Increase in Assets Under Management highlights continuing consumer
confidence in Group RESPs
TORONTO, June 26, 2013 /CNW/ - From 2007 to 2012, the group scholarship plan industry in Canada grew by 47.49 per cent,
and now manages an impressive $10.59 billion in assets for Canadian
families saving for their children's post-secondary education. This
and other industry data was recently compiled by the Registered
Education Savings Plan Dealers Association of Canada (RESPDAC), which
includes five member companies who represent approximately 90 per cent
of the industry, based on accumulated assets under management.
The $10.59 billion invested in RESPDAC-member plans counts for nearly 30
per cent of the $35.6 billion invested in all registered educations
savings plans in Canada.
"The growth in assets of our members' plans is keeping pace with the
growth in RESPs generally, and that's very gratifying," said Paul
Renaud, Chair of RESPDAC. "Even though the economy has proven to be
challenging and unpredictable these past five years, and economic
recovery has been spotty, there's no question that families continue to
see the huge value of post-secondary education for their children.
"Saving for post-secondary studies, and the benefits that a degree or
diploma can create, has never been more important."
According to Statistics Canada, average undergraduate tuition fees in
Canadian universities were $5,366 in the 2011/12 academic year, not
including residence and other living costs. For a child born in 2012,
it's estimated that a four-year university course, beginning in 2030,
will cost between $85,000 - $136,000 depending on whether the child
lives at home or away. Clearly, without savings built up over time,
more and more Canadian families will find post-secondary education
beyond their financial reach.
Fortunately, Statistics Canada has reported that roughly 70 per cent of
Canadian families are saving for post-secondary education, and over 65
per cent of those families do so through an RESP.
There are two types of RESPs available to Canadians. "Group scholarship
plans", available only through group plan dealers, place planholders'
regularly-scheduled contributions in a pool with other investors'
savings. The investments made with these assets are restricted
primarily to more conservative fixed-income vehicles such as Treasury
Bills, government bonds and GICs, depending on the plan and the
dealer. "Individual plans" which can be obtained from group plan
dealers, and through banks and other financial institutions, enable
investment decisions to be made at the discretion of the planholder.
"While some financial observers have been somewhat critical of the
conservative nature of scholarship plan investment policies, they have
in fact performed exceptionally well during uncertain economic times
such as we've had since 2008," Mr. Renaud said. "As a result, our
planholders have generally been very pleased with the investment
returns we've been able to provide - and ultimately, with the
educational opportunities their children have been able to take
In fact, in 2012 alone, over 83,000 Canadian beneficiaries of group
RESPs received education assistance payments from their plans, totaling
just over $250 million. There are currently nearly 1.5 million group
plans in existence, among the members of RESPDAC. The total amount of
education assistance payments made by all members of RESPDAC, since
their individual companies' establishment as far back as the
early1960s, is $4.185 billion.
The RESP Dealers Association of Canada is comprised of five companies
which specialize in providing group education savings plans: C.S.T.
Consultants Inc., Global RESP Corporation, Universitas Management Inc.,
Heritage Education Funds Inc., and Knowledge First Financial Inc.
Together these companies manage over $10.5 billion of Canadian
families' savings for post-secondary education.
SOURCE: RESP Dealers Association of Canada
For further information:
RESP Dealers Association of Canada