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Eirikur,
As a trustee of our current pension plan, it surprises me that your portfolio has produced “little to no return” since 2002.
The Balanced Fund, which is the default option for all faculty who enter the plan, has had an annualized return of nearly 7% over the last 10 years: mostly in the 6-11% range each year, except for 2008 (-14.8%), 2011 (0%), and 2013 (18.8%). In seven of
those 10 years it has beaten its benchmark and, as our Board chair already noted, is in the top quartile of balanced funds. The 10 years prior to that were similar: the Balanced Fund did very well except in years when everything went to hell in a hand basket
anyway (2001, 2002 and 2007).
Our investment management fees are very competitive for actively managed institutional funds – they cannot match the super-low-fee index ETFs but they are not meant to, and the fees are significantly better than those on retail mutual funds.
We do know that some members are invested in Sun Life’s GICs, which are extremely secure and therefore extremely low-return investments. I wonder if you perhaps chose to put your money in one of these GICs, and that is how you ended up with such poor returns?
For everyone’s information, returns on the Balanced Fund as well as on all other optional funds can be found in the pension plan’s Annual Reports, available at https://www.sfu.ca/human-resources/faculty/pensions.html.
Kind regards,
Barbara Sanders
From: Eirikur Palsson <epalsson@sfu.ca>
Date: Friday, November 16, 2018 at 8:23 PM To: Michael Monagan <mmonagan@sfu.ca> Cc: Ronda Arab <ronda_arab@sfu.ca>, Julian Christians <julian_christians@sfu.ca>, academic-discussion <academic-discussion@sfu.ca> Subject: Re: pension plan It’s a good question, but I would presume/hope that if you worked 50% you would be able to negotiate some kind of partial pension. Because in the extreme case if you you only worked 10% the last five years and got no pension you wouldn’t be able
to make it. Maybe someone can answer this.
I was hired in 2002 I really wish that we had DB at that time instead of being forced to have the benefits managed by SunLife. For the last 16 years I have watched them get little to no return on my retirement folio so it is very slim.
Based on what I have in my retirement account now and assuming I retire at 65 and die at 80.
If I continue with same returns from SunLife as I have now my, pension once I retire would be less than half than what I calculate I would get from
the DB plan. Switching now may have less gain depending on how long I live, but I would have been much much better off with a DB plan.
The DB plan is just like any insurance the people that don’t have accidents pay for those that do. So people who die earlier contribute more. But a DB plan can give an easy of mind that you be covered when you retire regardless of how long you
live. For me it reduces stress and is invaluable.
If the DB benefit plan does not pass I would like the faculty union to look at getting the option to manage our own RRSP on the stock market and not have to have SunLife mange it and pay them high management fees for mediocre gains.
Eirikur Palsson
Associate Professor, Department of Biology
Simon Fraser University |