Nicholas Kyriacopoulos: RESP Program in Canada – Basics You Need to Know

Nicholas Kyriacopoulos: RESP Program in Canada – Basics You Need to Know

If you’re the caregiver of a child and have a forward thinking attitude toward higher education, the Registered Education Savings Plans Program is something you should learn about and consider. Advocates for education like Nicholas Kyriacopoulos endorse this program and urge interested parties to find out what it can do. Here are some of the basics that you should know about the Program in general, including how the plans work.

Understanding the Basics of the RESP Program

The RESP Program is a program that promotes the establishment of plans to aid in paying the costs of higher education. As with many types of financial plans, the idea is to contribute funds that are in turn invested on behalf of the plan subscribers. Over time, the balances increase and provide the funding needed to cover tuition and other costs directly associated with seeking degrees and other types of educational credentials.

Participation in the RESP does require proper approval before a plan can be offered to subscribers. The qualifications include the preparation of paperwork that must be submitted to  and properly registered with the Canada Revenue Agency. It must also meet the requirements found in current laws related to this type of funding. As with any type of financial endeavour, financial experts like Nicholas Kyriacopoulos recommend becoming familiar with all of the legal requirements before attempting to launch a plan.

The Ultimate Goal of the RESP Plan

The ultimate goal of any RESP plan is one that people like Nicholas Kyriacopoulos can support without reservation: higher education without the burden of excessive debt. Society benefits from those who can secure degrees and begin to contribute to the community at once, rather than a significant amount of their earnings going to retire educational debt.

People like Nicholas Kyriacopoulos also recognize a valuable asset that higher education provides for people: the ability to engage in critical thinking. That asset paves the way for a more informed population that is capable of separating fact from fiction, assessing the best way to use skills and talents, and in general create healthier communities.

The Types of Plans Offered

As with any solid savings plan, the Program provides room for more than one type of plan. As Nicholas Kyriacopoulos would point out, the diversity in the plans makes it easier for people from different walks of life to participate.

Non-family plans are geared toward providing funding for a single beneficiary. Essentially, anyone can set up this type of plan and name an individual as the recipient of the funding. The subscriber retains the right of determining how much to contribute and how often.

Family plans allow for more than one beneficiary to receive financial support. One of the caveats of this plan is that all the parties must be related in some manner. That relation may be through birth or it could be through adoption. Connections through marriage also fit into the family plan, allowing a stepchild to be the recipient even if no formal adoption by the step-parent ever occurred.

Group plans are also possible under the terms of the RESP. Functioning much like a foundation, this solution allows funding for multiple beneficiaries and usually requires contributions to be made until each beneficiary has reached the age of 18.

As Nicholas Kyriacopoulos notes, the pros and cons of each plan are best decided by taking a good look at the promoter’s situation and ultimate goals for the beneficiaries. There are counsellors who can aid in evaluating each approach and recommending the one that seems to be the best choice for a particular situation.

The Role of a Promoter

Promoters are those who create the plans, ensure they are in full compliance with current governmental laws and regulations, and then offer them to potential subscribers. The task of creating such a plan is nothing to take lightly. There’s the need to supply a great deal of documentation that must be evaluated carefully. One point to keep in mind is that a promoter cannot offer a plan to any subscriber until all involved agencies, including the Canada Revenue Agency, have reviewed and approved the plan.

As an advocate of ongoing education, Nicholas Kyriacopoulos supports the mechanisms in place to ensure these plans are properly managed and distributions are in full compliance with the plan’s policies and procedures.

Investment Types That are Commonly Used for an RESP

Several types of investments may be used to fund any RESP plan. They include direct deposits of cash, investment certificates issued by a trust, bonds issued by a local municipal, provincial, or federal source, and bonds or stocks issued by a properly licensed corporation.

There are more ways to contribute to the RESP. Information about each one is available through the the CRA and other government entities.

Understanding Who Can and Can’t Be a Subscriber

The range of potential subscribers is broad. Parents and legal guardians of a minor child may enter his or her name as the subscriber. Godparents and friends of the family may do likewise. Employers may also subscribe employees as beneficiaries, although it must be made clear that the arrangement is between the employee and the promoter, with the employer acting as an agent and possibly providing contributions through payroll deductions. This arrangement allows the employee to enjoy the best possible tax exemptions on those contributions.

While the range is broad, it pays to double check before assuming anything. This is another area where Nicholas Kyriacopoulos would urge interested parties to seek advice from financial experts.

If you’re interested in subscribing to a plan on behalf of a child or other party, do take the time to compare plans. Make sure they have full governmental authority to operate and be aware of how the plan chosen could impact the ability to claim tax breaks. As with anything, Nicholas Kyriacopoulos advises people to investigate every aspect and only proceed after being sure the plan in question is the best possible solution.