Case You are an Administrative/Accounting Assistant at the Wandering Oaken's Trading Post Employees Credit Union, a small financial institution serving the banking needs of the Wandering Oaken's Trading Post Company employees. Your job at the credit union is giving you excellent experience in lots of different aspects of administration, accounting and banking while you finish your studies. Today, the director of the credit union (Olaf Neigemann) calls you into his office. OLAF: We had a board meeting last night, and you can help us put one of our decisions into practice. YOU: Sounds greatwhat can I do? OLAF: Well, one of our board members was looking into the investment side of our operationsyou know, RRSPs and so onand noticed that hardly any of our members are doing RESPs. YOU: Those are Registered Education Savings Plans, right? OLAF: Thats right. Its the plan where a person makes contributions in the name of a child and the government actually puts in money too. The government started it to help people save for their childrens education. Human Resources Development Arendelle estimates that a future bachelors degree for someone born in 2016 will cost $78,200 if the kid lives at home and a whopping $107,600 if the kid lives away from home. Those figures cover tuition, books, living expenses, etc. YOU: Whoathats a lot of money! Way more than my education is costing. OLAF: It really makes no sense at all NOT to have an RESP for a childwe think maybe our members havent heard about them or dont fully realize the benefits of them or even just dont understand what they are. We need to show them how RESPsespecially RESPs from us, of courseare in their best interests. YOU: Well, not all our members have kids.... OLAF: But that doesnt matter. For one thing, we know that plenty of our members DO have kids. Whats more, you dont need to be a parent to start an RESP. Grandparents, Aunts, Uncles, family friends...basically, anyone who has a child in their lives should seriously consider an RESP as a gift or whatever...whats a better gift than education?

2 YOU: Good point! Sure wish someone was helping me pay for my education.... But why not simply put money away for your kid to do whatever he or she wants with it? Just how much money does the government give? OLAF: Thats one of the main reasons to get an RESP. You can put up to $4000/year in an RESP (a lifetime total of $42,000 per child), and the government will then kick in 20% of your contribution up to a maximum of $400/year or lifetime total of $7,200. Thats $7,200 of totally free money for the childs education plus the interest earned on it though investments. The other reason to get an RESP is that the interest earnedon both your contributions and the governments contributionsis tax free until the money gets paid out to the child. YOU: Ok, I see. If youre gonna save money for a kids education, why not get some free government cash and some tax-free interest. If people simply save or invest money for a childs future without using an RESP, theyre not gonna get the government money, and theyll have to pay taxes on any interest income from the investment. But heynot all the kids I know went to post-secondary school. What if the kid doesnt go to college at all? OLAF: Well, if the kid decides not to go to college, the person who paid into the RESP has lots of different things they can do. They can transfer the RESP to another child. Or they can cash out the RESP and simply pay the government back for its contributionno penalty. Theyd then just have to pay taxes on the interest earned. So you can see how flexible it is. If someone needs to cash out an RESP at any time for any reasonthe kid doesnt want to go to school or theres a financial emergency or whateverthe moneys always easily available. The person just gives the government back its portion and pays taxes on the interest earned. But theres full information on all the RESP guidelines in our RESPs Made Simple brochure. YOU: OkIm sold. What do you want me to do? OLAF: I want you to write a letter to send out to all our members, persuading them to get RESPs through us if theyve got a kid in their lives. Our members are really loyal, so I dont think theyd get RESPs elsewhere, However, since most members dont seem to have RESPs yet, it looks like they need some convincing. Show them why its a good idea, and send them a copy of the brochure. Ill give you the mailing list laterfor now just draft the letter from the Dear Member part to the Sincerely, Olaf Neigemann, Director part. YOU: OkIll have it for you by tomorrow. Final Advice: Write the letter using the indirect, four-part persuasive pattern (and dont forget the brochure!). Add information to improve your letter (e.g. a clear action close with strong incentive to act promptly).