• What is an RRSP and what are its advantages?
• Who can contribute to a Solidarity Fund QFL RRSP?
• Does it pay to borrow in order to contribute?
• Can a Fund RRSP be used to purchase a home?
• Are my Fund shares "frozen" until I reach age 65?
• What is the maximum annual RRSP contribution eligible for income tax credits?
• What are the Fund's annual administration fees?
• Does the Fund only invest in venture capital?
  

What is an RRSP and what are its advantages?
Intended as a way to save for retirement, a registered retirement savings plan has three main advantages. First, an RRSP helps prepare for a more comfortable retirement. Second, the contribution amount is tax deductible to a limit set out by law, and third, the investment gains are tax-free so long as they remain in your plan. As well, purchasing Class A, Series 1 shares in the Fund RRSP entitles you to a tax credit of 30% of the amount invested (15% from the federal government and 15% from the Québec government), which is added to the average 44.8% deduction provided by a traditional RRSP.


- Who can contribute to a Solidarity Fund QFL RRSP?
All Québec taxpayers can contribute to the Fund RRSP. However, under the Taxation Act (Québec) (R.S.Q. c.1-3), an income tax credit may not be claimed in the following cases:

I	If you have reached the age of 55 and availed yourself of the right to early retirement or retirement*; or
II	If you contribute to a spousal RRSP and your spouse has reached the age of 55 and availed himself/herself of a right to early retirement or retirement*; or
III	If, prior to the end of the year, you have reached the age of 65 or if deceased, would have reached such age; or
IV	If you contribute to a spousal RRSP and your spouse has reached the age of 65 or would have reached this age in the year of his/her death; or
V	If you have requested to redeem your shares within 60 days of the initial subscription; or
VI	If you are disabled and have requested that the Fund redeem your shares because of the disability.

* Even if you meet the requirements set out in paragraphs I) and II), you may nevertheless benefit from a tax credit if your employment or business income for the year is greater than the general exemption ($3,500) applicable under the Québec Pension Plan. To do so, you must not have turned 65 before the end of the year or redeemed or purchased by agreement all or part of your shares.

- Are you iligible for the tax credit?
Under federal draf legislation made public on February 27, 2004, you will be eligible for a federal tax only if Québec grants a credit. For more information, contact the Canada Customs and Revenue Agency at 1 800 959-8281


Does it pay to borrow in order to contribute?
While the interest on RRSP loans is not tax deductible, borrowing to make an RRSP contribution may still be worth your while. The following important factors should be considered when making your decision: the term of the loan, the interest rate and your ability to repay the loan.


Can a Fund RRSP be used to purchase a home?
Since December 1, 1998, the Fund has allowed share redemption under certain conditions, making it possible to benefit from the Home Buyers’ Plan (HBP). Also, periodic repayments under an HBP with another financial institution may be made to a Fund RRSP, allowing you to benefit from tax credits even though the RRSP deduction was already taken.


Are my Fund shares "frozen" until I reach age 65?
It is easier than you think to redeem your Fund shares. The Fund will automatically redeem your shares, provided you submit the required documents and are at least 50 years of age. Over the years, the Fund has amended its redemption policy to meet the needs of its shareholders. As such, the Fund may redeem your shares for reasons other than retirement. For more details, see the Redemption Criteria section.


What is the maximum annual RRSP contribution eligible for income tax credits?
Both the federal and Québec governments have set at $5,000 the maximum annual contribution eligible for tax credits granted to labour-sponsored investment funds.

 
What are the Fund's annual administration fees?
Since January 1999, Fund shareholders are no longer charged administration fees. Only outstanding fees must be paid. New shareholders pay a one-time $25 fee when opening an account.


Does the Fund only invest in venture capital?
The Fund is a venture capital company that invests primarily in Québec SMEs because they create jobs. To reduce the inherent risk associated with such investments, the Fund seeks to balance its portfolio through diversification. This is achieved by also investing in capital stock, loans, government bonds, money market instruments and other assets.


 For more information on the Solidarity Fund QFL, see our Simplified Prospectus.