Update on the Closure of the Alberta Centennial Education Saving Plan

Information bulletin

Number:

CESP/PCEE-2015/16-002-639

Date:

September 18, 2015

Subject:

Update on the Closure of the Alberta Centennial Education Saving Plan

Previous Bulletin

This notice follows Information Bulletin #619 dated March 26, 2015, (CESP/PCEE-2014/15-002A-619) and Information Bulletin #634, dated August 4, 2015, (PCEE/CESP-2015/16-002A-634) regarding the closure of the ACES Plan.

Purpose

The purpose of this Information Bulletin is to provide additional information to RESP promoters regarding the closure of the ACES Plan.

Background

Promoters and trustees that have a valid agreement with Employment and Social Development Canada (ESDC) to deliver the ACES Plan are required to comply with cut-off dates and other requirements that align with the closure of the ACES Plan. The next cut-off date is September 30, 2015, which is the final date a promoter can process transactions (dated July 31, 2015 or earlier) requesting ACES Plan grants.

Note: Information contained in this document is subject to change based on legislative and/or regulatory amendments. You are encouraged to check the ACES Plan website for updates and information on the closure of the ACES Plan.

Reporting historical ACES Plan transactions after January 1, 2016

Promoters are required to convert ACES Plan grants to accumulated income on or after January 1, 2016. The conversion is required prior to the initiation of a transaction dated on or after January 1, 2016, where ACES Plan grants previously existed.

Information Bulletin #634 indicated that after January 1, 2016, promoters may continue to submit historical ACES Plan grant transactions, including Educational Assistance Payments (EAPs), transfers, repayments and termination adjustments. However, ESDC will not acknowledge the value in the Alberta Grant Amount or the Alberta EAP Grant Amount fields (400-13, 400-19, 400-21, 400-22, and 400-23).

Some promoters have indicated that this approach may not be possible. In these instances, the ACES Plan grant amount must be converted to accumulated income prior to submitting the transaction to ESDC.

Procedure for ACES Plan repayment amounts

Between September 2015 and January 2016, a promoter may not receive a sufficient amount of ACES Plan grant to offset their ACES Plan repayment transactions. In this case, ESDC will defer the ACES Plan repayment amount until the final processing run in January 2016, which will be subtracted from the total Canada Education Savings Grant payment issued. ESDC will then transfer the ACES Plan repayment amount to the Government of Alberta on the promoter’s behalf.

As required under paragraph 4.3 (c) of the Trustee Agreement, all ACES Plan repayment amounts are to be removed from the RESP trust account and placed in a separate non-interest bearing trust account and not deemed to be part of the trustee’s assets. It should not be converted into accumulated income.

Notice of Termination

Further to questions raised by members of the RESP industry as outlined in Information Bulletin #634, it should be noted that a Notice of Termination for the Promoter and Trustee Agreements with ESDC will be issued to all participating financial institutions in the coming months.

Transfer Form

The transfer form will be amended to remove any reference to ACES Plan grants. The new version will be circulated to promoters in a future Information Bulletin.

Contact us

If you have any questions on this Information Bulletin, please contact us by e-mail at cesp-pcee@hrsdc-rhdcc.gc.ca or call 1-888-276-3624. Our hours of operation are from 8 am to 5 pm Eastern Standard Time.