Education Funds International EDUCATION SAVINGS PLAN GUIDE PROVIDING a brighter FUTURE FOR CHILDREN TODAY
2 ABOUT HERITAGE ESP GUIDE ABOUT HERITAGE Heritage, the Education Savings Plan provider of choice Heritage Education Funds International, LLC is a Canadianbased company and is one of the leading distributors of Education Savings Plans (ESPs) with over 30 years of experience. Our network of Sales Representatives has been helping families save for their children s/grandchildren s post-secondary/tertiary education since 1983. OVER 30 YEARS EXPERIENCE OVER US$111.8 MILLION IN ASSETS UNDER MANAGEMENT Heritage International Scholarship Trust Foundation is a notfor-profit corporation governed by its board of directors. The Foundation has over US$111.8 million in assets under management as at December 31, 2015. As of December 31, 2015, the Foundation has paid out over US$138.4 million in savings and Educational Assistance Payments (ESPs) / Scholarships to subscribers and beneficiaries. Our subscribers include parents, grandparents, aunts, uncles, and other family members and family friends throughout the Caribbean, with enrollment of over 55,000 children into the Heritage International Scholarship Trust Plan. OVER US$138.4 MILLION IN PAYOUTS 1 OVER 55,000 BENEFICIARIES ENROLLED LOWER-RISK INVESTMENTS 1. These payouts consist of subscribers contributions (less applicable fees). Educational Assistance Payments/Scholarships (EAPs) consist of the beneficiary s share of pooled income or selfdetermined income, and top ups of the EAPs. A top up of the EAP is a discretionary payment. Discretionary payments are not guaranteed. You should not count on receiving a discretionary payment. The Foundation decides if it will make a payment in any year and how much the payment will be.
ESP GUIDE OUR KEY PARTNERS 3 HERITAGE INTERNATIONAL SCHOLARSHIP TRUST FOUNDATION Heritage Education Funds International, LLC. Heritage Education Funds International (Jamaica) Limited Heritage International (Bahamas) Limited Heritage Agency (Bermuda) Limited Mutual Insurance (BVI) Agency Limited Heritage Education Funds International (Asia) Limited Registered Representatives EDUCATION SAVINGS PLAN Heritage International Scholarship Trust Plan Heritage Education Funds International, LLC is currently working on adding other countries to the distribution list. FOUNDATION AND REGISTRAR Heritage International Scholarship Trust Foundation TRUSTEE AND CUSTODIAN Butterfield Trust (Bermuda) Limited DEPOSITORY Bank of N.T., Butterfield & Son Limited (Bermuda) AUDITOR KPMG LLP (Chartered Accountants) PORTFOLIO ADVISORS Scotia Asset Management L.P. (Member of Bank of Nova Scotia) (Canada) Fiera Capital Corporation LEGAL COUNSEL McMillan LLP (Canada) Appleby (Bermuda) Myers, Fletcher & Gordon (Jamaica) Higgs & Johnson (Bahamas) Deacons (Hong Kong) HARNEYS (British Virgin Islands)
4 THE COST ESP GUIDE HOW MUCH WILL IT COST? It is estimated that the full cost of a 4-year post-secondary/tertiary education for international students could cost... Year of Birth Year of School Entrance Canada 1 Caribbean Region 2 United Kingdom 3 U.S.A 4 2018 2036 $167,232 $97,492 2017 2035 $159,269 $92,849 2016 2034 $151,685 $88,428 2015 2033 $144,461 $84,217 2014 2032 $137,582 $80,207 2013 2031 $131,031 $76,387 2012 2030 $124,791 $72,750 2011 2029 $118,849 $69,285 2010 2028 $113,189 $65,986 2009 2027 $107,799 $62,844 2008 2026 $102,666 $59,851 2007 2025 $97,777 $57,001 2006 2024 $93,121 $54,287 2005 2023 $88,687 $51,702 2004 2022 $84,464 $49,240 2003 2021 $80,442 $46,895 $248,064 $388,515 $236,251 $370,014 $225,001 $352,394 $214,287 $335,613 $204,083 $319,632 $194,365 $304,411 $185,109 $289,916 $176,294 $276,110 $167,900 $262,962 $159,904 $250,440 $152,290 $238,514 $145,038 $227,156 $138,131 $216,339 $131,554 $206,038 $125,289 $196,226 $119,323 $186,882 All currencies are converted to U.S. dollars. Conversion rates as reported on June 1, 2016 at www.bloomberg.com: $1 CAD = USD$0.7645 $1 GBP = USD$1.4413 $1 JMD = USD$0.0080 The costs are for international students (except Caribbean Region) and are averaged based on the university and the program of study selected. British Overseas Territory students are exempt from International student rates under certain conditions. 1 Canada - www.university.ca 2 Caribbean Region - www.utechjamaica.edu.jm www.mona.uwi.edu 3 United Kingdom - www.topuniversities.com www.internationalstudent.com/study_uk 4 United States - www.collegeboard.org Amounts can and will vary based on currency exchange rate fluctuations and the type of program selected.
ESP GUIDE THE SOLUTION 5 HOW YOU WILL PAY FOR IT? To fund a child s post-secondary/tertiary education, families may have to: Start saving in an ESP Mortgage their home Borrow the money YOU ALREADY KNOW WHAT YOUR OPTIONS ARE Pay-as-you-go Withdraw funds from their personal savings, retirement funds or investments Let their child earn the money or depend on student loans LOANS MAY BE AVAILABLE, BUT WILL YOU QUALIFY? By contributing to a Heritage ESP you may significantly lessen the financial burden of post-secondary education funding. Knowing what your best options are and being prepared are the key elements of successful financial planning. US $48,370 Interest 1 US $13,523 Interest 1 US $26,000 Loan A loan of US$26,000 could result in repayment of approximately US$39,523 1. US $93,000 Loan A loan of US$92,860 could result in repayment of approximately US$141,370 1. US$83 /m US$286 /m ESP contribution of US$83/month for a new born child for 18 years covers approx. US$26,000 2 ESP contribution of US$286/month for a new born child for 18 years covers approx. US$93,000 2 The amount of monthly contribution in a Heritage ESP for a newborn child for 18 years could result in savings and educational assistance payments (EAPs) 2 as illustrated above. 1 Depending on your region, interest rates may vary from 7% to 11.75% per annum. The loan repayments are calculated over a 10-year period at an average rate of 9% per annum 2 Educational Assistance Payment is calculated based on payments to students who received all three EAPs (2013-2015). Past performance is not indicative of future returns.
6 ESP GUIDE THE SOLUTION START EARLY. SAVE OFTEN. STAY INVESTED. 1 $80,000 $70,000 THE EARLIER your child is enrolled in an ESP, THE LONGER your savings have time to grow. $60,000 $50,000 $40,000 ESP contributions Income earned on ESP contributions $30,000 $20,000 $10,000 $0 Newborn 2 4 6 8 10 AGE AT WHICH CONTRIBUTIONS BEGIN Start saving today and benefit from the POWER OF COMPOUND GROWTH. 1 This illustration is based on annual contributions of $2,500 and excludes fees. The income that would be earned is assumed to be 5.20% gross per annum, compounded monthly, over 18 years. This assumption is based on the 15 year return of the Merrill Lynch Corporate Government Bond Index as at December 31, 2015, which is an index comparable to the investments made by the Heritage Plan. Individual circumstances and actual results may vary.
THE SOLUTION ESP GUIDE 7 HELPING FAMILIES SAVE & INVEST FOR THEIR CHILDREN S FUTURE POST-SECONDARY/TERTIARY EDUCATION There is a difference in education savings plans. Parents who know the facts choose the Heritage International Scholarship Trust Plan. Some reasons why the Heritage International Scholarship Trust Plan is the SOLUTION Sponsored by the NOT-FOR-PROFIT Heritage International Scholarship Trust Foundation. Lower risk investments: Your contributions are placed primarily in U.S. dollar GOVERNMENT ISSUED, GUARANTEED AND FIXED-INCOME INVESTMENTS. Income earned on contributions may be invested in equities to maximize returns. We offer a SELF-DETERMINED OPTION which allows you to receive all of your OWN INTEREST even if your child does not attend a post-secondary institution. 1 You may TRANSFER your plan to another beneficiary of your choice (up to age 22). IT S YOUR RIGHT TO DO SO. 1 We provide a plan that includes a SELF-COMPLETION FEATURE 1 for death and disability of a subscriber, at no extra cost. Educational Assistance Payments Scholarships are awarded for attendance at all recognized or accredited post-secondary educational institutions ANYWHERE IN THE WORLD. All that is required is proof of full-time or part-time registration. Flexible long-term savings plan tailored to your individual financial situation. 1 Some conditions apply. See prospectus for full details.
8 THE HERITAGE PLAN ESP GUIDE HOW DOES THE HERITAGE PLAN WORK? SCHOLARSHIP OPTION (Pooled ESP) PAYMENT OF THREE EAPs/SCHOLARSHIPS IN THE 2 ND, 3 RD, 4 TH YEAR OF POST- SECONDARY/TERTIARY STUDIES. Pay-out option selection 180 days prior to maturity Allows up to 4 one-year programs of study in different educational institutions including full-time or part-time distance education or correspondence courses. Years MATURITY 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 Acceptance of enrollment Contribution period SELF-DETERMINED OPTION 1 (Individual ESP) LESS THAN A 2-YEAR PROGRAM There is a $110 per unit ONE TIME Membership Fee deducted from early contributions, which is not returned. An annual Depository Fee is deducted each year based on the number of units purchased and the contributions mode selected, to a maximum of $50.00 per year, per plan. 1 Recommended if beneficiary is not pursuing post-secondary studies or if he/she is pursuing a program of less than two years.
ESP GUIDE THE HERITAGE PLAN ESP 9 PAY-OUT OPTIONS SCHOLARSHIP OPTION Used to fund 2nd, 3rd and 4th years of post-secondary education. Paid to the student. ALL SUBSCRIBERS SAVINGS 1 ST SCHOLARSHIP 2 Scholarship Cheque to Student 2 ND SCHOLARSHIP 2 Scholarship Cheque to Student 3 RD SCHOLARSHIP 2 Scholarship Cheque to Student YOUR CONTRIBUTIONS (LESS FEES AND INSURANCE PREMIUMS, IF APPLICABLE) ARE RETURNED TO YOU AT THE MATURITY OF YOUR PLAN. You select the pay-out option that meets your requirements. to help fund the 2nd year of full-time or part-time studies to help fund the 3rd year of full-time or part-time studies to help fund the 4th year of full-time or part-time studies Payable to the Subscriber(s) and may be used to fund 1 st year of post-secondary education. SELF-DETERMINED OPTION 1 Your contributions (less fees and insurance premiums, if applicable) and all of your interest earned on your Plan only. UNDER THE SCHOLARSHIP OPTION: Your contributions (less fees) are returned at maturity, usually in the year the beneficiary turns 18 years old. Each EAP/Scholarship consists of an income earned on contributions (less fees), attrition 3 and enhancement 4. 1 Recommended if beneficiary is not pursuing post-secondary studies or if he/she is pursuing a program of less than two years. 2 Certain conditions apply. See prospectus for full details. 3 Attrition is the term that applies to the share of pooled income that remains in an ESP after beneficiaries in the same group as your beneficiary do not qualify for EAPs. See prospectus for full details. 4 Enhancements are discretionary payments. Discretionary payments are not guaranteed. You should not count on receiving a discretionary payment. The Foundation decides if it will make a payment in any given year and how much that payment will be.
10 ESP GUIDE HERITAGE PORTFOLIO HOW IS MY MONEY INVESTED? Subscribers contributions are pooled and conservatively invested in various lower-risk investments that earn a stable and a competitive return, including: US-Federal Bonds US-Corporate Bonds Canadian-Corporate Bonds The income earned in the Plan may be invested in a diversified portfolio of Canadian and US equities and corporate bonds with the investment strategy of increasing returns through diversification of products and market exposure. Heritage International Scholarship Trust Plan, Asset Weightings for the period ending December 31, 2015 1 25.2% 1.8% Sector Allocations US-Federal Bonds US-Corporate Bonds Equities Canadian-Corporate Bonds 25.6% 47.4% The Value of Long-Term Savings Beneficiaries of the Heritage Plan received: 7.0% which is the effective rate of return over the total life of the plan 2. 1 Source: Heritage International Scholarship Trust Foundation, as at December 31, 2015. 2 The effective rate of return is calculated as the sum of EAPs for beneficiaries whose plans matured in 2012, and who received all three EAPs (2013-2015). Past performance is not indicative of future results.
OUR ADVANTAGES ESP GUIDE 11 THE HERITAGE INTERNATIONAL SCHOLARSHIP TRUST PLAN ADVANTAGES No other education savings plan, life insurance product, bank, mutual fund or financial planning program can offer all of these advantages: OUTSTANDING PERFORMANCE We have, over the past decade, consistently maintained a competitive rate of return on investments. Three years of Scholarships paid to Qualified Students (2013-2015) received a 7.0% average total return on their investment. WORLDWIDE CHOICE The child may receive Educational Assistance Payments to attend a recognized post-secondary/tertiary institution anywhere in the world. SELF-COMPLETION FEATURE 1 In the event of your premature death or disability, the Self-Completion Feature ensures the return of your Contributions (less fees and insurance premiums, if applicable) based on the amount accumulated in the Plan at the time of your death or disability. It also ensures your child s three years of Educational Assistance Payments are fully paid. CONVERSION PRIVILEGE 1 If you contribute monthly or annually, you may have a fully paid up Plan by exercising your conversion privilege. SUBSTITUTION OF A CHILD (BENEFICIARY) 1 You may transfer your Plan to any other beneficiary. If the present beneficiary and the new beneficiary are both under age 14, then an older child may be substituted. Substitution may occur after maturity if both beneficiaries are under the age of 22 and the new beneficiary is not older than the original beneficiary and no Educational Assistance Payments have been released. FLEXIBLE MATURITY OPTIONS This Scholarship Option 1 is recommended if your child plans to attend a post-secondary/tertiary educational institution (minimum 2 years). SELF-DETERMINED OPTION 1 Must be selected no later than 60 days prior to Maturity. If your child chooses a shorter program or decides not to attend at all, you may choose the Self-Determined Option. If selected, you may withdraw your savings and interest earned, less fees, at any time after Maturity. ENROLLMENT AT A RECOGNIZED INSTITUTION (Proof Required) Educational Assistance Payments are not awarded on the basis of exceptional grades. Students only need to be enrolled full-time or part-time at any recognized post-secondary/tertiary institution. All students will have the opportunity to pursue their own interests based on their own abilities and choices. 1 Certain conditions apply. See prospectus for full details.
12 KEEP IN TOUCH ESP GUIDE IMPORTANCE OF TWO WAY COMMUNICATION Investment in an Education Savings Plan is considered a long term commitment and, as in any relationship, it is important to communicate and keep each other informed. Heritage provides you with various documents (regular mail or electronically) to keep you well informed about your plan: A WELCOME PACKAGE: includes a trade confirmation and is issued upon enrollment. The Heritage International Scholarship Trust Foundation ANNUAL REPORT: delivered annually and is made available anytime through online access. Your STATEMENT OF ACCOUNT 1 : provided annually by the end of the 1st quarter, which covers the following key areas: Annual and lifetime activity of the plan Plan review and illustration of benefits Delivery options of plan documentation GO BEYOND RECYCLING TO KEEP OUR PLANET GREEN. If you re looking for more ways to conserve the environment and save yourself time and money, receiving and viewing your documentation online can really make a difference. You can always access your Statement of Account and all publications at HeritageESP.com. TAKE ACTION AND STAY INFORMED ABOUT YOUR INVESTMENT! Keep Heritage up to date should your personal and/or financial information change. Stay informed and ask questions about your plan. Stay on top of your investments by reviewing all reports, statements and materials we send to you. 1 May be viewed online any time at your convenience.
ESP GUIDE WHAT OUR CLIENTS SAY 13 OUR BENEFICIARIES AND SUBSCRIBERS told us how much having a Heritage ESP impacted their lives: My parents have been the greatest supporters of my dreams, even when these same dreams seemed out of reach financially. I have always worked hard, but I also needed the financial support provided by my Heritage scholarships to realize my college dreams. Without my supportive parents and without Heritage, I would never have been able to pursue an undergraduate degree in Environmental Engineering at my dream college, Princeton University. Thank you, Mom, Dad and Heritage for this amazing opportunity! MARISSA WEBBER, Beneficiary We have always thought that a legacy enriched with a solid educational background would be the most enduring and lasting gift that any parent could give a child. The Heritage Plan must be the most ingenious, creative and rewarding form of investment any parent could make on behalf of their children. Not only does the Plan return to parents their invested sum, but also Scholarships when it matters most. We have one regret and that this is not starting the Plan earlier. We therefore say to parents, please do not let your regret be similar to ours. Saving in the Heritage Plan should begin at the birth of your child. LEON AND AUDREY FORTE, Subscribers
14 KEEP IN TOUCH ESP GUIDE OUR BENEFICIARIES AND SUBSCRIBERS told us how much having a Heritage ESP impacted their lives: When I was introduced to the Heritage International Scholarship Trust Plan, I immediately enrolled my three children. Having persevered through the years, steering the course in saving for my children s postsecondary education, it has brought me a great deal of satisfaction in knowing that two of my children are attending university as a result of this exceptional Savings Plan. I do not have to worry about tuition for my third when that time comes. I do, wholeheartedly, recommend the Heritage Plan to all parents, grandparents, aunts and uncles and anyone who wishes to provide a sound financial base for a child s postsecondary education, anywhere in the world. Enroll your child immediately, if not sooner; you will not regret it! DR. ROBERT ROBINSON, Subscriber I have invested into the Heritage Plan for my children over the years. Because of illness and life s eventualities, I have had to stop my contributions. As soon as there was job security again, I resumed my savings into the Plan. The flexibility of the Plan allowed me options to make up the contributions for lost time. I received the maturity refunds when my children graduated high school and the scholarships started kicking in the year after. I was very happy that I could play my part in allowing them to realize their dreams of attending university. The Heritage Plan delivered when everything else failed. MICHELLE A. NEITA, Subscriber Education Savings Plans have worked and continue to work for me. My children benefitted and now I have all of my grandchildren enrolled in Heritage International Savings Plans. Heritage International provides me with peace of mind knowing that my funds are in a secure savings with a good return on investment for education. DAVID DODWELL, Subscriber
EDUCATION IS THE MOST POWERFUL WEAPON WHICH YOU CAN USE TO CHANGE THE WORLD. NELSON MANDELA A University or College education may be the most important advantage you ll ever give your child. Start saving now for the GREATEST GIFT your child will ever receive, his/her future education. One day they will thank you for this most important gift.
Education Funds International HeritageESP.com Facebook.com/ HeritageFundsIntl For more information contact: Heritage Education Funds International, LLC. Home Office: 2005 Sheppard Ave. E., Suite 700, Toronto, ON, Canada M2J 5B4. Phone: 416. 502. 2500. Fax: 416.502.2555. Email: CustomerCare@HeritageESP.com. Distributors: Heritage Education Funds International, LLC Heritage Education Funds International (Asia) Limited Heritage Education Funds International (Jamaica) Limited Heritage Agency (Bermuda) Limited Heritage International (Bahamas) Limited Mutual Insurance (BVI) Agency Limited 2016, Heritage Education Funds International, LLC 1026A-HIST-ENG/07.16