Empire’s RRSP Loan Program in partnership with National Bank

1. Empire’s RRSP Loan Programin partnership with National Bank

2. RRSP Loan Program • In partnership with National Bank • Rates as low as PRIME (variable rate loans up to 2 years) • No financial information required for loans under $15,500 and less than 2 years • Easy, on-line internet application (paper app also available on our advisor Web site) • Fast approvals: 24 hours, but often in a matter of minutes!

3. The opportunity • Unused RRSP contribution room has increased by 34 per cent to $367 billion (CIBC TSX:CM study, January, 2004) • Clients with existing RRSP loans with another financial institution can amalgamate the loan with National Bank • Carry forward provisions allow clients to carry forward RRSP contributions to future years; • Client benefits from large cash injection from the loan proceeds into their RRSP now and years of tax-sheltered growth • A portion of the RRSP deduction can be carried forward to future years to maximize tax benefits

4. The Opportunity • Most economic analysts agree interest rates are on the rise, as much as 250 basis points in 2005 • For clients wanting to top up their RRSP and who anticipate receiving a tax refund to pay down all or some of the loan, 2005 may be an opportune time before interest rates rise

5. Saving more can make a huge difference later on Compare the difference between a $250,000 or $500,000 RRSP In 10 years: • you will run out of money with a $250,000 RRSP • your investment will grow to $539,090 with a $500,000 RRSP! Assumes 8% rate of return, $3,000 monthly income

6. Consider the Tax Savings • Compare the tax savings* between a $2,000, $4,000 or $7,500 RRSP contribution Contributions: *Assumptions: based on basic personal exemption for 2004 and 39.5% provincial tax rate; individual returns will vary according to personal deductions allowed

7. Low Cost of Borrowing Rates current as at November 4, 2004

8. Paying Off Your Loan • Apply tax refund towards your RRSP Loan: • defer your first loan payment, then pay off as much of the loan as possible with your tax refund • then, begin regular PAC payments to pay off the rest of the loan; once it’s paid off, start Empire PAC Pay Loan with Refund Begin PAC payments File Tax Return Get Tax Refund Loan Funded Feb Mar Apr Apr May

9. Benefits of an RRSP Loan • Let’s take an example: • Age 50 in a 50% tax bracket • Past contribution room of $10,000 • Interest rate on $10,000 loan: 4.25% for two years • 180-day deferral • applies balance of tax refund to loan within 6 months • monthly payments are $226.04 • interest paid over two years: $407.99

10. Benefits of an RRSP Loan • Is this person further ahead? • Yes! • RSP Loan/Deposit $10,000 • $10,000 at 65, at 8% growth $31,722 • After-tax cost of loan $(5,000) • Interest costs $(407.99) • Overall Benefit $26,314

11. What’s New • Jet approvals — loans under $15,500 and less than 2 years will be automatically approved unless the client has a R9 or previous bankruptcy on file* • Future funding option: clients can choose to have the loan funded at a future date starting in December • Lower fixed rates • Proof of ID required *An R9 is classified as “bad debt”; placed for collection; moved without giving a new address.

12. How our program measures up *Loans under $15,500 with a term of 2 years or less will be automatically approved unless the client has a R9 or previous bankruptcy on file.

13. Program Details: Payment Options • Regular: First payment is 30 days from date of funding. Interest starts accruing from date of funding • Deferred: Defer first payment either 3 or 6 months after loan has been funded. Interest starts accruing from the date of funding and is compounded during the deferral period • Minimum term is 6 months if loan is deferred 3 months • Minimum term is 12 months if loan is deferred 6 months • Future Funding: Can have the loan funded at a future date for loans submitted between December and February. The latest date for future funding is February 27th, 2005

14. Payment Options • Clients can pay weekly, bi-weekly, or monthly • Actual day funds are withdrawn from the client’s bank account is 30 days from date of funding • Once loan is funded, clients can call National Bank to request a specific withdrawal date (eg. 15th of the month) • Funds must be from a personal account, not a commercial account since the policy is registered

15. Types of Loans All loans are principal plus interest • Fixed Rate: Payments are equal over the length of the term • Variable Rate - Variable Payments: • Payments fluctuate with the Prime rate. • First payment after deferral period will be principal only; subsequent payments will be principal + interest (two different amounts will be debited from client’s bank account) • Variable Rate - Equal Payments: • Payments are equal even if there is a rate change • Final payment is the variance (eg. for 1 year loan, 11 equal payments; 12th payment is the remaining balance)

16. Interest Rates and Options Rates as of October 27th, 2004

17. Loan Amounts and Terms No financial information is required for loans under $15,500 and less than 2 years. For all other loans, you must fill out the Applicant Financials section.

18. Before Submitting Your First Loan • You’ll need to obtain an ID and Password to access National Bank’s Web site • E-mail rrsploans@empire.ca and include: - your first and last name - Empire advisor code - fax number - e-mail address - language of preference (English or French)

19. How to Enter an RRSP Loan over the Internet • Go to National Bank’s website at https://nbcrrsp.filogix.com • Enter your user ID and Password. • Follow the seven easy tabs on the loan application. Any field with an * is mandatory. • Be sure to fill out the Client Account Number or Plan Number (if new policy, type in the word NEW)

20. RRSP Loan Program • Easy, on-line application

21. Submitting the Application • Review the Application Form and Statement of Disclosure • Click on the “Print RRSP Loan Application & Statement of Disclosure” button. Ensure both forms print correctly • Click on the “Submit RRSP Loan Application to National Bank” button • Have your client sign the loan documents. Three signatures are required • Make two photocopies of the loan documents: one for your client and one for your files

22. Credit Approval • You will receive notice via e-mail within 24 hours, often sooner • Once approved, fax the signed loan documents, a photocopy of the client’s void cheque and any additional requirements specified (if any) in the credit approval e-mail • At same time, send Elite investment application or additional deposit form to Empire Head Office • Loans will be funded to Empire within 24 hours of receiving your fax • Send the original loan documents by mail to National Bank as soon as you have sent the fax - originals must be received within 10 business days of approval

23. Declined Loans • All declines are sent to Empire. One of our Case Coordinators will contact you to let you know it has been declined • The decline notice only gives a short description of why it was declined. Your client may call NB for a detailed reason • If they would still like a loan, you can contact NB to see if the loan can be submitted at a lower amount or with a co-applicant* *You will need to submit a new loan application in this case

24. Paper-based Applications • Print off the RRSP loan application from the RRSP Loan Program page on Empire’s advisor Web site • Fill out the application (there are two different applications: one for one applicant, and one for two) • Have the client sign the application twice. Make a copy for yourself and the client • Fax the signed documents and a photocopy of the void cheque to NB

25. Credit Approval • Credit approval will come by e-mail or by fax within 48 hours for paper apps • Once credit approval has been received, send original loan documents to National Bank. Originals must be received within 10 business days of approval • Send investment application or additional deposit form to Empire Head Office

26. Financial Information • If the loan is for $15,500 or more, or for a term longer than two years, you have to fill out financial details. Client will need to provide: • Proof of Income • Copy of recent pay slip • Copy of previous year’s T4 • Copy of CRA’s Notice of Assessment • Balance Sheet information (assets, liabilities) • If self-employed, the client must provide last three years of tax assessment

27. Financial Information • You may be asked to provide additional information for the loan to be funded • For loans $15,500 or two years or more, the more information, the better

28. What to send to National Bank • Signed loan application • Client’s void cheque • Any additional requirements if specified in the credit approval decision

29. What to Send to Empire • New Clients: Elite or Elite XL Investment application (please write “RRSP Loan” on the app) • Existing clients: Additional Deposit Form for RRSP Loans (PDF on our RRSP Loan Program page on our advisor website) • Do not send loan application to Empire, it will be returned to your office

30. FundSERV loans • RRSP Loans must be submitted using a paper Elite or Elite XL application (trade cannot be submitted via FundSERV) • If you want the policy to be FundSERV enabled, write “Wire Policy” on the application so you can do future transactions on FundSERV • For existing FundSERV policies, send deposit instructions to Empire Head Office using RRSP Loan Additional Deposit Form

31. Special Situations • Client already has an RRSP loan through another carrier or through National Bank and wants to amalgamate the loan • Fill in the “Transfer” section (F) of the loan application • Fill in the outstanding balance (principal + interest) on the existing loan • Leave demand note blank: the bank will calculate the new payment amount based on the dollar value of the outstanding balance when the funds transfer • Balance of the transferred loan will be added to the new loan amount (eg. New loan of $5,000 + $3,500 balance of loan at the other institution = $8,500 new loan)

32. Tips • Remember to clearly mark “RRSP Loan” on the Elite or Elite XL application • The more information provided, the faster the approval and the more likely higher loans amounts will be approved • Send National Bank documents to National Bank/Empire documents to Empire

33. Once the Loan is Funded • Once the loan is funded the client can contact NB directly to make any changes ie changing banking information, PAC date, or obtaining loan balance. • A form to pay down or pay off the loan is available on the RRSP Loan page on Empire’s advisor Web site

34. Once the Loan is Funded • Client can • Pay down all or a portion of the loan and keep the loan payment the same or reduce it • Change their PAC date • Request other changes: name, address, banking info • Client will receive a loan statement from National Bank once a year in January to report their balance

35. Marketing Support information • RRSP Sales Guide contains everything you need to know • or, RRSP Loan page on our advisor Web site, www.empire.ca/advisor, contains • Internet Loan User Guide • RRSP Loan Calculator • FAQs • Current Prime rate • Summary sheet with rates and terms • Paper amortization chart

36. Contact Information • National Bank Advisor line: 1 800 901-0172 • National Bank Client line: 1 866 666-1379 • National Bank Web site: https://nbcrrsp.filogix.com • Empire’s advisor Web site, www.empire.ca/advisor • RRSP Centre • RRSP Loans page