FAIR Canada seeks relief for group RESP plan subscribers
As wide-ranging business shutdowns cost many Canadians their incomes and jobs, FAIR Canada urged the OSC and CSA to impose a waiver or moratorium on default terms, cancellation terms, and penalties forfeitures arising from missed contributions and account changes for group plan RESP subscribers.
“Group plan RESP promoters and managers are scholarship plan dealer and investment fund manager registrants, variously registered with CSA members,” FAIR Canada noted. “Because [the payout structure of group RESP plans] is based partially on subscriber attrition, attention must be particularly paid to these registrants and their customers during periods of broad financial distress.”
The group is also asking regulators to issue guidance with regard to group plan RESPs, specifically concerning how suitability should be assessed for new sales and subscription activity given the current environment.
“As colleges and universities have closed their campus doors and moved classes online, and as businesses shutter and job losses mount, several of the key criteria for suitability assessments for group plan RESPs, including income, ongoing contribution affordability and education plans, have become more uncertain and higher risk,” FAIR Canada said.