Additional questions and answers: Closure of the Alberta Centennial Education Savings (ACES) Plan

Previous Bulletin

This notice follows Information Bulletin #619, dated March 26, 2015, which includes answers to a range of questions regarding the closure of the ACES Plan (CESP/PCEE-2014/15-002B-619).

Purpose

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

Background

The decision to close the ACES plan, as announced by the Government of Alberta on March 26, 2015, remains in effect. Promoters and trustees that have a valid agreement with Employment and Social Development Canada (ESDC) to deliver the ACES Plan grants are required to comply with cut-off dates and other requirements that align with the closure of the ACES Plan.

The following answers are in response to the questions received from the RESP industry regarding the ACES Plan closure.

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.

Key Dates

Q1. Why is the last eligibility date for the ACES Plan grants March 31, 2015, instead of December 31, 2015?

A1. Following a two-year review of the ACES Plan, and as a result of budget constraints, the Government of Alberta decided to end eligibility in alignment with the province's end of fiscal year, which is March 31, 2015.

Q2. How will the final eligibility date of March 31, 2015, be validated?

A2. Promoters must ensure that the beneficiary meets the eligibility requirements prior to submitting ACES Plan grant requests. Specifically, promoters must ensure that the child's date of birth or eligible age (8, 11 and 14) was on or before March 31, 2015. Applications must be dated July 31, 2015, or earlier, and submitted for processing by October 6, 2015. ESDC reserves the right to investigate suspected violations of these requirements and take appropriate action.

Q3. Prior to the announced closure of the ACES Plan, a subscriber could apply for a grant up to six years after the beneficiary reached the eligible age for the grant. Will the age ranges still be verified?

A3. The four beneficiary age ranges of 0-6, 8-14, 11-17 and 14-20 will be verified on all ACES Plan grant request transactions dated on or before July 31, 2015, providing that the child's date of birth or eligible age (8, 11 and 14) was on or before March 31, 2015.

Q4. After October 6, 2015, can corrections be made to ACES Plan transactions if they had previously gone to error?

A4. No, all ACES Plan transactions that had previously gone to error must be corrected and resubmitted by October 6, 2015.

Systems and reporting - ITS

Q5. What will be the new Transaction Type (TT) or Record Type (RT) for the closing of the ACES Plan grants?

A5. At this time, no new transaction types or record types are anticipated for the closing of the ACES Plan grants.

Systems and reporting - Industry Testing

Q6. Will there be a requirement to complete Industry Testing to discontinue ACES Plan transactions?

A6. At this time, Industry Testing is not anticipated for the closure of the ACES Plan.

Systems and reporting

Q7. Promoters have been asking for clarification regarding the requirements for sending transactions to ESDC for processing as of February 2016.

A7. ListServ Notice #631 stated that promoters are required to convert the ACES Plan grants to accumulated income on or after January 1, 2016. For clarification, it should be noted that the conversion is required prior to the initiation of a transaction dated on or after January 1, 2016 where ACES Plan grants previously existed.
More specifically, ACES Plan grants should no longer be reported to ESDC on Educational Assistance Payments (EAPs), transfer, repayment and termination adjustment transactions dated on or after January 1, 2016. All EAP, transfer, repayment and termination adjustment transactions must be reported to ESDC with a "0" in the "Alberta Grant EAP Amount" field on the 400-13 and a "0" in the "Alberta Grant Amount" field on the 400-19, 400-21, 400-22 and 400-23 transactions.
(a) For the reporting of EAPs, transfer, repayment and termination adjustment transactions that include ACES Plan grant with a transaction date before January 1, 2016:
EAPs, transfer, repayment and termination adjustment transactions with an ACES Plan grant amount dated before January 1, 2016, can be reported to ESDC without any changes. However, ESDC will not acknowledge the value in the "Alberta EAP Grant Amount" field on the 400- 13 or the value in the "Alberta Grant Amount" field on the 400-19, 400-21, 400-22, and 400-23 transactions.
(b) For correcting transactions that previously reported ACES Plan grant to ESDC:
EAPs, transfer, repayment and termination adjustment transactions that were previously processed can still be reversed by submitting a reversal for the respective transaction. However, the "Alberta EAP Grant amount" field on EAP transactions and "Alberta Grant Amount" field on transfer, repayment and termination adjustment transactions being reversed will not be acknowledged by ESDC and will be reported as a "0" amount on the record type 900 transaction in the transaction processing report (.PRO).
If the transaction being corrected is to be submitted to ESDC again, ACES Plan grant should still be reported as ACES Plan grant if the transaction date is before January 1, 2016.

Q8. Will ACES Plan grant requests and reversals be rejected as of February 2016?

A8. Yes, all ACES Plan grant requests (400-25) and reversals will be rejected by ESDC when submitted for processing. Error code 1013 - "Sender is not authorized to submit transactions with Alberta Grant content" - will be used for each rejected transaction and will be reported back to the promoter in a Transaction Error Report (.ERR).

Systems and reporting - EAP transactions

Q9. Which Educational Assistance Payment (EAP) formula should be used if an RESP would no longer be in a loss situation once the ACES Plan grant is converted into accumulated income? (There is no longer a loss in the RESP.)

A9. In this situation, promoters must use the EAP formula specified in the regulations for an RESP with accumulated income.

Systems and reporting - notification

Q10. Is ESDC expecting an electronic notification for each beneficiary when their ACES Plan grant amount(s) has been converted to accumulated income?

A10. At this time, ESDC is not expecting an electronic notification for each beneficiary when their ACES Plan grant amount(s) has been converted to accumulated income.

Systems and reporting - Termination adjustments

Q11. Will termination adjustments that occur on December 31, 2015, that include an ACES Plan grant amount still need to be reported?

A11. All transactions that contain an ACES Plan grant amount that include termination adjustments occurring on or before December 31, 2015, must be reported to the ESDC system by January 7, 2016.

Systems and reporting - Personal information

Q12. According to the Promoter-Trustee Agreements for the delivery of the ACES Plan grants, all personal information must be returned to the Minister of ESDC once the agreement is terminated. How will this be done?

A12. This is currently under review. Further details to follow.

Accumulated income

Q13. Will all the rules for accumulated income apply to ACES Plan grants that have been converted?

A13. Yes. Once the ACES Plan grants have been converted to accumulated income, they will be governed under the Income Tax Act (ITA).

Communications

Q14. Will clients be advised directly that ACES Plan grant amounts in their RESP(s) are being converted to accumulated income?

A14. No. The Government of Alberta will not be communicating with subscribers directly. Clients can be redirected to the ACES Plan website for updates and information on the closure of the ACES Plan or by calling 1-866-515-2237.

Requests for Ministerial Review

Q15. What can we tell clients on the subject of requests for Ministerial Reviews for ACES Plan grant adjudication?

A15. Requests for Ministerial Review must be submitted to the Government of Alberta by September 30, 2015, with full required documentation. However, applications for ACES Plan grants that have previously been reclaimed to allow for a transfer from an ACES Plan promoter to a non-ACES Plan promoter will not be accepted after March 31, 2015, unless the reclaim was in process with the ACES Plan on or before March 31, 2015.

Governance

Q16. Will the closure of the ACES Plan be addressed in the Agreement between the Department of ESDC and Promoters/Trustees for the Delivery of the ACES Plan Grants?

A16. This is currently under review. Further details to follow.

Q17. Due to the change of Alberta’s government, will the closing of the ACES Plan be repealed?

A17. The Government of Alberta has confirmed that the decision to close the ACES Plan remains in effect.

Q18. Since March 31, 2015, promoters have started to decline ACES Plan grant applications. What will happen if Alberta chooses to reinstate the program?

A18. The Government of Alberta has confirmed that the decision to close the ACES Plan remains in effect.

Forms

Q19. Will the transfer form be amended?

A19. The transfer form is currently under review. Further details to follow.

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 a.m. to 5 p.m. Eastern Standard Time.