The Christian and Missionary Alliance. Group Retirement Plan Information Session

Transcription

1 The Christian and Missionary Alliance Group Retirement Plan Information Session

2 Introducing Lorna Stewart Certified Financial Planner, Elder Planning Counselor, Retirement & Investment Consultant Over 35 years experience in financial services Focused on providing investment strategies and retirement planning tools to members Works closely with Alliance Retiral Fund members transitioning into retirement

3 Introducing Drew Pritchard Drew Pritchard, Senior Vice-President Started providing support to the C&MA and Alliance Retiral Fund in 1990 Over 37 years experience in Canadian retirement plans Works closely with the Investment Advisory Council in the evaluation, selection and monitoring of the fund s investment platform

4 Your Retirement Plan: Who s Who Plan Sponsor: The Christian and Missionary Alliance establish and maintain your group plan Retirement Consultant: Reuter Benefits assists with investment and retirement planning provides consulting advice on the plan Plan Administrator: Manulife Financial administers your account holds your assets provides reports and online access

5 Agenda Your Retiral Group Retirement Program Lower Investment Management Fees in a Group Plan Member Resources IAC Investment Oversight and Governance IAC Investment and Portfolio Strategies Reuter Benefits Support

6 Your Retiral Group Retirement Program

7 Understanding Your Plan Defined Contribution Plan = you know how much is being contributed The value of your plan and income you will receive is not guaranteed Value at retirement determined by the amount contributed and investments you choose

8 Plan Design (RPP) Eligibility Full-Time Employees Immediate Part-Time Employees Per legislation Employee Contributions Per member booklet Employer Contributions Per member booklet Voluntary Contributions Allowed Yes. Up to Canada Revenue Agency Maximum Withdrawals Upon termination of employment or retirement for required contributions per legislation; voluntary contributions may be withdrawn at any time

9 Group RPP Maximum Contribution Canada Revenue Agency rules 18% of current year s earned income to annual CRA maximum Employee and employer plus voluntary amounts via payroll deduction reported on your T4 Amount contributed to RPP reduces your next year s RRSP limit

10 Lower Management Fees in a Group Plan

11 Your Group Plan Investment Choices 1. Guaranteed Interest Accounts Based on current interest rates 2. Funds Collection of stocks/bonds/cash Investors purchase units of the fund with their contribution Fund has been built by professional money managers Provides investment diversification

12 Lower Investment Management Fees Group fees are lower Lower fee is charged for greater assets (group plan includes total of all members contributions and assets) Management fees on individual plans (e.g. bank RRSPs) calculated based on assets of one plan only Lower fees help your money grow

13 Pay Lower Fees Through Your Group Plan Low investment management fees Fees are less than 1% Individual plans charge approximately 2.5% (Management Expense Ratio)

14 What do you save if you pay 1.5% less in fees for one year? Account Balance = $50,000 Individual plan fee 50,000 x 2.5% $1,250 Group plan fee 50,000 x 1.0% Amount you save in fees for one year in a group plan $ 500 $ 750

15 What does a 1.5% difference mean over time? Group Plan Individual Plan Gross Rate of Return 5% 5% IMF 1% 2.5% Initial Savings $50,000 $50,000 Annual Savings $6,000 $6,000 Years of Growth Accumulated Value $383,167 $297,643 Difference to you $85,524 *getsmarteraboutmoney.ca

16 Want to Transfer into your Group Plan? Registered Assets can be transferred tax-free into the plan Reuter Benefits assists with the paperwork Be aware of potential fees charged by the institution doing the transfer

17 Group Membership Advantages When you terminate employment or retire, you can remain in a Reuter group plan with continued access to ARF fund managers Lower fees Reuter Benefits support and member services C&MA Employee Termination of Employment Full Retirement

18 Reuter Group Retirement Income Plan You can continue to access the ARF fund managers through the Reuter Group Retirement Income Plan with Manulife Financial Can invest in both low risk Guaranteed Interest Accounts and market-based funds Investment Management Fees are very competitive

19 Member Resources

20 Member Resources Mobile app Online retirement planner Your annual group retirement statements are mailed to you Statements are also available online

21 IAC Investment Oversight and Governance

22 History of the Alliance Retiral Fund Defined Benefit Pension Plan implemented October 1, 1956 Converted to a Defined Contribution Plan on January 1, 1990 with Manulife Investments original held within a single balanced fund As of April 30th, 2018, the fund s total assets were $156,496,673

23 History of the Investment Advisory Committee (IAC) IAC was created in 1996 to provide investment oversight on behalf of the C&MA Members are recommended by the IAC Committee and ratified by the C&MA Board Committee originally comprised of 3 members Plan has evolved into several funds diversified by asset class and style Today the IAC has 7 members, Chaired by Ken Pelissero

24 IAC Investment Oversight and Governance Average ARF Member Rates of Return on a Monthly and Year-to-date basis ARF average Member returns compared to Morningstar average balanced funds Investment Management Fees Quarterly the IAC meets with Reuter Benefits via conference call In-depth reviews of the monthly reporting Detailed risk assessment and portfolio construction analysis

25 Annual Meetings of the IAC Conduct Face to Face Investment Manager interviews: Investment Philosophy Portfolio Management teams and process analysis Portfolio Performance Risk Controls Asset mix strategy Compliance & regulatory review Investment trends and market issues Investment Fund alternatives (where necessary)

26 IAC Investment and Portfolio Strategies

27 IAC Investment and Portfolio Strategies Fidelity Canadian Bond Fixed Income Securities including Government & Corporate Bonds Long term investment goal is to outperform the universe of bonds by 0.5% Mawer Canadian Equity Diversified Large CAP Canadian Equities Goal is to outperform the index over a business cycle

28 IAC Investment and Portfolio Strategies (continued) C&MA Foreign Equity (Mawer) Diversified Foreign Equities No currency hedging Tobacco, alcohol and gambling stocks excluded Manulife Monthly High Income Fixed Income, Domestic & Foreign Equities, and REITs Currency hedged strategy in place for foreign equities Active benchmark agnostic value biased manager

29 Current ARF Asset Mix April 30th, 2018 Fidelity Canadian Bond 16.0% Manulife Monthly High Income 44.5% Mawer Canadian Equity 21.0% C&MA Foreign Equity (Mawer) 18.5%

30 Member Investment Options Default Investment decisions to the IAC recommendations or Members can select their own investments from available funds

31 Active Investment Choice Members Complete investor style questionnaire Identify investor style Review sample portfolios and detailed fund information

32 Your Fund Selection Guide

33 Sample Portfolios Conservative Investor Profile (0-7 Points) Moderate Investor Profile (8-22 Points)

34 Sample Portfolios Balanced Investor Profile (23-37 Points) Growth Investor Profile (38-48 Points) Aggressive Investor Profile (38-48 Points)

35 Reuter Benefits Support

36 Reuter Benefits Support Contact Reuter Benefits to Discuss details of your ARF plan Determine your risk tolerance and review your investments Review your on-line retirement planner, government resources and transition into retirement

37 Reuter Benefits Recommendations 5+ years from retirement? Complete the on-line planner Fewer than 5 years from retirement? Complete the budget worksheet and ask us for retirement income illustration Contact us to review your investments to ensure your risk level is appropriate Planning to retire within the year? Contact Reuter Benefits to start the process

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39 Group Retirement Plan Information Session