Flex First Plan (RESP)

Knowledge First Financial Flex First

The Flex First Plan is an individual Registered Education Savings Plan (RESP) distributed and administered by Knowledge First Financial Inc. Introduced in 2011, the plan has since become the product of choice for Knowledge First customers.

The Flex First Plan is an individual Registered Education Savings Plan (RESP) distributed and administered by Knowledge First Financial Inc. Introduced in 2011, the plan has since become the product of choice for Knowledge First customers.

RESP Basics

An RESP is a type of savings plan introduced in 1974 by the Canadian government to encourage saving for post-secondary education by allowing interest earned on all RESP contributions to accumulate tax-free. Then, in 1998, the Canada Education Savings Grant (CESG) was offered, matching 20% on RESP contributions up to a maximum of $500 per year, per child. Today, more than half of eligible Canadian families are taking advantage of these and the many other benefits of an RESP.

There are three types of RESPs available: individual; family; and group. Each offers these same features and benefits:

  • Tax deferred investment growth;
  • Access to government education grants worth $7,200 or more depending on family income and location;
  • Lifetime contribution limit of $50,000 per child;
  • Ability to use funds to pay for education related expenses such as program fees, tuition, books, housing and transportation;
  • Access to contributions at any time; and
  • Grants and investment earnings are paid to the beneficiary in the form of Education Assistance Payments and are included in the recipient’s income. On a student’s income, there will be little or no tax to pay.

An individual RESP is a great choice due to some of its unique features.  For example, the beneficiary of an individual RESP does not need to be related to the subscriber (the person who opens the RESP) by blood or adoption. This means the beneficiary of an individual RESP can be you, your child or any other person.

Although the Canada Education Savings Grant is only available until the end of the year the beneficiary turns 17, the child on an individual RESP can be any age. Since an RESP can remain open for 35 years and accumulate investment earnings on contributions of to $50,000 tax-free, those who have postponed or delayed their education after high school can still benefit from a registered plan.

Employment and Social Development Canada (ESDC) is responsible for the administration of education savings incentives which are only accessed through an RESP. Individual RESPs are available through most RESP promoters which includes financial institutions, investment dealers, and scholarship plan dealers.

Flex First Plan | Details

As the name suggests, the Flex First Plan from Knowledge First Financial offers several flexible features that make it an attractive and affordable RESP option for many investors. The Flex First Plan is well suited to those who are looking for:

  • A flexible contribution schedule that enables changes to the amount and frequency of contributions;
  • The ability to choose the amount and timing of Education Assistance Payments (EAP) to the student; and
  • Additional features and benefits including a loyalty bonus and potential to receive additional payments from Knowledge First Foundation.

The first step to opening a Flex First Plan is establishing a savings goal, referred to as a ‘total contribution goal.’ This goal represents the total dollar amount of contributions you plan to make during the life of the plan. Knowledge First Financial sales representatives help customers set a total contribution goal that strikes the right balance between what the customer ideally wants to save for their child’s education and what is affordable. The total contribution goal can be increased or decreased as your financial situation changes. For example, many customers start saving small amounts then increase their goal as their career and financial situation progresses.

Once the TCG is establish, you will determine how much and how often you would make contributions. These contributions can bi-weekly, semi-monthly, monthly or annually.  This schedule can be changed at any time according to your needs.

With the Flex First Plan, increasing the amount and timing of your contributions can help you reach your total contribution goal faster.  Even small increases in your contributions can make a big difference in the savings available for your child ten or more years in the future. Lump-sum or ad hoc contributions can also be made at any time, making it easy to turn additional money, such a work bonuses or gift money, into funding for your child’s education. Like all saving strategies, saving often pays off in the end.

The Flex First Plan offers additional features and benefits including:

  • A loyalty bonus program that accumulates additional funds which can be paid to the customer or the student beneficiary, when he or she is enrolling in a post-secondary program.
  • Once enrolled in a post-secondary program, student beneficiaries may receive a discretionary payment supplement in addition to their EAPs. Knowledge First Financial is a wholly-owned subsidiary of Knowledge First Foundation, As a not-for-profit corporation with no shareholders, the Foundation is able to shares available excess revenues with beneficiaries. The amount of money available varies from year to year and is not guaranteed, however the Foundation is committed to re-investing in initiatives to support student success.

Make the decision to save

Saving early and saving often is the best way to prepare for the high cost of post-secondary education. By starting early, not only will you enjoy the benefit of compound growth, but you will have more time to collect available government grants. Whether your child attends part-time or full-time studies at a trade school, college or university, an RESP can help them  get there. Speak to a knowledgeable RESP specialist to ensure you choose a plan that fits into your family budget today and will meet your needs tomorrow.

About Knowledge First Financial Inc.

Canadian families have relied on education savings plans offered by Knowledge First Financial for over 50 years. Today, the company manages $3.72 billion in assets on behalf of more than 250,000 customers. Since 1965, payments from the plans have reached $3.9 billion and the Knowledge First Foundation has further enhanced Education Assistance Payments to students by nearly $50 million.

Knowledge First Financial Inc. is a wholly-owned subsidiary of the 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 with no share capital. The Foundation is therefore able to reinvest excess revenues in initiatives that support student success.

For more information about education savings plans from Knowledge First Financial Inc., please visit knowledgefirstfinancial.ca or refer to our prospectus.

Knowledge First Financial® is a registered trademark of Knowledge First Financial Inc.