RDSP holders still waiting
Bank of Montreal pays price for being first off the mark
By Garry Marr, The Financial Post
August 8, 2009
 
If you are one of 15,000 Canadians who signed up for a registered disability savings plan (RDSP) by the March 2 deadline, you may be asking what happened to your matching government grant.

Ottawa introduced the RDSP last December, after promising it in the March 2007 budget. Bank of Montreal, to its credit, was the first financial institution to offer the account. Royal Bank and Canadian Imperial Bank of Commerce soon followed. TD Canada Trust and Scotiabank say they will offer the plan for disabled customers and their families this year.
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So what happened? It appears the bank bit off more than it could chew. BMO got out of the gate first in December with its RDSP and landed about 75% of the market. RBC and CIBC joined in February, but their customers have already received their grant and bond money.

"We are looking at receiving payments from the government at the end of August," says David Sharone, product manager of registered plans with BMO.

Why the delay? BMO says it didn't send the files of its 15,000 RDSP customers to the government until this month because its systems needed to be set up properly to handle so many new accounts.
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The other banks, who have smaller RDSP transaction volumes, have been handling the business manually and have been able to process the information quickly.

In the future, BMO expects to be able to turn information over to the government on a monthly basis with the corresponding grant money flowing back in about four to six weeks.
The quick turnaround will be important because the deadline for 2009 RDSP contributions is fast approaching. The 2008 deadline was extended until March 2, 2009 on a one-time basis. Going forward, the deadline for RDSP contributions for any given year will be Dec. 31.
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At the earliest, an individual could receive the grant payment in their RDSP at the end of the month following the month in which they made their contribution. For example, a contribution is made on July 28, 2009. The earliest a grant would be paid is August 31, 2009," an HRSDC spokesman said in an email.

The banks actually have until June 30, 2010 to submit grant requests made in 2008 and 2009. This was a one-time exemption. In the future, the banks get 180 days to submit grant requests on contributions. Six months seems like a long time, but that's the maximum; the expected turnaround to get your grant money will be closer to six weeks.

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