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UNBC Retirement Savings Plan Defined Contribution Pension Plan (DCPP)

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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UNBC Retirement Savings Plan Defined Contribution Pension Plan (DCPP)

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  1. UNBC Retirement Savings Plan Defined Contribution Pension Plan (DCPP)

  2. why save? • Getting started my plan • Your plan advantage my investments • Investment review • Choosing your funds my account • Get involved

  3. Saving for Retirement

  4. How much money do you need for retirement? Canadians need 65% to 80% pre-retirement income replacement

  5. Where will your money come from? Retirement income supplement CPP/OAS Home secondary Other Savings Personal RRSP primary UNBC Defined Contribution Pension Plan

  6. Government benefits • Indexing: Your CPP are indexed annually, OAS is indexed quarterly • CPP payments are based on how much and how long you have contributed • Request your CPP contributions & benefit statement from: www.hrsdc.gc.ca • OAS payments are based on your Canadian residency

  7. Benefits of starting early Assumes a 6% rate of return

  8. 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

  9. 2008 $20,000 2009 $21,000 2010 $22,000 Your RRSP limits Lesser of 18% of previous years earnings or $20,000 Pension Adjustment (PA)* Unused RRSP Room (if any) - + * Pension Adjustment (PA) shown on T4. Applies to DCPP contributions.

  10. Where contributions are directed…. 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 YMPE = Yearly Maximum Pensionable Earnings, $44,900.

  11. What does this mean to me ? Assumption: Mary earns $65,000 annually. 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

  12. When do I 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

  13. 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

  14. Example $10,000 Fund Management % 0.70% Annual Fees $70.00 To view your specific management fees visit www.sunlife.ca/member Understanding Fees Fund Management Fee (expressed as a % of fund assets you hold)

  15. Fund Management Fees at Dec. 31, 2007

  16. Fund Management Fees at Dec. 31, 2007

  17. 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

  18. You get it all when you save through your company plan × × ×  × × ×  × × ×  × × ×  × ×   ×  × ×

  19. 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

  20. 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

  21. Growth of $100 From Jan 1998 to Dec 2007 $247 $184 $146 $124 Source: Morningstar Research Inc.

  22. 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

  23. 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

  24. 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/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 Fund Management Fees tend to be lower than an Active Fund Manager

  25. 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 If the manager is right, the company’s stock will increase in price as the company achieves business and earnings growth

  26. 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

  27. Dollar cost averaging Dollar cost averaging Market Value = $3,557.96 Rate of Return = 18.59%

  28. 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

  29. Your investment fund choices

  30. 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

  31. 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

  32. Fund Performance Data through 31 Dec 2007

  33. Fund Performance Data through 31 Dec 2007

  34. Fund Asset Mix

  35. Fund Asset Mix

  36. Saving for retirement

  37. Getting Started • SelectResource Centre • Click on My Money Tools Sign in to www.sunlife.ca/member

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

  39. my money Retirement Planner Your personal action plan

  40. Keeping you involved Read your personal statements • Quarterly member statements • Personal rates of return • Transaction history • Plan information • Bulletin board

  41. Keeping you involved Manage your money on-line Internet www.sunlife.ca/member Education Account Access Morningstar • Investment Risk Profiler • Retirement Planner • Edu-cast • New personal financial planning tools • Account balances • Transfer between funds • Secure e-mail • RRSP receipts • On-line statements • Investment reports

  42. Keeping you involved Call 1-866-733-8612 for access to your account or help understanding your plan • Account balances • Rates of return • Market information • Enrolment assistance • Transfer between funds • Change investment allocation Help is available in 150 languages Phone 1-866-733-8612 Automated Telephone System Customer Care Centre

  43. 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

  44. Keeping you involved Do your financial planning online Withdrawal calculator   Capital Gains vs. RRSP calculator  Mortgage vs. RRSP calculator  RRSP Loan calculator

  45. Keeping you involved Do your financial planning online  Annuity calculator  OAS claw-back calculator  RRIF calculator

  46. 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)

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