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A number of you have expressed frustration in not being able to transfer your RDSP from one financial institution to another.  Part of that frustration has been that the messages have been conflicting – you should be able to transfer…you can’t transfer yet…you will be able to transfer soon…we don’t know when you will be able to transfer.

We have checked in with the federal government and financial institutions in an effort to find out what is going on, what the solutions are and how we can move this agenda forward.

First, we can report that all parties are aware of the problem and people’s frustrations.

As a lay person, I had a difficult time understanding what all the difficulty is about.  But in speaking with people, I came to understand that it’s a bit more complicated.  The crux of the matter is determining what information needs to be transferred along with the RDSP.  Financial institutions need to maintain information to be able to calculate holdback amounts, taxes, payments permitted etc.  Not only that, they all need to agree on what they will transfer and maintain so that when they receive a transferred RDSP, they have the appropriate information or if they are sending an RDSP, they will send the right information.  All of this takes time.

While some of you will be frustrated waiting one day longer, it appears that we are still about three to six months from everything being worked out and transfers occurring in a pretty easy manner.  That would be somewhere between January and March (and possibly before).

We have heard of people managing to get funds transferred – but it isn’t an easy process at the moment.   If you absolutely can not wait, then we’d recommend that you take it up the line within the bank – some banks might be willing and able to make it work for you.

One of the most common questions I have been receiving lately is “can I transfer my RDSP from one bank to another?”.  Quick answer, Yes.  The legislation does allow for the RDSP to be transfered from one financial institution to another.

Does this mean I can go down to the bank and transfer right now?  Maybe. Maybe not.

Many people I have chatted with have said that they were told by their financial institution that transfers are currently not possible because there is no Government RDSP Transfer Form.  True, currently there is not a Government RDSP Transfer Form (although it will be ready by the end of February 2010), but the Government is capable of accepting transactions from financial organizations opening or closing RDSPs as a result of a transfer.

What does this mean?

It means that financial institutions can electronically submit information to the Government opening an RDSP and have the option to indicate it is part of a transfer.  Once this application is received, the RDSP would have the status of “pending” until the prior RDSP (from the old financial institution) has been closed, at which time the status would change to “registered”.  Note that the old RDSP must be closed within 120 days for the new one to be deemed “registered”.

Financial institutions can also submit an electronic request to close an RDSP, and can indicate that the closure reason is due to a “transfer”.

So why are most financial institutions saying they cannot transfer yet?

As many of you are probably aware, there have been some delays in completing the electronic system requirements around the RDSP, and many financial institutions started off by registering RDSPs manually.  Some financial institutions may not have the electronic systems currently in place to transfer and are waiting for the RDSP Transfer Forms from the Government to come out early this year (probably end of February 2010).

When the RDSP Transfer Forms come out early this year, this should allow all the financial institutions to transfer RDSPs across to another financial institution.  We will post an update when these forms come online.

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