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UNBC Retirement Savings Plan Defined Contribution Pension Plan (DCPP). why save? Getting started my plan Your plan advantage my investments Investment review Choosing your funds my account Get involved. Saving for Retirement. How much money do you need for retirement?.

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Presentation Transcript
slide1

UNBC

Retirement Savings Plan

Defined Contribution Pension Plan (DCPP)

slide2

why save?

  • Getting started

my plan

  • Your plan advantage

my investments

  • Investment review
  • Choosing your funds

my account

  • Get involved
slide4

How much money do you need for retirement?

Canadians need 65% to 80% pre-retirement income replacement

slide5

Where will your money come from?

Retirement income

supplement

CPP/OAS

Home

secondary

Other Savings

Personal RRSP

primary

UNBC Defined Contribution Pension Plan

slide6

Government benefits

Request your CPP/QPP contributions & benefit statement from: www.servicecanada.gc.ca

* Rates above as of April 2009

slide7

Benefits of starting early

Assumes a 6% rate of return

slide9

Sun Life Financial

InvestmentManagers

You/member

UNBC

  • Your Account
  • Making contributions
  • Understanding investments
  • Choosing investments
  • Monitoring savings and investments
  • Filing personal information updates
  • RRSP limits
  • Paying investment
  • management fees
  • Payingwithdrawal fees
  • Sponsor the plan
  • Pension Committee
  • Plan design
  • Selecting Investment Managers
  • Selecting funds
  • Selecting the record keeper
  • Monitoring the plan
  • Record keeping
  • Preparing statements
  • Developing tools
  • Member education
  • Tracking your investments
  • Tax receipts
  • Funds
  • Performing research
  • Creating the fund
  • Selecting the stocksor bonds
  • Buying and selling

Responsibilities

Insert Slide Title Here

slide10

2008

$21,000

2009

$22,000

2010

indexed

DC Plan contribution limits

Lesser of 18%

of current

years earnings

or $22,000

  • Includes:
    • Your contributions
    • UNBC’s contributions
    • Additional voluntary contributions

DC Pension Plan Contributions are part of your Pension Adjustment,

show up on your T4 slip and affect the amount that you can contribute to your RRSP

slide11

2008

$20,000

2009

$21,000

2010

$22,000

RRSP contribution limits

Lesser of 18%

of previous

years earnings

or $21,000

Pension

Adjustment

(PA)*

Unused

RRSP

Room (if any)

-

+

For your information about your personal limits visit www.cra.gc.ca

  • Pension Adjustment (PA) shown on T4.
slide12

2009 Plan Contributions

UNBC Registered

Pension Plan

Registered Retirement Savings Plan (RRSP)

UNBC

Employee

Compulsory

  • 3% of earnings up to the YMPE
  • 5% above the YMPE
  • Additional Voluntary (no match)
  • Transfers-in allowed
  • 8% of earnings up to the YMPE
  • 10% above the YMPE

2009 YMPE = Yearly Maximum Pensionable Earnings = $46,300.

slide13

Doing the math

Assumption:

Mary earns $65,000 annually.

Registered Retirement Savings Plan (RRSP)

Mary $46,300 x 3% = $1,389.00

Mary $18,700 x 5% = $ 935.00

UNBC $46,300 x 8% = $3,704.00

UNBC $18,700 x 10% = $1,870.00

Total Benefit = $7,898.00

slide14

When do you own the funds?

  • Vesting
  • Vesting refers to when you own the University contributions. You are vested after 2 years of continuous service with the University.
  • If you leave UNBC prior to 2 years of continuous service, contributions are not yours to take with you.
  • You always own your contributions.
  • Locking in
  • Once you have been contributing into the DCPP for 2 years, the funds become locked in which means they are not available for you to use until you retire.

Registered Retirement Savings Plan (RRSP)

Mary $44,900 x 3% = $1,263.00

Mary $ 7,900 x 5% = $ 395.00

UNBC $44,900 x 8% = $3,368.00

UNBC $ 7,900 x 10% = $ 790.00

Total Benefit = $5,816.00

slide15

What happens if you….

What happens if you….

What happens if you…

  • Leave UNBC
  • Transfer your DCPP to:
    • Locked in account with Sun Life Financial - CHOICES
    • Locked in account at another financial institution
    • A new employer (if permitted)
  • Retire from UNBC
  • Transfer your DCPP to:
    • A LIF (Life Income Fund) with Sun Life Financial - CHOICES
    • A LIF at another financial institution
  • Purchase an annuity
slide16

You get it all when you save through your company plan

×

×

×

×

×

×

×

×

×

×

×

×

×

×

×

×

×

slide18

Your steps to investing

  • Understand the basics
    • types of funds
    • risk vs. returns
    • importance of diversification
  • Determine what type of investor you are
  • Choose your funds
    • refer to theInvestment Reportssection through your online account
slide19

Understand risk vs. return

  • Money market
    • Federal government debt
    • Short term, less than 1 year
  • Bonds
    • Promise to repay debt
    • Receives interest
    • Various terms to maturity
    • Government and corporate
  • Balanced
    • Mix of cash, bond and equities
    • Automatic diversification
  • Equities
    • Ownership in company
    • Share in company profits
    • Canadian or foreign
slide20

$35,000

$30,000

$25,000

$20,000

$15,000

$10,000

$5,000

Dec 98

Dec 99

Dec 00

Dec 01

Dec 02

Dec 03

Dec 04

Dec 05

Dec 06

Dec 07

Dec 08

TSX DEX 91-Day T-Bill Index

TSX DEX Universe Bond Index

S&P/TSX Composite Index

Consumer Price Index

Growth of $10,000

(January 1999 – December 2008)

$18,000

$18,000

$17,200

$17,200

$14,400

$14,400

$12,500

Source : Morningstar.ca

slide21

Ways you can diversify

Asset Class

Manager

Style

Foreign

Markets

Sector

Diversify your investments

  • Diversification: holding different types of investments in your portfolio
  • Lower your overall risk by:not putting all of your eggs in one basket
slide22

Think about investing outside of Canada

  • Canada Revenue Agency now allows100%foreign content in your registered accounts
  • Canada represents only2-3%of the world stock market
  • Some foreign markets have historically outperformed Canada over the long-term
  • Consider investing outside of Canada as one way to diversify
slide24

Investment Manager approaches

Active

Objective is tooutperform a market indexbased on research of current market conditions and company prospects

Actively buys and sells securities in individual funds

Passive or Index

Simply buys and sells assets tomatch characteristics of an index, fundperformance should be similar to the index, i.e. S&P TSX

Fund Manager applies an Investment “style” to their approach

BonaVista, Beutel Goodman

McLean Budden, PH&N, CI

Fund Management Fees tend to

be lower than an Active Fund Manager

BGI

slide25

Investment styles

Value

Focuses on stocks that a fund manager thinks are currentlyundervalued in price and will eventually have their worth recognized by the market

Growth

Believes that the single most important thing driving stock pricesis rapidlyrising corporate earnings-- and that's what they look for

If the manager is right, the stock

will increase in price as others

in the market recognize the

true value of the stock

CI, BonaVista, Beutel Goodman

If the manager is right, the company’s

stock will increase in price as the

company achieves business and

earnings growth

McLean Budden

slide26

Investment styles

GARP

Growth at a reasonable price

- looks for stocks of growth companies that they canbuy for a reasonable price

This is a combination of value

and growth investing

McLean Budden Global

slide27

Dollar cost averaging

Dollar cost averaging

Market Value = $3,557.96

Rate of Return = 18.59%

slide29

mymoney Investment Risk Profiler

Your guide to choosing funds

  • Complete the questionnaire in theInvestment Risk Profileronline
  • www.sunlife.ca/member
  • Review your fund choices

online throughMorningstar®

  • Select your funds according to your

risk tolerance

slide31

Building your own asset mix

Example: A score of 36 to 85 points - Moderate

15%

Intl. Equity

10%

Money Market

15%

U.S. Equity

40%

Fixed Income

20%

CDN. Equity

slide32

1 year later

Starting point

5%

5%

10%

45%

35%

60%

45%

60%

Stocks

Transfer:

10% Cdn Equity to Bonds

5% Cdn Equity to International Equity

Rebalance often to match your risk tolerance

Starting point

10%

10%

35%

Bonds

45%

Bonds

45%

45%

45%

45%

Stocks

International Equity

Canadian Equity

Bonds

slide35

Fund Performance

Data through 31 Dec 2008

slide36

Fund Performance

Data through 31 Dec 2008

slide37

Example

$10,000

Fund Management %

0.70%

Annual Fees

$70.00

To view your fees visit www.sunlife.ca/member

Understanding Fees

Fund Management Fee

(expressed as a % of fund assets you hold)

slide40

Investment management fee

Annual contributions

Years of contributions

2%

$5,000

20

1.5%

$5,000

20

Ending balance

2%

$148,588

1%

$167,568

1.5%

$157,752

1%

$5,000

20

Total contribution: $100,000

Low Fund Management Fees (FMF) make a difference

* Assumes a 5.75% real rate of return

slide41

Retirement

Planning

Tools

slide42

Plan Member Website

  • SelectResource Centre
  • Click on My Money Tools

Sign in to

www.sunlife.ca/member

slide43

mymoney retirement planner

  • my information
  • This is the first screen of the retirement planner
  • Some of the information on this screen is pre-populated
slide44

mymoney retirement planner

  • my assets
  • Enter any additional assets or income you have
  • You can include pensions from previous employers
slide45

mymoney retirement planner

  • my lifestyle
  • A lifestyle is suggested based on your personal information
  • You can view information on other lifestyles
  • Select your lifestyle and receive your personal action plan
slide46

mymoney retirement planner

Your personal action plan

slide48

Keeping you involved

Read your personal statements

  • Quarterly (Available Online)
  • Easy to read
  • Personal rates of return
  • Summary of all plans
  • Transaction history
  • Plan information
  • Bulletin board
slide49

Keeping you involved

Internet

www.sunlife.ca/member

Customer Care Centre

1-866-733-8612

  • Receive up-to-date account balances
  • View transaction history
  • Make investment changes
  • Link directly to investment reports
  • View online member statements
  • 24 hour automated phone account access
  • Representatives available every business day (8 am to 8 pm ET)
  • Account updates
  • 150 languages supported
slide50

Getting information about your funds (Morningstar®)

Investment Information

  • Capital market performance
  • Individual fund performance
  • Investment style, fund and manager updates

Portfolio X-Ray

  • Analyze different combinations of funds as a single portfolio; including the effect of asset allocation changes to the portfolio

Fund Compare

  • Compare and analyze funds in your plan with the full list of available funds

Performance Reports

  • Generate investment performance reports for your plan’s funds
slide51

Keeping you involved

Do your financial planning online

Withdrawal

calculator

Capital Gains vs.

RRSP calculator

Mortgage vs.

RRSP calculator

RRSP Loan

calculator

slide52

Keeping you involved

Do your financial planning online

Annuity calculator

OAS claw-back

calculator

RRIF calculator

slide53

Your action plan

  • Use the Investment risk profilerto determine your recommended portfolio allocation
  • Use the Retirement planner to evaluate if your current contributions will meet your retirement goals
  • Review your current portfolio
  • Update your future investment instructions as required
  • Update your existing portfolio as required
  • Update any personal information that is out of date (ie. Beneficiary)