Hi Julian
- Your cautionary note about financial advisors is duly noted. We should be critical about all information we receive on the issue of how we save - whether from financial advisors, SFUFA or BCCPP. The only people to 'fully trust' as acting in our financial best interest are those acting in a fiduciary capacity. For all else, caveat emptor.
- Lest colleagues be deterred from seeking independent financial advice from a qualified professional: not all financial advisors are out to sell you a product. Indeed, certfied CFPS are obligated to work in your best interests. And you can find those who charge a fee up-front to give you advice on your current estate situation. Or you can sit with your tax accountant to look at these issues.
- Someone with a training in actuarial modeling _and_ with information about an individual's particular situation can, in fact, help them arrive at answers to questions such as " Should I be more concerned about the amount of capital available at retirement or the predictability of my income in retirement?" For instance, by withdrawing a sensible amount from one's LIF annually, one can actually draw out one's savings for 30 years post-retirement (so, till age 95, say). Now whether the amount you withdraw is going to suffice for your needs, or how best to re-invest your retirement savings at the time of retirement - all of this you can and should discuss.
- RRSP inheritance is not the only mechanism which is open to those of us who wish to leave money to our kids. One could opt to invest in annuities which pay out to the beneficiaries over time; there are other mechanisms for reducing tax burdens.
There's really no getting away from the fact that DB plans afford us less flexibility in terms of how much and how we plan what we leave beneficiaries, if that is what you want. Conversely, there's no question that annuities through a DB plan are way cheaper than those purchased in the market, if that is what you want.
And a final word about fossil fuel free (FFF) funds: SFUFA members voted to direct the SFU DC plan to investigate FFF funds as options. The trustees worked very, very hard over several years to investigate this possibility from a whole range of angles - legal, financial, governance-related.... indeed, ours was the _first_ university in Canada to even ask seriously in the market about the possibility of such a FFF fund in the pension plan. Nearly none suitable for pensions existed at the time.
The decision to offer an FFF option was not at all taken lightly. The selection of the particular fund was not done lightly. It is one option amongst many others. The process took years, and a lot of hours (unpaid, unrecognized, and yet in a fiduciary capacity) by trustees who are fellow-colleagues. At the time it was adopted, SFU was the _first_ university in Canada to offer an FFF option in a pension fund. (For anyone interested in the history of pension law, you'll see why this is noteworthy.) You can invest in an FFF fund now in the DC plan, if you want. If you don't want to, you don't have to.
None of this would happen with the BCCPP. We would have near-zero influence. There is no mechanism to offer options in that fund. If the BCCPP decided tomorrow to do X with its funds, all members would automatically have only X as their option.
cheers
Nilima