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TORONTO, ONTARIO–(Marketwired – Dec. 2, 2016) – On the eve of the United Nations International Day of Persons with Disabilities, BMO Financial Group is reminding Canadians with disabilities and their families of the important role the Registered Disability Savings Plan (RDSP) can play in helping provide financial security.

Since 1992, the International Day of Persons with Disabilities has been celebrated annually on December 3. According to the United Nations, one billion people, or approximately 15 per cent of the world’s population, live with some form of disability.

In Canada, those living with a disability can benefit from access to the RDSP, which is a savings vehicle that helps families manage the financial costs associated with having, or caring for someone with, a severe and prolonged disability. It is available to Canadians who are eligible for the Disability Tax Credit, and can provide peace of mind to parents and other contributors who put a plan in place for a beneficiary with a disability.

“An RDSP can play a critical role in helping reduce the financial strain on individuals and families, given the significant savings a beneficiary can accumulate through the Canada Disability Savings Grant (CDSG) and the Canada Disability Savings Bond (CDSB), as well as the impact of tax-deferred investment growth,” said Trevor Philp, Senior Manager, Registered Products and Managed Solutions, BMO Global Asset Management. “In 2008, BMO became the first Canadian bank to offer this innovative product, and today we are proud to be market leaders for this important segment.”

BMO is also a strong supporter of its employees who have a disability, as part of its wider commitment to diversity and inclusion. “BMO has a long history as a champion of diversity and inclusion – it’s a core value and a key priority for us,” said Sonya Kunkel, Chief Inclusion Officer, BMO Financial Group. “We are committed to fostering inclusive workplaces where all employees feel valued respected and heard, as we know that our employees and customers benefit from the more innovative solutions that a diverse workforce inspires.”

About the RDSP

The RDSP encourages families and individuals to save for the long-term financial security of persons with severe and prolonged disabilities. It is available to Canadians who are eligible for the Disability Tax Credit, and can provide “peace of mind” to parents and other contributors who may put a plan in place for a beneficiary with a disability.

  • Contributions are not tax deductible but grow on a tax-deferred basis
  • Earnings generated on contributions are tax-exempt while in the plan
  • When earnings are withdrawn as part of a disability assistance payment, they are taxable in the hands of the beneficiary and likely to be taxed at a lower rate
  • Only one beneficiary can be named per RDSP. A beneficiary can hold only one RDSP
What is it? A tax-deferred savings vehicle that provides long-term financial security for persons living with a disability.

Includes government incentives such as the Canada Disability Savings Grant (CDSG) and Canada Disability Savings Bond (CDSB) that could add up to an additional $90,000 per individual.

Who is eligible? Canadian residents must open an RDSP in the year before they turn 60, (or by Dec. 31 in the year in which they turn 59), have a valid SIN, and be eligible for the Disability Tax Credit.
Who can set up an account? An account can be set up by the beneficiary, parents of a minor (ages vary depending on province of residence) beneficiary or any individual or organization legally authorized to act on behalf of the beneficiary.
Who can contribute? Anyone can contribute to an RDSP, provided they have written consent of the account holder.
What is the contribution limit? Up to $200,000 lifetime per individual over the life of the RDSP.

There is no annual contribution limit.

Contribution deadlines? Annual contribution deadline for Grants and Bonds: December 31.

Last day for Grants and Bond eligibility: December 31 of the year the beneficiary turns 49 years of age.

Last day contributions permitted to the plan: December 31 the year the beneficiary turns 59 years of age.

About BMO Financial Group

Established in 1817, BMO Financial Group is a highly diversified financial services provider based in North America. With total assets of $692 billion as of July 31, 2016, and over 45,000 employees, BMO provides a broad range of retail banking, wealth management and investment banking products and services to more than 12 million customers and conducts business through three operating groups: Personal and Commercial Banking, Wealth Management and BMO Capital Markets.