By Matthew Quetton, CEO, PLAN
Truthfully, I am terrible with money; great at spending it, terrible at saving it. When I met with a financial planner for the first time last year I realized just how much I was behind the game. Failing to buy a house as a young couple, we were now virtually locked out of the market. Without the equity of a small condo behind us, and with two young children requiring the space of at least a small 3-bedroom, we were not able to afford even the smallest space that would be suitable for us. We did have some money saved in an RRSP, thank goodness, which we’d be able to apply to a down payment should things improve. But the fact that Leslie had not returned to work for the 7 years since Theo was born continued to pose a challenge to getting ahead financially. With Theo’s daily needs and array of specialists and appointments to manage, it just hadn’t been feasible for her to return to work. With the children continuing to grow, and our housing needs with them, the prospect of home ownership continued to recede, and our hopes for security with it. Fears for Theo’s future were deeply compounded by our financial uncertainty. We were facing a future decidedly different from the one we previously assumed we’d enjoy.
Caught in the midst of this vicious cycle, we were introduced to the RDSP for the first time. Here, at last, was something to give us hope. It certainly wouldn’t solve all our problems – or Theo’s – but was finally something that seemed to offer the prospect of breaking the downward spiral we’d fallen into. Perhaps something we could rally around, maybe even getting friends and family involved. It felt like there was light at the end of the tunnel.
Signing up was easy. In fact, it made me immensly proud to march down to the bank with our tax returns, proof of Theo’s eligibility, and sign up for the world’s first savings vehicle for people with special needs. It was pretty cool really; we qualified for something special, something not every Canadian could participate in. The hard work we did to manage Theo’s care was being rewarded, the uncertainty of our future was being recognized and supported. I was almost starting to feel like my old self again!
It went even beyond us; opening Theo’s RDSP felt like we were participating in something great. I had been contributing at PLAN for a few months and had become aware of just how large a challenge the RDSP had been for PLAN to advocate for. It went way beyond just convincing the banks to open the accounts. Securing Ottawa’s support for the Grants and Bonds was a challenge with the Finance Department. Even tougher was the challenge with the Provinces to allow for the accumulation of savings inside the RDSP without affecting elligability for disability benefits. Now, for the first time ever, being disabled did not mean being in poverty.
It was the effects of this amazing achievement I was feeling when I boasted later to my father-in-law about opening Theo’s account. As a retired commercial loans officer, he knew I wasn’t kidding when I told him it was the best investment on the planet. Normally you’d have to be Warren Buffet to get the kinds of investment returns the RDSP delivers together with the Grants and Bonds. As well, the recent change allowing my father-in-law to roll the balance of his RRSP directly into Theo’s RDSP is a huge benefit creating a significant tax savings. So we’d done it. We had entered the world of financial respectability, and he proved it by sending some checks to deposit in Theo’s account. It was a subtle but powerful shift: ee were no longer the ‘unfortunate’ destined to grovel for handouts at the pleasure of the state. We were full financial citizens, benefiting from supports from the state to be sure, but able to hold our heads high, under our own steam and with the respect of our parents and peers. We’d always been proud of our ability to make our own way, so participating in the RDSP went a long way to restoring our sense of self.
We did encounter some problems later on, however. I was notified by the bank that in fact they did not have the correct paperwork to secure the government contributions. My return trip to the bank illustrated to me just how complicated the RDSP was to manage, both for the bank and the government. The Financial Planner I met with was even more confused by the paperwork than I was, and had to make several phone calls to finally determine what was required. We got things sorted out but as an entrepreneur, it got me wondering about what the RDSP was like as a product for the bank. I happened to know some folks at Bank of Montreal and at RBC through my work at UBC so I asked them: Was the RDSP good for them? ‘Yes’, and ‘No’, they told me. ‘Yes’ in the long run, since the bank benefits from the funds on deposit. But ‘No’ in the short run. Turns out it actually costs the bank money to open an RDSP. The application is complicated and clients have a lot of questions about the grants, bonds, and withdrawal rules.
Makes sense: All that time I spent with the planner fixing our paperwork, was time she couldn’t spend with another client. Ultimately the bank is thrilled to have additional funds on deposit and knows additional business can come their way; I might open another account along with the RDSP. But I realized how much I needed to support the banks in rolling out this groundbreaking product, that, for the time being at least, was going to cost them money, but create in incredible foundation for the well-being of potentially tens of thousands of disabled Canadians.
Admittedly there are some changes still required to improve the RDSP: in Provinces without the benefit of BC’s Representation Agreement it can be tricky to administer the fund without Guardianship, the withdrawal rules deny older fund holders from the benefits of the Bond and Grant, and there’s other ways it can still be improved. But the more I learn about PLAN and other friends and champions of the RDSP, the more confident I am that their efforts will continue to improve it. Rome, as they say, wasn’t built in a day after all.
So while it might not be perfect – yet – the RDSP is a breakthrough for families of people with special needs. It allows us to participate credibly with our peers, moving us out of a state of legislated poverty. It helps restore our hope and dignity as we manage the daily challenges of raising a child with special needs. And it certainly makes me a little less terrible with money, which is good for Theo.