

$25,000

$20,000

$15,000

$10,000

$5,000

$0

3% 4% 5% 6% 7% 8% 9%

$30,351Heritage Plan Growth*

Value of Investment after 18 years

But performance matters.........

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For more information please contact:

Heritage Education Funds Inc.2005 Sheppard Avenue East, Suite 700, Toronto, Ontario M2J 5B4Toll Free: 1.800.739.2101Phone: 416.502.2500Fax: 416.502.2555Email: customercare@heritageresp.com

When I was about one year old, my parents decided to invest the money they received from their family allowance into an RESP. I was not aware at that early age of the efforts my parents had to make to put money aside for my future, despite their modest income. Thanks to all their efforts, I will graduate this spring and I will be able to sleep without a care because I will have no student loan debt. Thank you Mom and Dad.

Valerie Michaud, Riviere-du-Loup, Quebec

My parents thought well ahead in planning to pay for my post-secondary education. I am going to make my parents proud by making effective use of their money and having a great career (my goal is to become a pharmacist). I am very lucky to be a Heritage beneficiary.

Shraddha Patel, Brampton, Ontario

Growing up in a low-income family, I was raised to understand the value of money and work towards my own goals. Because of my Heritage RESP, I am halfway towards earning my degree to become a registered nurse. I cannot thank my parents enough for thinking about my education early in my life.

Claire Horton, Fort Langley, B.C.

When I graduate, I will feel so relieved to be debt-free. I truly feel for my peers who have to rely on loans to pay for their education and the worries this brings to their life. So thank you Dad and thank you Heritage for guiding me financially through my university career.

Laura Campanaro, LaSalle, Ontario

Thanks to Heritage and my grandparents, I am able to pursue my professional dreams and volunteer my time to help great causes. I am pursuing medicine through a Bachelor of Science Major in Biology and I couldn’t have done it without my RESP!

Jessica Schnerch, Winnipeg, Manitoba

A Heritage RESP has given me the opportunity to pursue a post-secondary education without the constant worry of student loans. I am proud to say that I am about to accomplish one of many dreams (a B.A. in Sociology) but not without a thank you to my parents and Heritage.

Cindy Yong, Calgary Alberta

Having a Heritage RESP has allowed me to pursue an Honours Education degree. Since it is hard for me to get enough money through summer work, I can rely on Heritage to provide me with the support I need to pay my way through school.

Courtney MacAdam, Thorold, Ontario

Having a Heritage RESP has provided me with peace of mind and helped me stay focused on school and on the right path to achieve my goals.

Sivanithy Granapandithan, Toronto, Ontario

† Certain conditions apply. See Prospectus for full details. Heritage Education Funds is the trade name of Heritage Education Funds Inc.

Our Beneficiaries tell us how much having a Heritage RESP has meant to them :

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