Overview
Voyant now provides enhanced modeling for Registered Education Savings Plans (RESPs), particularly in scenarios where education costs do not fully use the plan balance.
Previously, unused funds remained in the RESP until expiry, triggering a standard collapse, returning contributions, clawing back grants, and taxing growth with penalties.
With this update, you can now model CRA-permitted rollovers of Accumulated Income Payments (AIP) into RRSPs or RDSPs. This allows you to reflect more tax-efficient, real-world planning strategies directly within client plans, while the software ensures compliance with CRA rules.
Account Closure Year (Foundation of the Plan)
Every RESP now includes an Account Closure Year, which acts as the anchor for all end-of-plan activity.
- By default, this is set to purchase year + 36 years (CRA maximum lifespan)
- Contributions cannot be scheduled in or after the closure year
- This creates a clear endpoint for planning conversations
This ensures all RESP activity is aligned to a defined timeline.
Defining the Exit Strategy
As the RESP approaches its closure year, you can define how any remaining funds are handled.
- Select and prioritize RRSP and/or RDSP accounts for rollover
- The system will:
- Roll growth (AIP) into the first account up to available limits
- Continue to the next account if limits are reached
Any remaining growth that cannot be rolled over:
- Is transferred to default cash
- Becomes taxable and subject to penalties
This allows you to clearly demonstrate the value of rollover strategies versus a full RESP collapse.
Qualification & Compliance Rules
Before executing any rollover, Voyant performs annual compliance checks to ensure CRA rules are met.
Key rules include:
- Account Eligibility
- RRSP must belong to the RESP owner or their spouse
- RDSP must align with an RESP beneficiary and be owned by the RESP owner
- “10 and 21” Rule
- RESP must be open for at least 10 years
- Beneficiaries must be age 21+
- No remaining education expenses in the plan
If any condition is not met:
- The rollover account is marked ineligible
- A calculation note explains the issue in Dashboard and Year View
How the Plan Wraps Up
In the Account Closure Year, Voyant automatically distributes the RESP balance into three components:
- Contributions (Cost Basis)
- Returned to default cash tax-free
- Government Grants
- Returned to the government (not eligible for rollover)
- Investment Growth (AIP)
- Rolled into selected RRSPs/RDSPs (if eligible)
Tax Treatment
- Rolled AIP:
- Not included in taxable income
- Avoids the 20% penalty
- Unused growth:
- Taxed and penalized when paid to cash
Key Takeaway
This update allows you to move beyond a one-size-fits-all RESP collapse and instead model tax-efficient exit strategies, helping clients retain more of their investment growth while staying compliant with CRA rules.