Simon Fraser University

RRSP savings for faculty, staff

Jan 09, 2003 , vol. 26, no. 1

By Diane Luckow
It's a new year and SFU staff and faculty are another year closer to retirement. That's why it's important to think about RRSP contributions and saving for life after 65 or, increasingly, age 55.

SFU has offered a group RRSP plan since 1990 and this year is adding four well-known investment fund managers whose funds carry extremely attractive management expense ratios (MERs) of just .10 per cent to .30 per cent.

A management expense ratio represents the investor's portion of the cost of operating the fund. This fee, calculated daily, diminishes the overall rate of return on an investment. While the average, annual retail RRSP MER in Canada is 2.35 per cent, the funds in SFU's current group RRSP plan charge investors between .63 per cent and 1.65 per cent.

The lower MERs from the new fund managers are the result of special negotiating between SFU and Sun Life Financial, which is the custodian of SFU's $170 million academic staff pension fund. In May 2002, Sun Life bought out Clarica Life Insurance, which held SFU's group RRSP plan.

Bruce Anderson, SFU's director of human resources, explains that SFU was then able to negotiate the low MERs because Sun Life already administers the assets of the academic staff pension plan. Now that they also hold the group RRSP plan, he says, they could offer economies of scale.

All staff and faculty may now invest in the pension plan's 11 funds through the group RRSP plan. Funds include those managed by Sprucegrove International, which ranks in the top quartile of non-North American fund managers; Phillips, Hager and North, Canada's second largest mutual fund manager; Maclean Budden and Barclay's Global Investment. Sprucegrove does not sell its funds in the retail market so this is an exclusive opportunity for SFU employees interested in this fund.

Additional advantages of investing through SFU's group RRSP include the payroll deduction option with immediate tax deferral savings. For example, an employee earning $3,000/month who wishes to make a monthly $100 contribution will pay tax on $2900, with just $82 deducted from their paycheque. The new fund managers also allow spousal RRSP contributions and will permit a spouse to transfer existing RRSP monies into their funds. Spousal transferals are not an option with the other 36 funds in the Group RRSP plan. Employees may also manage their investments online.

Find out more about the new SFU group RRSP options during the week of Jan. 27 when Sun Life Financial will be offering education sessions to all continuing staff and faculty at all campuses:

Jan. 27 - 12:30 p.m.-1:20 p.m., WMX 2200, Burnaby;
Jan. 28 - 12:30 p.m.-1:20 p.m., WMX 3210, Burnaby;
Jan. 29 - 12:30 p.m.-1:20 p.m., AQ 5018, Burnaby;
Jan. 30 - noon - Bridge room, Surrey;
Jan. 31 - noon - RBC Dominion room, Harbour Centre.