Many parents have been using the RESP Group plans since the Canadian government introduced it. RESP Group plans are controlled by organizations such as the Heritage Education Funds and USC.
The bodies represent the parents who are members of the RESP Group plans. Although the program has done a lot in helping parents save for their children’s’ education, there are some few complaints from parents who have been using it.
Many parents complain that there are a lot of barriers when you want to terminate your contribution to the program. The other concern is the huge reduction in your final amount of contribution.
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While it is possible to transfer your savings to a bank or any other, you will have a certain amount of deduction for your contribution. Some of the charges that you will incur include an enrollment fee and transfer charges. Other issues that have been raised concern include the lack of transparency on the charges involved, dishonest salespeople, and high rates of interest.
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Although there have been some reforms made in an effort to solve these issues, parents are still complaining. There have been increased complaints from parents as reported by a government agency based in Ottawa.
The dealers are responsible for making decisions for parents. They also set a contribution schedule for you.
In case you fail to contribute on time, your account can be suspended or attract extra fees for every contribution you failed to pay. The fees you are supposed to pay include trustee, enrollment and administration fees.
There are a lot of restrictions with RESP Group plans as compared to other saving plans. You can’t decide the amount of money you can withdraw and when to do so.
A relief to most Canadian parents is that mutual fund dealers and banks have come into a collaboration to provide parents with self-directed plans. You can make the decision on the amount of money you can contribute and also the type of investment you want.
The main benefit of a self-directed plan is that you can withdraw your money when you need it. Your child will get a government grant, but the fund will not be used to pay school fees.
After seven years, the fee charged by mutual fund dealers is reduced to zero after decreasing from the initial fee to zero within this period. This is another advantage as you won’t incur any charges after this period.
The government of Canada introduced RESP group plans to help parents to make savings for their children’s education. There has been a good number of parents who use the program and they have benefited from it. But with the high number of parents complaining about the dealers controlling the program, there are high chances that many parents will opt out of the program.