InfoCapsule: Group plans
Disclaimer: RESP promoters
The information contained on this page is technical in nature and is intended for Registered Education Savings Plan (RESP) and Canada Education Savings Program promoters. For general information, visit the RESP section.
8. Group plans
Group plans, also known as scholarship plans or pooled plans are offered by scholarship plan dealers and consist of a collection of individual Registered Education Savings Plans (RESP). They may have enrolment or scholarship fees and additional conditions to each contract.
- In a group plan the beneficiaries must be of the same age, and are generally born in the same year.
- The contributions, earnings and each education savings incentives are deposited into each separate individual RESP account.
- All subscribers’ contributions are pooled and invested together.
- Contributions are fixed amounts, paid for a stated period of time as per the terms and condition of the contract.
- If a contribution payment schedule cannot be met, other options may be available.
- Contributions are normally invested in lower-risk products.
- The education savings incentives administered by Employment and Social Development Canada (ESDC) and the earnings that these incentives generate can only be used for educational assistance payments (EAP) for the beneficiary of the plan.
- If an EAP cannot be paid, the education savings incentives administered by ESDC must be repaid; or the beneficiary may be transferred out of the cohort.
- there may be specific additional conditions added related to EAP.
- If terminating the contract prior to maturity:
- earnings generated from the contributions remain in the cohort.
- earnings generated by the education savings incentives must be disbursed according to the contract.
- education savings incentives administered by ESDC must be repaid.
- Contributions, minus any fees, are returned to each subscriber at the end of the contract, or before if the contract is terminated.
- Only the earnings generated by the pooled contributions are shared by the cohort whether or not the contract reaches its maturity or is terminated prior to.
- Depending on the selected scholarship plan dealer, other rules may apply. Subscribers should carefully read and understand the conditions of the plan before signing their contract.
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