Frequently Asked Questions
About Us
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Who is Heritage Education Funds?
What is the Heritage Educational Foundation?
What does Heritage specialize in?
What is a Registered Education Savings Plan (RESP)? |
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Opening a New Plan
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I just had a new baby. How do I open a new Plan?
How can I increase the value of my Registered Education Savings Plan?
My friend has a child and wants to start saving towards the child’s future post-secondary education. Can I recommend Heritage? |
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Statement of Account
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How secure is my investment?
When I enrolled, I was told that a Heritage Plan has three unique features: refund of Membership Fees, attrition and enhancements. Is this still true?
What does the Closing Balance include?
Why is my Closing Balance different than the amount I contributed into the Plan?
I have started the plan prior to 2007 and my Opening Balance is zero. Why?
How is Interest calculated? |
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Government Grants
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What is the Canada Education Savings Grant (CESG)?
What is the Additional CESG?
How to apply for CESG?
Can I catch up on missed contributions?
Are there any other CESG provisions?
What is the Canada Learning Bond (CLB)?
How to apply for the Canada Learning Bond?
I have not applied for the Canada Learning Bond right away. Is this money lost to me?
How long do I have to apply for the Canada Learning Bond?
What is the Alberta Centennial Education Savings Plan Grant (ACES)?
How to apply for the Alberta Centennial Education Savings Plan Grant (ACES)?
What is the Quebec Education Savings Incentive (QESI)?
How to apply for the Quebec Education Savings Incentive (QESI)? |
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Plan Maturity and Educational Assistance Payments
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High school is over and a post-secondary education lies ahead. What now?
How Do I Get Money Out for Post-Secondary Education?
Do we have to send the Proof of Registration if we are only requesting the return of our own savings?
What are my Maturity Options?
What is a Scholarship Option?
What money do I receive under the Scholarship Option?
Does my Beneficiary receive any payments under the Scholarship Option?
When I enrolled, I was told that a Heritage Plan has three unique features: refund of Membership fees, attrition and enhancements. Is this still true?
Who is a Qualified Scholarship Student?
What is the Self-Determined Option?
What money do I receive under the Self-determined Option?
Does my Beneficiary receive any payments under the Self-determined Option?
Who is a Qualified Self-Determined Student?
What is an Educational Assistance Payment (EAP)?
What is a Post-Secondary Education (PSE) Capital Withdrawal?
What kind of programs qualify?
When do educational programs not qualify?
Is there a monetary limit to an EAP?
We have not heard from the school and do not know which option to pick yet. What should we do?
What do I do if the Beneficiary does not attend post-secondary studies?
I understand that there is a $75.00 late fee if I don’t submit my Educational Assistance Payment (“EAP”) documents before the August 15th deadline. If I am late in sending my documents, can I still apply for my EAP at a later date?
What do I do if I am only going to post-secondary studies part-time?
What do I do if I am only going to post-secondary studies in January?
My child is fast tracking through the program. Which option is best suitable for us?
What happens if my child is taking an apprenticeship or co-op program? What option is best suitable for us?
What is the Office of the Registrar?
Who needs to complete the Proof of Registration Form?
I’m not able to provide you with Proof of Registration by August 15th. Can I have an extension? If so, how long do I have to submit my documents and apply for the EAP?
What happens if my child hasn’t successfully completed the previous academic level?
What do you mean by “successful completion of the previous academic level”?
What if my child has failed a course/year? Does he/she get penalized?
If I receive an Educational Assistance Payment from Heritage, does it affect me receiving other bursaries and/or scholarships from other sources and vice-versa?
If I am applying for the Ontario Student Assistance Program (OSAP), do I have to claim my Educational Assistance Payment on my OSAP application?
What if my child has Indian status?
If my child will already be in 2nd academic level when my plan matures, can I apply for the EAP at the same time of the PSE withdrawal?
I thought that this plan would cover all costs for post-secondary. What I actually received is less and not enough. Why?
When do I receive the funds under the Scholarship Option and SDO option after all documents have been submitted to you?
What is the difference between a postponement and a deferral of an EAP? How long can I postpone/defer?
Can the maturity date be delayed? If so, how can it be?
Does my plan continue to accrue interest when I delay the Maturity Date?
Does my child get taxed on EAPs?
Do I get taxed on funds released from the plan?
Can my child study abroad and still receive funds from the plan? If so, are there any tax implications for this?
Can I substitute the beneficiary if my child decides not to pursue post-secondary studies?
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Investments
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How are my contributions invested?
How secure is my investment?
Why does Heritage use 6% in the Illustration of Benefits in the Statement of Account and Plan Illustrations whereas the current annual interest rates are below that?
Is the one year return of 3.81% reflective of market conditions? Why is it lower than the 3, 5 and 10 year returns?
What is Heritage doing to adapt to today’s market reality?
How will the state of global economy affect our portfolio? |
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Insurance
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What is Optional Insurance?
How does the Optional Insurance work?
What happens if me or my spouse die and there is no Insurance on my Plan?
Who qualifies for Insurance coverage?
What features are included under Optional Insurance?
How are Insurance Premiums calculated and applied?
I do not have Insurance on my Plan, but I would like to add it. What do I need to do?
If I cancel my Plan, do I get Insurance Premiums back? |
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Fees
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What fees or expenses must I pay for these Plans?
Are my Membership Fees returned?
When I enrolled, I was told that a Heritage Plan has three unique features: refund of Membership Fees, attrition and enhancements. Is this still true? |
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About Us
Who is Heritage Education Funds?
Heritage Education Funds is one of Canada’s leading Registered Education Savings Plan (“RESP”) providers. Established in 1965, Heritage Education Funds continues to help hundreds of thousands of families save for their children’s post-secondary education. To date we have helped more than 500,000 Canadians save for the post-secondary education for their children and grandchildren.
go back to FAQ list What is the Heritage Educational Foundation?
The Heritage Educational Foundation is a non-profit corporation with over $1.3 Billion in assets under management, created for the unique purpose of “encouraging and promoting the advancement of higher education through the provision of Educational Assistance Payments (EAPs) resulting from its Subscribers contributions to RESPs”. The Foundation also sponsors additional programs including the Heritage Post-Graduate Awards and the Heritage National Excellence Awards for Teachers (NEAT) in Early Childhood Education.
go back to FAQ list What does Heritage specialize in?
Unlike banks, mutual fund companies and financial planners, Heritage specializes in RESPs. In fact, we have over 40 years’ experience helping families reach their educational goals. Here’s how:
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Pooled funds benefit everyone
Every Heritage RESP is what's known as a pooled fund. It means that your contributions are combined with those of other members so you can benefit from a wider range of secure investment opportunities. |
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Risk isn't an option
Unlike the mutual funds offered by banks and mutual fund companies, your RESP is not at the mercy of the stock market. So you know it will be there when your child needs it. |
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Plans that deliver
Since 1988 Heritage has returned over $215 million to students and parents for the pursuit of higher education. |
go back to FAQ list What is a Registered Education Savings Plan (RESP)?
An RESP is an education savings plan registered under Canada’s Income Tax Act, which is established for the purpose of providing financial assistance to a Beneficiary (usually a child) when he or she pursues a post-secondary education. Income on savings within an RESP grows tax-sheltered until the child is ready for post-secondary education. The earnings are taxed in the hands of the student/Beneficiary, who typically pays little to no tax. In addition, RESPs may qualify for various government incentives that help parents, relatives and friends save for a child’s post-secondary education. Subscribers and Beneficiaries enrolled in an RESP must be Canadian residents and have a valid Social Insurance Number.
go back to FAQ list Opening a New Plan
I just had a new baby. How do I open a new Plan?
One of the easiest and best ways to help fund your child’s future post-secondary education is with a Heritage Registered Education Savings Plan. It is easy to get started and there are different ways to do so:
- You can conveniently submit your request on-line by logging into your secure Subscriber area at www.HeritageRESP.com or emailing us at customercare@heritageresp.com.
- You can call your Heritage Representative to discuss your educations savings objectives.
- Alternatively, you may call our Head Office at 416.502.2500
Whichever way you chose, we will help you set up a Plan that suits your financial needs and your child’s future education objectives.
go back to FAQ list How can I increase the value of my Registered Education Savings Plan?
The rising cost of education is not a surprise for parents, grandparents, family members and friends that are saving for a child’s post-secondary education. In fact, it is estimated that a 4-year undergraduate program at a Canadian university could cost over $120,000 in the year 2026.* Many parents have decided to invest additional funds in an RESP for their children. You can do it too!
If you are interested in adding to your Plan, there are different ways to do so:
- You can conveniently complete the contribution form online at www.HeritageRESP.com. Just log into your secure Subscriber area.
- You can call your Heritage Representative to arrange for review of your education savings goals.
- You can call our Head Office at 416.502.2500 or send us an email at customercare@heritageresp.com.
By contributing a little extra, you could significantly impact the aid that you provide your child when he/she is ready for post-secondary education.
*Source: Estimation based on Statistics Canada information.
go back to FAQ list My friend has a child and wants to start saving towards the child’s future post-secondary education. Can I recommend Heritage?
Absolutely! As you know our business depends on other people like you. We are interested in helping people who care about their children’s future and who want to help them be successful in life. We appreciate your help with introducing parents you know to the Heritage Plan. We encourage you to provide them with the contact information of your Heritage representative or direct them to visit our website at
www.HeritageRESP.com.
go back to FAQ list Statement of Account
How secure is my investment?
Heritage’s philosophy is to obtain the highest possible rate of return while ensuring the safety of Subscribers’ contributions. In the investment world there is no such thing as risk free investment; investments that provide an opportunity to earn greater returns are usually those that carry a greater element of risk. With a Heritage Plan all contributions and interest earned thereon are placed in lower-risk fixed and variable rate securities to maximize and secure your returns and minimize overall risk. In addition, you may also benefit from the Government Incentives that increase the value of your savings and earn tax-sheltered income and compounded growth within the Plan.
go back to FAQ list When I enrolled, I was told that a Heritage Plan has three unique features: refund of Membership Fees, attrition and enhancements. Is this still true?
Yes, it is. Depending on your pay-out option selection at Maturity, an amount equal to 25%, 50% or 100% of your Membership Fee may be returned to Beneficiaries with the Educational Assistance Payments (EAPs). You will not be eligible for return of Membership Fees if you select the Self-Determined Option. In addition to Membership Fees, each EAP has an added benefit of attrition and a discretionary payment from the Enhancement Fund.
Historically, the Foundation has always maximized EAPs with a refund of the applicable portion of Membership Fees, attrition and payments from the Enhancement Fund. For example in each of the last 5 years, approximately 1/3 of the EAP amount came from the Enhancement Fund. The Foundation’s general policy, established practice and future intentions are to provide for discretionary payments to maximize EAPs and to ensure ongoing long-term sustainability of enhancement payments.
The return of Membership Fees and payments from the Enhancement Fund are at the discretion of the Foundation.
Discretionary payments are not guaranteed. You should not count on receiving a discretionary payment. The Foundation decides if it will make a discretionary payment in each year.
go back to FAQ list What does the Closing Balance include?
The Closing Balance includes the addition of Interest allocation, your Contributions and Government Grants; and the deductions of Membership Fees, Depository Fees and Canada Learning Bond Admin Fee (if applicable).
go back to FAQ list Why is my Closing Balance different than the amount I contributed into the Plan?
- There is a difference between your Closing Balance and what you have put in to the Plan as your Total Contributions because the Closing Balance includes the addition of Interest allocation, your Contributions and Government Grants; and the deductions of Membership Fees, Depository Fees and Canada Learning Bond Admin Fee (if applicable).
- If you opened your Education Savings Plan recently, the Closing Balance amount on your Statement may indicate zero. When you join the Plan, there is a one time upfront Membership Fee of $100 per Unit. With Lump Sum plans the fee is deducted from the one time contribution. With Monthly and Annual plans the fee is paid through deductions from early contributions. If you are enrolled in a Monthly or Annual Plan, your early contributions are allocated to the Membership Fee. Once the Membership Fee is 50% paid, 1/2 of your remaining contributions will go to Principal and start earning Interest and 1/2 will continue to be allocated to Membership Fees until fully paid.
go back to FAQ list I have started the plan prior to 2007 and my Opening Balance is zero. Why?
If you did not provide your Beneficiary’s Social Insurance Number (SIN) within 24 months from the time of enrollment, your contributions were placed in an Escrow account awaiting the Beneficiary’s SIN. If you provided your Beneficiary’s SIN in 2007, we transferred the balance of your Escrow account into the new registered account that same year and treated the transfer as a new transaction with the opening balance of zero as per requirements of Human Resources and Social Development Canada (HRSDC).
go back to FAQ list How is Interest calculated?
Interest allocation in your Statement is based on the net balance in your account (i.e. after all deductions are made and upon any interest earned). Interest on Government Grants is calculated on the full amount of Grants less the $25.00 CLB Admin Fee (if applicable).
go back to FAQ list Government Grants
What is the Canada Education Savings Grant (CESG)?
Introduced in January 1998, CESG is a special financial incentive for parents, family and friends to save for a child’s education after high school. It provides people who invest in an RESP with a Basic CESG amount equal to 20% of yearly contributions, up to an annual maximum of
$500 per eligible child, with a lifetime maximum of
$7,200. go back to FAQ list What is the Additional CESG?
Depending on your family income, your child could receive additional funds in the form of additional CESG:
- If your net family income is below $37,178*, the grant will be 40% for every dollar on the first $500 you save and 20% of the next $2,000 in your child’s RESP each year. That means you could receive up to $600 in CESG per year.
- If your net family income is between $37,178* and $74,357*, the grant will be 30% for every dollar on the first $500 you save and 20% of the next $2,000 in your child’s RESP each year. That means you could receive up to $550 in CESG per year.
Please note, though, no matter which CESG formula you qualify for, the lifetime limit for each child remains at $7,200
*Based on 2007 indexation rates. This amount will be indexed to inflation for subsequent taxation years.
go back to FAQ list How to apply for CESG?
By following these simple steps:
- Register the birth or adoption of the child.
- Apply for a birth certificate.
- Apply for a Social Insurance Number (SIN) for the child. You can download the SIN application form here.
- Download the appropriate form for your CESG application:
- If you are a parent and/or legal guardian and are contributing to your child's RESP, download form HRSDC 0073 E
- If you are a grandparent, aunt, uncle or non-relative and are contributing to a child's RESP, download form HRSDC 0071 E
go back to FAQ list Can I catch up on missed contributions?
- If you opened your RESP in 1998 or later and haven't collected any grant money yet, you are entitled to a maximum of $400 for each year you missed up to and including the year 2006. Effective January 1, 2007, the maximum entitlement increased to $500 per eligible child per year.
- If you can't make your RESP contributions for one or more years, you're still entitled to receive CESG payments for those years. For instance, if you stop making RESP contributions for two years and then start contributing again, you'll be eligible for an amount of CESG that would have been allocated for the years in which the payment was not made. This applies to Basic CESG only; Additional CESG is not carried forward.
- Please note: for any contributions made before December 31, 2004, the deadline to apply for the Basic CESG was no later than December 31, 2007. Any contributions made from January 1, 2005, onward, you must apply for the Basic and/or Additional CESG within three years of the date you made the contributions.
- CESG payments and interest will be paid to the student when he or she enrolls in the second academic level of an eligible post-secondary program.
go back to FAQ list Are there any other CESG provisions?
There is a special rule for older Beneficiaries. In order to receive CESG when the Beneficiary is 16 or 17 years old, at least one of the following conditions must be met:
- A minimum of $2,000 of contributions must be made and not withdrawn in the year before the Beneficiary is 16 years old
- A minimum of $100 of annual contributions must be made and not withdrawn in at least any four years before the Beneficiary is 16 years old
go back to FAQ list What is the Canada Learning Bond (CLB)?
Families with children born in 2004 or later whose parent or guardian receives the National Child Benefit (NCB) Supplement qualify for the CLB. To receive NCB Supplement the family must have less than $37,178* net income.
The Canada Learning Bond provides a one-time initial contribution of $500 to an eligible child's Registered Education Savings Plan (RESP). If the parents or guardians continue to qualify and receive the NCB Supplement, the government will also provide an additional $100 for each year of eligibility until age 15. Over time, that could add up to as much as $2,000 in grant payments, plus interest.
*Based on 2007 indexation rates. This amount will be indexed to inflation for subsequent taxation years.
go back to FAQ list How to apply for the Canada Learning Bond?
- Register the birth or adoption of the child.
- Apply for a birth certificate.
- Apply for a Social Insurance Number (SIN) for the child. You can download the SIN application form here.
- Download the appropriate form for your CLB application:
- If you are a parent or legal guardian and are contributing to your child's RESP, download form HRSDC 0073 E
- If you are a grandparent, aunt, uncle or non-relative and are contributing to a child's RESP, download form HRSDC 0071 E
go back to FAQ list I have not applied for the Canada Learning Bond right away. Is this money lost to me?
Not at all. Your child is eligible for the CLB commencing with the year of birth or the year your child became a Canadian resident. If you have not applied for the CLB right away, the Federal Government will still make payments for the previous years. All you need to do is to apply for the CLB (see How to apply for the Canada Learning Bond).
go back to FAQ list How long do I have to apply for the Canada Learning Bond?
You have up until your child turns 18 to apply for the Canada Learning Bond, but the earlier you apply, the sooner the grant money will start to grow in an RESP.
go back to FAQ list What is the Alberta Centennial Education Savings Plan Grant (ACES)?
The Alberta Centennial Education Savings Plan Grant (ACES) is provided by the Alberta government for any child born to or adopted by residents of Alberta in 2005 or later.
The grant starts with a one-time initial contribution of $500 to an eligible child's RESP. The government provides three subsequent grants of $100 to an eligible child's RESP for children attending school in Alberta at ages 8, 11 and 14. To receive the subsequent grants, a minimum matching contribution of $100 must be made to an RESP in the year prior. In total, $800 in grant money is available per eligible child.
go back to FAQ list How to apply for the Alberta Centennial Education Savings Plan Grant (ACES)?
You need to apply for the initial $500 ACES grant and for each of subsequent $100 grants separately.
To apply for the initial $500 ACES grant:
- Register the birth or adoption of the child.
- Apply for a birth certificate. You can do it at any Alberta registries outlet.
- Apply for a Social Insurance Number (SIN) for your child (at any Canada/Alberta Service Centre). You can download the SIN application form here.
- Download the ACES application here; you'll find a step by step guide to help you complete the ACES application form here.
To apply for the subsequent $100 ACES grant:
If you and your child are eligible, in order to get the subsequent $100 ACES grant, all you need to do is:
- Following the guidelines above, open up a Plan, if you do not already have one.
- Download the ACES application form, you can also download a step by step guide to help you complete the ACES application form.
What is the Quebec Education Savings Incentive(QESI)?
The Government of Quebec introduced the Quebec Education Savings Incentive (QESI) to further encourage Quebec families to save for their children’s post-secondary education. This incentive is paid in the form of a refundable tax credit by Revenue Quebec the Registered Education Savings Plan (RESP) of the Beneficiary. The Beneficiary must be a resident of Quebec. The QESI is comprised of a basic and an increased credit and is subject to a lifetime maximum of $3,600 per Beneficiary.
go back to FAQ list How to apply for the Quebec Education Savings Incentive (QESI)?
• Register the birth or adoption of the child.
• Apply for a birth certificate.
• Apply for a Social Insurance Number (SIN) for the child. You can download the SIN application from
here.
• Open a Registered Education Savings Plan (RESP) with an RESP provider such as Heritage Education Funds.
Once an RESP for your child is set up, Heritage will apply annually to Revenue Quebec for the QESI monies to be paid into your RESP. You are not required to fill out any paperwork or make an application for the QESI on your income tax return.
go back to FAQ list
Plan Maturity and Educational Assistance Payments
High school is over and a post-secondary education lies ahead. What now?
In April of the year your Heritage Plan is scheduled to mature, we will be sending you an information package that will guide you through the steps of the Maturity process.
go back to FAQ list How Do I Get Money Out for Post-Secondary Education?
On or after the Maturity Date, the Principal is returned to the Subscriber or, on instruction by the Subscriber, to the Subscriber’s Beneficiary. The Principal may be, but is not required to be, used for the costs of the first year of attendance at a post-secondary institution.
go back to FAQ list Do we have to send the Proof of Registration if we are only requesting the return of our own savings?
Under a Scholarship Option, we require the Proof of Registration that confirms the Beneficiary is enrolled full-time to release the Principal. Under the SDO, if the Beneficiary is not expected to enroll in a post-secondary education program, you may request to have your Principal less applicable fees returned without providing the Proof of Registration, but the government grants (if applicable) will be forfeited and returned to the Government.
go back to FAQ list What are my Maturity Options?
There are two maturity options under the Heritage Plans:
- The Scholarship Option (continuing in the Group Plan)
- The Self-Determined Option (continuing in the Self-Determined Plan)
Under the Scholarship Option there are three alternatives to select from, with Educational Assistance Payments made in one, two or three years. Your selection will usually depend on the type of Post-Secondary Program your child has entered or proposes to enter. Alternatively, you may select the Self-Determined Option.
go back to FAQ list What is a Scholarship Option?
If your child enrolls in a 2, 3 or 4-year program, the Scholarship Option is the right choice.
go back to FAQ list What money do I receive under the Scholarship Option?
With the Scholarship Option, your RESP contributions (less fees) are returned to you tax free at maturity. These can be used to fund your Beneficiary's first year of a post-secondary education.
go back to FAQ list Does my Beneficiary receive any payments under the Scholarship Option?
Yes. Depending on the length of the program your child attends, you can decide how the Educational Assistance Payments (EAPs) should be given out to your Beneficiary. There are three payout options available:
- For students attending a 2-year program, Option #1 provides 1 EAP that consists of:
- Income*.
- Proportion of the Income* on Contributions for terminated Plans with the same Year of Eligibility.
- Accumulated CESG, CLB, ACES and QESI (if applicable) and the interest earned thereon.
- Discretionary payment from the Enhancement Fund.
- An amount equal to 25% of Membership Fees may be paid at the time of the EAP.
- For students attending a 3-year program, Option #2 provides 2 annual EAPs, where each payment consists of:
- Income* with the funds paid over two years and distributed with each EAP.
- Proportion of the Income* on Contributions from terminated Plans with the same Year of Eligibility with the funds paid over two years and distributed with each EAP.
- An amount equal to 50% of accumulated CESG, CLB, ACES and QESI (if applicable) and the interest earned thereon paid with each EAP.
- Discretionary payment from the Enhancement Fund.
- An amount equal to 50% of Membership Fees may be paid in two equal installments with the EAPs.
- For students attending a 4-year program, Option #3 provides 3 annual EAPs, where each EAP consists of:
- Income* with the funds paid over three years and distributed with each EAP.
- Proportion of the Income* on Contributions from terminated Plans with the same Year of Eligibility with the funds paid over three years and distributed with each EAP.
- An amount equal to 33.3% of accumulated CESG, CLB, ACES and QESI (if applicable) and the interest earned thereon paid with each EAP.
- Discretionary payment from the Enhancement Fund.
- An amount equal to 100% of the Membership Fees may be paid in three equal installments with the EAPs.
Discretionary payments that consist of enhancements and Membership Fees returns 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.
* In each year the available Income, including that from terminated Plans, is divided by the number of Units of Qualified Students who have selected the same number of EAPs and the result is multiplied by the number of Units held with respect to the particular Qualified Student and distributed as part of the EAP.
go back to FAQ list When I enrolled, I was told that a Heritage Plan has three unique features: refund of Membership fees, attrition and enhancements. Is this still true?
Yes, it is. Depending on your pay-out option selection at Maturity, an amount equal to 25%, 50% or 100% of your Membership Fee may be returned to Beneficiaries with the Educational Assistance Payments (EAPs). You will not be eligible for return of Membership fees if you select the Self-Determined Option. In addition to Membership fees, each EAP has an added benefit of attrition and a discretionary payment from the Enhancement Fund.
Historically, the Foundation has always maximized EAPs with a refund of the applicable portion of Membership fees, attrition and payments from the Enhancement Fund. For example in each of the last 5 years, approximately 1/3 of the EAP amount came from the Enhancement Fund. The Foundation’s general policy, established practice and future intentions are to provide for discretionary payments to maximize EAPs and to ensure ongoing long-term sustainability of enhancement payments.
The return of Membership Fees and payments from the Enhancement Fund are at the discretion of the Foundation.
Discretionary payments are not guaranteed. You should not count on receiving a discretionary payment. The Foundation decides if it will make a discretionary payment in each year.
go back to FAQ list Who is a Qualified Scholarship Student?
A Beneficiary whose Subscriber has not selected the Self-Determined Option (SDO), who is attending a post-secondary program for full-time in each year including and subsequent to the Year of Eligibility at a "Recognized Institution”, as defined by the Ministry of Education as a Post-Secondary Institution.
go back to FAQ list What is the Self-Determined Option?
The Self-Determined Option is designed specifically for Beneficiaries enrolled in a post-secondary program shorter than two years.
go back to FAQ list What money do I receive under the Self-determined Option?
With the Self-Determined Option, you, the Subscriber, may withdraw your principal any time after the Maturity Date, less applicable fees. Then, as long as your Beneficiary is in attendance at a post-secondary program offered by a recognized institution, he or she is eligible to receive Self-Determined Payments.
go back to FAQ list Does my Beneficiary receive any payments under the Self-determined Option?
Yes, your Beneficiary will receive Self-Determined Payments, which are made up of all interest which has accrued on your Heritage Plan principal, all Canada Education Savings Grant, Canada Learning Bond, Alberta Centennial Education Savings Grant and Quebec Education Savings Incentive, where applicable, and the interest earned on those grants. Self-Determined Payments can be applied to any post-secondary education costs, including tuition, books, residence, and other legitimate education expenses.
go back to FAQ list Who is a Qualified Self-Determined Student?
A Beneficiary whose Subscriber has selected the SDO, who is attending a post-secondary program in the Self-Determined Year of Eligibility, and at any subsequent time when the Self-Determined Payments with respect to such Beneficiary are requested to be paid.
go back to FAQ list What is an Educational Assistance Payment (EAP)?
An EAP is any amount paid or payable under an RESP to or for an individual, called the Beneficiary, to assist with the individual’s education at the post-secondary school level. These amounts do not include refunds of contributions made by Subscriber(s) of the plan.
go back to FAQ list What is a Post-Secondary Education (PSE) Capital Withdrawal?
PSE Capital Withdrawal is a withdrawal of contributions made by the Subscriber(s). If the Beneficiary is pursuing a post-secondary education, the Subscriber(s) may withdraw the contributions without being required to repay any grant amounts. The Subscriber(s) must sign the request for PSE Capital Withdrawals, which we call the Heritage Plans Maturity Application. Proof of Registration is required.
go back to FAQ list What kind of programs qualify?
In Canada, program(s) must be at the post-secondary level which lasts at least three consecutive weeks and requires a student to spend no less than 12 hours per month on courses. If the Beneficiary is studying outside of Canada, program(s) must be at least 13 consecutive weeks long and no less than 10 hours per week.
go back to FAQ list When do educational programs not qualify?
Educational programs do not qualify if taken at a time during which the student is receiving employment income (excluding part-time or temporary employment to finance studies) and the program is taken in connection with, or as part of the student’s employment.
go back to FAQ list Is there a monetary limit to an EAP?
If the Beneficiary is registered for at least 3 consecutive weeks and no less than 12 hours per month, the maximum amount that may be released for each 13-week semester of study is $2,500. The Beneficiary must continue studies to qualify for additional payments. If the Beneficiary is registered for full-time studies, the maximum amount of an EAP that can be made to a student as soon as he/she qualifies to receive them is $5,000. After the student has completed 13 consecutive weeks, there is no limit on the amount of EAPs that can be paid if the student continues to qualify to receive them. If there is a 12-month period in which the student was not enrolled in a qualifying educational program for 13 consecutive weeks, the $5,000 maximum applies again. Any subsequent withdrawal within the same year will be subject to a $10.00 processing fee.
go back to FAQ list We have not heard from the school and do not know which option to pick yet. What should we do?
You must select an option if you require funds from your RESP to pay for post-secondary costs in 2008. You have until July 31st of this year to select an option. The deadline cannot be extended. If the Beneficiary is not going to enroll in a post-secondary education program for the 2008-2009 academic year, please request to delay the Maturity Date before July 1, 2008. A maximum of two delays from the original Maturity Date are permissible.
go back to FAQ list What do I do if the Beneficiary does not attend post-secondary studies?
If your child decides not to pursue a post-secondary education and you have selected the SDO, you may withdraw your Principal and:
- Contribute the Interest into your or your spouse’s RRSP (if your spouse is a joint Subscriber) provided that you have contribution room available and that the conditions for an Accumulated Income Payment (AIP) have been met.
- If you do not have RRSP contribution room available and you make a withdrawal on your Principal and Interest earned, CRA will levy a 20% additional penalty on the withdrawn funds (other than Principal), on top of your regular tax rate.
go back to FAQ list I understand that there is a $75.00 late fee if I don’t submit my Educational Assistance Payment (“EAP”) documents before the August 15th deadline. If I am late in sending my documents, can I still apply for my EAP at a later date?
Yes, a Beneficiary can still apply for the EAP at a later date up until January 31st of the following year provided the required documents are forwarded to the Foundation along with a cheque, payable to Heritage Educational Foundation to cover the late fee of $75.00.
go back to FAQ list What do I do if I am only going to post-secondary studies part-time?
Under the Scholarship Option, a Beneficiary (student) must attend full-time for at least six months of the year at any post-secondary institution in Canada or elsewhere recognized by the Foundation, including a full-time program being attended through correspondence or distance-education courses. Part-time registration will not enable the Beneficiary to receive Educational Assistance Payment (s) under the Scholarship Option.
Under the Self-Determined Option, a Beneficiary (student) can access up to $2,500 of the income and grants for each 13-week semester of study. The Beneficiary will be required to register in a post-secondary course that lasts at least 3 consecutive weeks long and no less than 12 hours per month. Official confirmation from the Office of the Registrar will be required to facilitate this payment.
go back to FAQ list What do I do if I am only going to post-secondary studies in January?
When the Beneficiary (student) receives the EAP package in April or May of any given year, he/she may request to put the EAP on hold until January 31st of the following year. This extension may be requested in writing from the Beneficiary by completing the EAP Application, by calling the Customer Service Team at 416.502.2500/1.800.739.2101, or by contacting us via email at customercare@heritageresp.com.
go back to FAQ list My child is fast tracking through the program. Which option is best suitable for us?
Each condensed program has different criteria for completion which is regulated by each post-secondary institution where these programs are offered. For example, if a Beneficiary (student) is going to take 3 years to complete a 4-year program, there may be an opportunity for the Beneficiary to receive all 3 EAPs under the Scholarship Option. For further details, please contact our Customer Service Team by phone at 416.502.2500/1.800.739.2101 or by e-mail at customercare@heritageresp.com.
go back to FAQ list What happens if my child is taking an apprenticeship or co-op program? What option is best suitable for us?
Canada Revenue Agency regulations confirm that apprenticeship programs qualify if the institution certifies that the program is a minimum of two years in length, the Beneficiary is in class for a minimum of six months per year, the work portion of the program is part of the curriculum, and that the Beneficiary does not get paid for the work term. The program will not qualify if it is taken at a time during which the student is receiving employment income (excluding part-time or temporary employment to finance studies) and the program is taken in connection with, or as part of, the student’s employment. For most apprenticeship programs, students are paid for training/learning the trade therefore, the Self-Determined Option is most suitable so that the Principal, Interest, and Canada Education Savings Grant (if applicable) is released while the Beneficiary is registered in classes prior to their hands-on training.
go back to FAQ list What is the Office of the Registrar?
The Office of the Registrar is the office that can be located at your post-secondary institution through which you register for your post-secondary courses. They are also responsible for the record keeping of all students’ files and course information.
go back to FAQ list Who needs to complete the Proof of Registration Form?
The Beneficiary (student) is required to complete the Personal Information section of the Proof of Registration form, sign, and date the form. The rest of the form must be completed, signed, and stamped/sealed by the Office of the Registrar at the post-secondary institution.
Please note that the completed Proof of Registration form must be mailed to us for processing. Alternatively, we will accept a faxed copy transmitted from the Office of the Registrar only.
go back to FAQ list I’m not able to provide you with Proof of Registration by August 15th. Can I have an extension? If so, how long do I have to submit my documents and apply for the EAP?
After receiving the EAP package in April or May in any given year and the Beneficiary (student) realizes that he/she will not be able to submit the Proof of Registration form or the EAP Application before the August 15th deadline, he/she must request for an extension. This extension is automatically granted up until January 31st of the following year and may be requested in writing from the Beneficiary by completing the EAP Application, by calling the Customer Service Team at 416.502.2500/1.800.739.2101, or by contacting us via email at customercare@heritageresp.com. Please note that the sooner the Foundation receives the EAP Application and the Proof of Registration form, the earlier the EAP will be released.
go back to FAQ list What happens if my child hasn’t successfully completed the previous academic level?
If the Beneficiary is eligible to apply for an EAP however he/she has not completed the previous academic level successfully, he/she may request to postpone the first EAP for a maximum of two years after the maturity date; one year at a time, to the beginning of the next EAP season. Further postponements may be granted by the Scholarship Committee at its discretion, under extenuating circumstances. If the first EAP has already been released and the Beneficiary is eligible to apply for the second or third EAP, a deferral may be granted for a maximum of one year, to the beginning of the next EAP season. Further deferrals may be granted by the Scholarship Committee at its discretion, under extenuating circumstances.
go back to FAQ list What do you mean by “successful completion of the previous academic level”?
Successful completion means that the Beneficiary (the student) has completed and met the course requirements as determined by the post-secondary institution and is able to enroll in his/her next academic level.
go back to FAQ list What if my child has failed a course/year? Does he/she get penalized?
If the Beneficiary is eligible to apply for an Educational Assistance Payment (“EAP”) however has not completed the previous academic level successfully, you may request to postpone the first EAP for a maximum of two years after maturity; one year at a time, to the beginning of the next EAP season. Further postponements may be granted by the Scholarship Committee at its discretion. If the first EAP has already been released and the Beneficiary is eligible to apply for the second or third EAP, a deferral may be granted for a maximum of one year, to the beginning of the next EAP season. Further deferrals may be granted by the Scholarship Committee at its discretion.
go back to FAQ list If I receive an Educational Assistance Payment from Heritage, does it affect me receiving other bursaries and/or scholarships from other sources and vice-versa?
Your Educational Assistance Payments under the Heritage Plan are not affected by other bursaries and/or scholarships from other sources. These payments may in turn affect payments from other sources such as OSAP assistance. Please check with the bursary/scholarship provider for confirmation.
go back to FAQ list If I am applying for the Ontario Student Assistance Program (OSAP), do I have to claim my Educational Assistance Payment on my OSAP application?
If the Beneficiary (student) is eligible to receive an EAP for the academic year, the approximate amount must be reported on the OSAP application as the Beneficiary’s income since it will be reported on his/her taxes.
go back to FAQ list What if my child has Indian status?
If the Beneficiary’s status is Native Indian, the RESP Contract is not affected when releasing funds for Maturity and EAPs. The Beneficiary will be required to complete the proper documents and submit the Proof of Registration in order to receive the payments, just like any other student. The only difference is that he/she may not be required to pay taxes for the EAP amounts received due to their status. You may obtain further clarification from Canada Revenue Agency regarding tax implications @ 1.800.959.1956.
go back to FAQ list If my child will already be in 2nd academic level when my plan matures, can I apply for the EAP at the same time of the PSE withdrawal?
Yes you can. Question # 5 and 7 on the Maturity Application enables you to request for an EAP at maturity.
go back to FAQ list I thought that this plan would cover all costs for post-secondary. What I actually received is less and not enough. Why?
When Subscribers open a RESP plan for their child (the Beneficiary), they purchase units based on the contributions that they are willing to make – each unit has a cost respective to the Beneficiary’s age. The EAPs are made on a per unit basis when the child attends 2nd, 3rd, and 4th year of post-secondary studies – the higher the number of units purchased, the higher the payment available to the Beneficiary. Consequently, EAPs may cover a potion of costs associated with post-secondary education but may not necessarily cover all costs incurred as the payments depend on the number of units purchased by the Subscribers and the amount available for payment on a per unit basis.
go back to FAQ list When do I receive the funds under the Scholarship Option and SDO option after all documents have been submitted to you?
The payments are released during the first two weeks in August of the maturity year under either option.
go back to FAQ list What is the difference between a postponement and a deferral of an EAP? How long can I postpone/defer?
A postponement of an EAP is applicable for the first EAP when the Beneficiary is expected to be registered for full-time in the 2nd year of post-secondary studies. The first EAP may be postponed for a maximum of 2 years, one year at a time, by August 15th of the Year of Eligibility (this is a year after the Maturity Date of the Contract). Further postponements may be granted to the Beneficiary, under extenuating circumstances, at the discretion of the Scholarship Committee. A letter of appeal from the Beneficiary along with supporting documents will be required for submission to the Committee prior to the deadline.
A deferral of an EAP is applicable for the second or third EAP when the Beneficiary is expected to be registered for full-time in 3rd or 4th year of post-secondary studies, respectively. There is only one deferral permissible under the terms and regulations of the RESP Contract. Further deferrals may be granted to the Beneficiary, under extenuating circumstances, at the discretion of the Scholarship Committee. A letter of appeal from the Beneficiary along with supporting documents will be required for submission to the Committee prior to the deadline.
go back to FAQ list Can the maturity date be delayed? If so, how can it be?
The Maturity Date can be delayed for a maximum of 2 years, one year at a time, and requested for by July 1st in the year of maturity. This option can be selected on the Maturity Application under question 2 Alternatively, Subscribers may also request to delay the Maturity Date by sending a signed letter before the July 1st deadline.
go back to FAQ list Does my plan continue to accrue interest when I delay the Maturity Date?
Yes. If a Scholarship Option is selected prior to maturity, the Plan will continue to earn interest which will be transferred to the Scholarship Pool and shared by all the Beneficiaries who have the same Year of Eligibility. This may not directly enhance the EAP received by the Beneficiary.
If the Self-Determined Option is selected at maturity, the Plan will continue to earn interest which will be available to the Beneficiary or the Subscriber(s) when a request to release the interest is made.
go back to FAQ list Does my child get taxed on EAPs?
Yes, the child (Beneficiary) will be responsible to pay regular tax on the EAPs received. Since the income tax bracket is very low for the Beneficiary, he/she may not be taxed as much for the amounts received. A T4 slip will be mailed in February of the year following the EAP payment enabling the Beneficiary to file for the taxes applicable.
go back to FAQ list Do I get taxed on funds released from the plan?
The Principal withdrawn from the RESP is not tax deductible. The EAP payments to the Beneficiary are taxable to the Beneficiary. Under the Self- Determined Option, if the Beneficiary does not pursue post-secondary studies and the Subscriber(s) withdraws the interest accrued in cash, they will be required to pay the regular tax on the amount received plus an additional 20% penalty tax to the Government.
go back to FAQ list Can my child study abroad and still receive funds from the plan? If so, are there any tax implications for this?
Yes, your child (the Beneficiary) can receive EAPs even if he/she studies abroad. There will be a tax penalty of up to 25% applicable on each EAP withdrawal if your child is not a Canadian resident at the time the EAP is paid. You may contact Canada Revenue Agency @ 1.800.267.5177 to determine the residency status of your child if he/she will study abroad to determine if tax implications will be applicable.
go back to FAQ list Can I substitute the beneficiary if my child decides not to pursue post-secondary studies?
Yes as long as the following conditions are met under each option.
If the Scholarship Option has been selected:
- Both Beneficiaries are under 21 years of age
- The new Beneficiary is younger then the original Beneficiary
- An EAP has not been released to the current Beneficiary
- To transfer the Canada Education Savings Grant (“CESG”) to the new Beneficiary, the new Beneficiary must be a brother or sister of the original Beneficiary or related to the Subscriber by blood or adoption. Otherwise, the CESG will be repaid to the Government.
- To transfer the Alberta Centennial Education Savings (“ACES”) to the new Beneficiary, the new Beneficiary must be a brother or sister of the original Beneficiary. Otherwise, the ACES will be repaid to the Government.
- To transfer the Quebec Education Savings Incentive ("QESI") to the new Beneficiary, the new Beneficiary must be a sibling of the original Beneficiary or related to the Subscriber by blood or adoption. The new Beneficiary must also be a resident of Quebec. Otherwise, the QESI will be repaid to the Government.
- The Canada Learning Bond (“CLB”) will be returned to the Government since this is not transferable.
- If the Self-Determined Option has been selected:
- A substitution may occur at any time with no age restriction
- An EAP has not been released to the current Beneficiary
- To transfer the Canada Education Savings Grant (“CESG”) to the new Beneficiary, the new Beneficiary must be a brother or sister of the original Beneficiary or related to the Subscriber by blood or adoption. Otherwise, the CESG will be repaid to the Government.
- To transfer the Alberta Centennial Education Savings (“ACES”) to the new Beneficiary, the new Beneficiary must be a brother or sister of the original Beneficiary. Otherwise, the ACES will be repaid to the Government.
- To transfer the Quebec Education Savings Incentive ("QESI") to the new Beneficiary, the new Beneficiary must be a sibling of the original Beneficiary or related to the Subscriber by blood or adoption. The new Beneficiary must also be a resident of Quebec. Otherwise, the QESI will be repaid to the Government.
- The Canada Learning Bond (“CLB”) will be returned to the Government since this is not transferable
- If the new Beneficiary is older than the original Beneficiary, grants will be repaid to the Government.
Investments
How are my contributions invested?
Your contributions and interest earned are invested in lower-risk, fixed or variable securities like Guaranteed Investment Certificates, Federal and Provincial Bonds, Corporate Debt Securities, Term Deposits, Government Treasury Bills, Mortgage-backed securities and principal protected notes that earn a consistent and competitive return.
go back to FAQ list How secure is my investment?
Heritage’s philosophy is to obtain the highest possible rate of return while ensuring the safety of Subscribers’ contributions. In the investment world there is no such thing as risk free investment; investments that provide an opportunity to earn greater returns are usually those that carry a greater element of risk. With a Heritage Plan all contributions and interest earned thereon are placed in lower-risk fixed and variable rate securities to maximize and secure your returns and minimize overall risk. In addition, you may also benefit from the Government Incentives that increase the value of your savings and earn tax-sheltered income and compounded growth within the Plan.
go back to FAQ list Why does Heritage use 6% in the Illustration of Benefits in the Statement of Account and Plan Illustrations whereas the current annual interest rates are below that?
Our subscribers invest in the Heritage Plan for an average of 15 years, so we must forecast the rate of return for a comparable long-term period. The 6% rate of return is used for illustration purposes only and is a reflection of our long term expectations.
go back to FAQ list Is the one year return of 3.81% reflective of market conditions? Why is it lower than the 3, 5 and 10 year returns?
Yes, our one year return is reflective of the market volatility. However, there are some important points to keep in mind. First, we are not alone experiencing these effects. Second, the Heritage Plan is a long term investment vehicle in which the minimum subscriber’s investment period (the length of the contribution period) is 4 years and the historical average investment period is approximately 15 years. Thus, the objective of the investment portfolio is to outperform the benchmark portfolio over a rolling 4 year period, not on a yearly return basis.
With mid- to long-term investments, it is important to remain mindful of economic trend durability as opposed to short term volatility and market corrections. Inevitably, there will be brief time periods in which returns are lower than long-term rates; yet staying focused on a long-term strategy is the key to stable growth. Our goals are to maximize long-term returns while minimizing overall risk to our subscribers’ contributions. In order to achieve these goals, subscribers’ contributions are placed in a portfolio that consists of government fixed-income and variable rate investments.
go back to FAQ list What is Heritage doing to adapt to today’s market reality?
Heritage will continue to employ investment strategies that enhance our rate of return and protect our invested principal. First, a large portion of our bond portfolio is positioned in 5 to 10 year term maturities. We expect lower short-term central bank administered rates in North America and a steeper yield curve, which will benefit the bond portfolio. Relative to other asset classes, our core bond holdings had a strong year with a 4.69% one year return as of December 31, 2007. The overall Portfolio return, including Structured Notes that were purchased in 2007, was 3.81% as of December 31, 2007. This weaker than expected overall return was a result of market volatility and global liquidity concerns, yet our bond portfolio still outperformed relative to the benchmark.
In 2008, our core bond holdings are positioned to take advantage of wider provincial and corporate spreads relative to the Government of Canada yield curve. Also, we continue to be positioned for lower short-term central bank administered rates in North America and a steeper yield curve, which will benefit our returns. Furthermore, we will continue to hold Principal Protected Structured Notes. While they did not perform well in 2007, our expectations are that they will gain momentum in the coming years. In 2008 we may purchase additional Structured Notes as buying opportunities arise throughout the year.
go back to FAQ list How will the state of global economy affect our portfolio?
In 2008, we expect short term interest rates to continue dropping as central banks attempt to spur economic growth. This will immediately benefit our core bond holdings and we expect that it will also benefit our Structured Notes as global economies improve.
go back to FAQ list Insurance
What is Optional Insurance?
Optional Insurance is available to cover your full savings and interest in the event of death or disability of either Subscriber.
go back to FAQ list How does the Optional Insurance work?
If you have Insurance on your Plan, and in the event of death or disability of either Subscriber, the insurance company will continue to make Contributions under your Heritage Plans until your Contribution schedule is completed.
go back to FAQ list What happens if me or my spouse die and there is no Insurance on my Plan?
Without the optional insurance coverage, the remaining Subscriber (in the case of Joint Subscribers) or heirs of the Subscriber would be required to continue Contributions, if applicable, in order for the Plan to remain in good standing.
go back to FAQ list Who qualifies for Insurance coverage?
To qualify for insurance coverage, the Subscriber (or, in the case of joint Subscribers, both Subscribers) must be under 65 years of age, be the parent, grandparent, step-parent or legal guardian of the Beneficiary and not be suffering from any serious illness, injury or disease at the date the Contract is accepted by the Foundation and the insurance premium must be paid.
Group insurance coverage automatically terminates if the Contract is terminated or once the Subscriber (or, in the case of joint Subscribers, one Subscriber) attains 70 years of age (age 65 for disability coverage).
go back to FAQ list What features are included under Optional Insurance?
A summary of the insurance coverage features include:
- In the case of the death of a Subscriber, the coverage provides for all required Contributions to the Heritage Plans to continue being made on behalf of the Subscriber.
- In the case of disability of the Subscriber for a period of nine continuous months, the disability coverage will provide for the continuation of the monthly Contributions and waiver of the insurance premiums during the remaining disability period beginning in the 10th month of disability until a return to work is possible, or Contributions are completed, whichever occurs first.
- If your Spouse is a joint Subscriber, the insurance benefits apply to the first death or disability of either of you.
go back to FAQ list How are Insurance Premiums calculated and applied?
Insurance Premiums are set out in the Contribution Schedule of your Prospectus. If you have Insurance on your Plan, the premium is included in and paid at the time of each Contribution you make.
go back to FAQ list I do not have Insurance on my Plan, but I would like to add it. What do I need to do?
Please contact us at 416.502.2500 locally or toll free at 1.800.731.2101 or email us at
customercare@heritageresp.com and one of our Customer Service representatives will be glad to guide you through the steps of purchasing Insurance.
go back to FAQ list If I cancel my Plan, do I get Insurance Premiums back?
Like most other insurance policies, the premium you pay is not refunded under any circumstance.
go back to FAQ list Fees
What fees or expenses must I pay for these Plans?
For the Heritage Plan RESPs, fees paid by the Subscribers are listed below:
- A $100 per unit Membership Fee deducted from early contributions, of which all or part may be returned with the Educational Assistance Payments (EAPs), depending on the Scholarship Option chosen. Membership Fees are not refundable if your Plan cancels prior to Maturity.
Membership Fee refund is at the discretion of the Foundation. Discretionary payments 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. If the Foundation makes a payment, you may get less than what it paid in the past. You may also get less than what the Foundation pays to Beneficiaries in other groups.
- A Depository Charge between $3.50 - $10.00 + GST. The amount of this fee depends on how you contribute to the RESP and is deducted from Savings.
- A portfolio management fee equal to .05% to .20% per annum of the average market value of assets in the Plans (.055% in 2006).
- An administration fee equal to .50% annually of Principal, Income and CESG, CLB and/or ACES and interest thereon in the Deposit Account and, with respect to Subscribers who have selected the Self-Determined Option, of Principal, Income, CESG, CLB and/or ACES and interest thereon in the Self-Determined Account.
go back to FAQ list Are my Membership Fees returned?
If you continue with the Heritage Plans until the Maturity Date, an amount equal to 25%, 50% or 100% of your Membership Fee (depending on your selection of Educational Assistance Payment pay-out) may, at the discretion of the Foundation, be returned to the Beneficiary at the time of Educational Assistance Payment pay-out. Membership Fee amounts, if returned, are distributed evenly with Educational Assistance Payments. If you decide to withdraw from the Heritage Plans and select the Self-Determined Option within 180 days but before the Maturity Date, you will lose all of your Membership Fees paid to the date of withdrawal.
Discretionary payments 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.
go back to FAQ list When I enrolled, I was told that a Heritage Plan has three unique features: refund of Membership Fees, attrition and enhancements. Is this still true?
Yes, it is. Depending on your pay-out option selection at Maturity, an amount equal to 25%, 50% or 100% of your Membership Fee may be returned to Beneficiaries with the Educational Assistance Payments (EAPs). You will not be eligible for return of Membership Fees if you select the Self-Determined Option. In addition to Membership Fees, each EAP has an added benefit of attrition and a discretionary payment from the Enhancement Fund.
Historically, the Foundation has always maximized EAPs with a refund of the applicable portion of Membership Fees, attrition and payments from the Enhancement Fund. For example in each of the last 5 years, approximately 1/3 of the EAP amount came from the Enhancement Fund. The Foundation’s general policy, established practice and future intentions are to provide for discretionary payments to maximize EAPs and to ensure ongoing long-term sustainability of enhancement payments.
The return of Membership Fees and payments from the Enhancement Fund are at the discretion of the Foundation.
Discretionary payments are not guaranteed. You should not count on receiving a discretionary payment. The Foundation decides if it will make a discretionary payment in each year.
go back to FAQ list