Mississauga, ON (May 31, 2019) – Knowledge First Financial Inc. today announces, following a subscriber vote, the approval from Family Group Education Savings Plan (Group Plan) customers to transfer assets into the Family Single Student Plan (Single Student Plan) for the purposes of winding up the Group Plan.
Knowledge First Foundation, a Canadian not-for-profit corporation, is the sponsor of the Group Plan and other education savings plans. Sales of the Group Plan started in November 1994 and was designed to reward customers who contribute to their agreement continuously from enrolment until the maturity date and students who complete a standard four-year post-secondary undergraduate degree.
The Foundation has relaxed the terms of the Group Plan through prior subscriber votes, making it easier for students to qualify for an Educational Assistance Payment and by including post-secondary education programs beyond the traditional four-year degree program. While these changes have reduced the risks of the Group Plan, they did not fully eliminate these risks.
The benefits of winding up the Group Plan and transferring customer assets to the Single Student Plan include:
- Eliminating the risk and uncertainty for Group Plan customers in withdrawing funds from their RESP including contributions, grants and contribution income and grant income.
- Providing full flexibility in the amount and timing of how customers withdraw their contributions, grants and income, allowing the customer to maximize the benefit from their RESP.
- Allowing customers to continue to earn and accumulated income on their RESP balances for the remaining life of their agreement (up to 35 years from the year the customer enrolled).
- Providing customers with the ability to request any or all remaining income in their RESP that not withdrawn by their student, as an Accumulated Income Payment, subject to Income Tax Rules.
“We know from experience that today’s students need flexibility to maximize the benefits of their RESP,” said George Hopkinson, President and CEO, Knowledge First Financial. “With the Single Student Plan, withdrawals can be made according their needs, in any amount and at any time.”
Knowledge First Financial has a proven track record of evolving to meet changing consumer expectations. In 2012, the company introduced the Flex First Plan, an individual RESP that offers the greatest flexibility in contributions and withdrawals plus unique bonuses. Flex First has since become the product of choice for new customers.
Effective January 1, 2020, each Group Plan customer will see their net contributions, grants, grant income, contribution income, and a proportionate share of the remaining attrition income in their cohort group, transferred to a new Single Student Plan agreement.
To carry out the proposed plan changes, a vote ‘FOR’ by a majority of the votes cast by Group Plan customers was required. Votes were cast at the Special Meeting held at offices of Knowledge First Financial on May 30, 2019, with 61% votes cast in favour of the proposed changes.
About Knowledge First Financial
Canadian families have relied on education savings plans offered by Knowledge First Financial for more than 50 years. Since 1965, payments from our Plans have reached $7.5 billion. Over the last 15 years, Knowledge First Foundation has further enhanced Education Assistance Payments to students by over $53 million. As at April 30, 2019, the company manages $6.4 billion in assets for more than 500,000 RESPs.
Knowledge First Financial Inc. is a wholly-owned subsidiary of Knowledge First Foundation and is the investment fund manager, administrator and distributor of Registered Education Savings Plans. Knowledge First Foundation is a not-for-profit Canadian corporation. The Foundation reinvests excess revenues in initiatives that support student success.
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