UBCP
Retirement Benefits Society
Investing in your Future
The UBCP Retirement Benefits Society
Retirement Savings Program
DIRECTORS
Trevor Jones Ken Kirzinger Rob Morton Terrance Leigh
David Jacox Lori Stewart Brad Loree
PLAN ADMINISTRATOR
Sarah E. King
LEGAL COUNSEL
Margaret H. Mason - Bull, Housser & Tupper LLP
CONSULTANT
William J. Watt - TRG BENEFITS AND PENSIONS
PLAN SPONSOR
The UBCP Retirement Benefits Society
SUITE 320—1155 WEST PENDER STREET
VANCOUVER, BC V6E 2P4
TELEPHONE: 604-689- 0727 EXT.2261
FAX: 604-685-1478
E-MAIL: sarah.king@ubcp.com
WEBSITE: www.mbt.ca
Plan Anniversary Date: January 1st of each year.
Policy Number - 37957
The information provided in this booklet is for informational purposes only. If there are any
discrepancies between this booklet and the Contract, the Contract will apply without
exception.
INTRODUCTION
Have you thought about what you would like to do once you retire? Spend more time with friendsand family? Travel? Devote more time to a favorite hobby? Have you thought about where the
money will come from?
While you may not be ready to plan your retirement calendar, it’s never too early to start securing
your financial future. With the right combination of commitment, good judgment and careful
planning, your dreams could come true. It is all about making informed choices, today and in the
coming years.
Fortunately, you are not alone. You, together with the UBCP Retirement Benefits Society Program
and the Government, share the responsibility of building your retirement income.
Most financial advisors agree that you will need 50 per cent to 70 per cent of your pre-retirement
income to continue your standard of living into retirement. If you take advantage of the UBCP
Retirement Benefits Society Program, it can help make this goal possible.
CONTENTS
- PLAN DESIGN
- HOW TO JOIN
- CONTRIBUTIONS
- IN-SERVICE WITHDRAWALS
- PLAN COSTS
- INVESTMENT FUND OPTIONS
- ANNUAL STATEMENTS
- GETTING INFORMATION
- ENROLLING IN THE PLAN
- GLOSSARY OF TERMS
- FREQUENTLY ASKED QUESTIONS
PLAN DESIGN
The Plan is administered by Group Retirement Services (GRS), the group retirement products and
services division of Great West Life, London Life and Canada Life. The Retirement Plan with GRS
consists of two parts, a Group Non-Registered Savings Plan (NRSP) and a Group Registered
Retirement Savings Plan (RRSP).
The Group NRSP serves as an entry point for your contributions (producer and member required)
into the plan. Contributions to this part of the Plan are not tax deductible and any earnings on these contributions are taxable to you.This portion of the Plan is simply a temporary depository for your contributions.
Once a year, when the Plan Administrator receives the information on your available RRSP
contribution room, these funds will be transferred to the Registered Plan.
The Group RRSP is a tax-deferred retirement plan. It allows you to make tax-deductible
contributions towards savings, within limits set by the Canada Revenue Agency (CRA), up to the
end of the year in which you turn 71.
Alternatively, you may request to have your funds (both Producer, and where applicable, Member) deposited directly to the Registered Plan each year by providing the UBCP Plan Administrator
with a letter or direction and authorization.
Your retirement income will come from the monies you have accumulated under both the
Registered
and Non-Registered Plans.
HOW TO JOIN
To enroll in the Retirement Plan, you need to complete application forms for both the Registered
and Non-Registered plans and submit the forms to the Plan Administrator.
You are also required to sign the Authorization Form to Obtain Proof of Available Contribution
Room from the Canada Revenue Agency and then return it to the Plan Administrator.
Note: All information regarding your Retirement Plan will be kept in strict confidence by the Plan Administrator.
CONTRIBUTIONS
By the Producers:
As a participant of this plan, there are restrictions on withdrawals of contributions made by
Producers on your behalf. These contributions will depend on the terms of your collective
agreement.
By the Members:
Member contributions, through payroll, or in a lump sum; and amounts transferred in from other
plans will go into a Voluntary Account in your name.
Required member contributions to the Plan are made through regular payroll deductions following
the terms of the collective agreement under which you are working.
Transfers-in from other RRSP’s are permitted. All RRSP funds transferred to the Group RRSP from
any financial institution are considered to be voluntary contributions.
The CRA sets the amount that each individual taxpayer can contribute to an RRSP each year. To
obtain your available contribution room, refer to the most recent Notice of Assessment sent to you
by the CRA. Transfers in from other plans do not affect the amount of contribution room available.
The Plan Administrator and Plan design will help prevent over-contributions and tax penalties by
only allowing contributions to be deposited into the RRSP when proof of available RRSP room has
been obtained.
Note: If you make any contributions to another plan, it is essential that you advise the Plan
Administrator in order to ensure you do not over-contribute.
IN - SERVICE WITHDRAWALS
Voluntary contributions made to the RRSP and the NRSP can be withdrawn at any time. Withholding
tax will be deducted from the amounts withdrawn from the RRSP.
It is important for you to clearly understand that withdrawing your retirement savings prematurely
will significantly reduce your chances of having an adequate income at retirement.
There are restrictions on withdrawals for members under the age of 50, on contributions that have
been made by Producers. These restrictions will ensure that the contributions made to the Plan and
the investment earnings on these contributions will be available for you at retirement. If you
terminate your membership, your funds are available for you to withdraw 60 days after termination.
Withdrawals from the contributions made by Producers are permitted in the following
circumstances:
- The Home Buyers’ Plan (HBP);
- The Lifelong Learning Plan (LLP);
- Financial Hardship Policy;
- Disability Policy;
- Resignation of Membership with UBCP; and
- Attainment of age 50.
Under 1 and 2 contributions must be deposited in your account for 90 days before they can be
withdrawn for these government programs. If they are withdrawn prior to 90 days you will be
subject to applicable withholding taxes.
NRSP Withdrawals:
- Financial Hardship Policy;
- Disability Policy;
- Resignation of Membership with UBCP; and
- Attainment of age 50.
Requests submitted to GRS for these programs are processed in 5-7 business days.
PLAN COSTS
The first withdrawal of contributions, in a calendar year, from either the NRSP or the RRSP is subject
to a $35 administration fee. Each subsequent withdrawal in that year is subject to a $50
administration fee.
Withdrawals from the RRSP for the Lifelong Learning and Home Buyers’ Plan are not subject to an administration fee.
Investment Management Fee (IMF’s) are outlined in the following section. Each fund offered by
GRS is also subject to a Fund Operating Expense (FOE). Refer to the Glossary for definitions.
INVESTMENT FUND OPTIONS
The investment options available under the Plan are as follows:
Non-Registered Plan
With the exception of minor UBCP members, all contributions to the Non-Registered Plan are
directed to a Daily Interest Account. These investments pay the investor a predetermined
guaranteed rate of interest on money invested for a fixed amount of time. It is a short-term
investment fund used to invest funds temporarily. It is not intended for long term investing.
Accounts (CIAs).
Registered Plan
Contributions to the Registered Plan can be directed to any of the investment options described
below:
This fund invests primarily in government securities and high quality corporate money market
instruments maturing within one year. It is short-term investment fund used to invest funds
temporarily. It is not intended for long-term investing.
The investment management fee and expense for this Fund is 0.030% per annum.
b) Group Retirement Services Portfolio FundsThere are 5 Continuum Funds to choose from.
(See “Continuum Funds” brochure in Enrolment
Package for more detailed information.)
The five Continuum Funds are listed (from lowest risk to highest risk) and their target asset mixes
are as follows:
- Conservative (75% fixed income and 25% equities)
- Moderate (60% fixed income and 40% equities)
- Balanced (40% fixed income and 60% equities)
- Advanced (20% fixed income and 80% equities)
- Aggressive (100% equities)
To determine which fund is appropriate for you, you need to complete the Investment Personality Questionnaire included in your Enrollment Package. Additional copies are available from the Plan Administrator.
The Investment Personality Questionnaire looks at the length of time that you are investing, your
current financial status and your expectations for future growth. It will also help you assess both
your willingness to take risks and your understanding of the consequences of your choices. Your responses will help you determine the Portfolio Fund tailored to best suit your personal investment objectives.
The investment management fee and expense for each of the Portfolio Funds is 1.297% to
1.298% per annum.
This fund invests in socially responsible equity funds and fixed income funds. The fund’s objective
is to achieve long-term capital appreciation through socially responsible investing with
conservative risk.
The investment management fee and expense for this fund is 1.787% per annum.
d) The Socially Responsible Canadian Equity FundThis fund invests in socially responsible companies that do not engage in the manufacture of
tobacco, alcohol, military, gaming, and pornography products. This fund invests in the Canadian companies that comprise the Jantzi Social Index.
The investment management fee and expense for this fund is 1.786% per annum.
e) The Socially Responsible Bond FundThis fund’s strategy uses a combination of interest rate appreciation, foreign exchange rate
anticipation and security selection while ensuring that the insuring corporations meet the
standards set for socially responsible investing.
The investment management fee and expense for this fund is 1.638% per annum.
f) The Socially Responsible Us Equities FundThis fund invests in socially responsible companies that do not engage in the manufacture of
tobacco, alcohol, military, gaming, and pornography products. This fund invests primarily in large capitalization US based companies.
The investment management fee and expense for this fund is 1.944% per annum.
g) 5 Year Compound Interest Accounts (CIAs)These investments pay a guaranteed rate of interest - specified on the date of your deposit.
Interest on each CIA compounds annually and the original interest rate applies to both the
principal and the reinvested interest. The rate will not change over the term, even if interest rates
change. Remember that if you cash out your account prematurely, you could be subject to a
market value adjustment.
Contributions in the Compound Interest Account will be credited with interest at a rate equal to
the GRS standard published rates plus 0.25%.
ANNUAL STATEMENTS
Members that have completed applications and are enrolled in the plan will receive annual
statements (December 31) by mail. These statements will provide you with your account balance,
current investment instructions, contribution information and personalized net rate of return on
your account.
Enrolled members are also able to print statements at any time by visiting the GRS web site at www.grsaccess.com.
GETTING INFORMATION
For information on any aspect of the Retirement Plan or for answers to questions that cannot be
dealt with by the GRS Customer Call Centre you can also contact the Plan Administrator at
604-689-0727 ext. 2261 or via email at sarah.king@ubcp.com.
You can also visit the GRS web site at www.grsaccess.com and obtain information on your
account at any time. You will also be able to view and make changes to your investment
instructions as well as update your contact information.
GRS ACCESS LINE is an automated voice response telephone line. This line gives you easy access
to your Retirement Plan information 24 hours a day, 7 days a week by calling 1-800-724-3402.
To speak directly with a Customer Service Specialist at the GRS Customer Call Centre, dial the
number above and press “0”. The hours are weekdays from 5:00AM to 5:00PM PST. If you
call after hours your call will be returned the next business day.
RECEIVING ACCESS TO THESE SERVICES
For security purposes, you will be mailed a LOGON ID letter and then a few days later, a second
letter containing your password. With these two pieces of information, you can access both the
GRS web site and Access Line.
ENROLLING IN THE PLAN
Your Enrollment Package contains the following material:
- Information Booklet for the new Plan
- Frequently Asked Questions
- Glossary of Terms
- Investment Personality Questionnaire
- Continuum Funds Brochure and Fund Details Sheets
- Current gross annualized rates of return for the investment funds
- Application forms for both the Registered and Non-Registered Plans
- Authorization Form to Obtain Proof of Available Contribution Room from the CRA
- Return Envelope
Remember, long-term financial planning for retirement is important to you and your family.
We encourage you to take advantage of the Union of BC Performers Retirement Plan to help
you achieve your retirement goals.
GLOSSARY OF TERMS
Default Fund - This is a fund to which any contributions to the Registered Plan will be investedif Group Retirement Services receives no other investment instructions from a member. The
default fund for this Plan is the Moderate Continuum Fund.
Ethical Fund - This kind of fund invests primarily in the shares of publicly traded companies
(both Canadian and international) that conduct their business operations in a socially
responsible manner. In addition to their social values, these funds are still managed with the
hopes of creating the prospect of good long-term growth.
Fiduciary Responsibility - Arises when the relationship between two parties implies that a
necessary element of the relationship is one of confidence and trust on the one part and a high
degree of good faith on the other. A fiduciary must act in “scrupulous goo d faith and candor”.
Fund Operating Expense (FOE) - These fees are charged directly to the fund to cover costs
including audit and custodial fees, fund transaction costs, taxes paid by the fund, bank fees, fund
valuation and reporting. The total amount of the fund operating expense is calculated at the end
of each year. This fee does not include GST which is charged separately.
0.073%, depending on the fund.
Group RRSP - A group retirement plan, through which the bundling of administrative services
and investments, offer individuals the opportunity to save on a group basis with significantly
lower fees and often far better contractual term than would be available to an individual investor.
Guaranteed Investment Fund (GIF) - These investment vehicles pay you a predetermined rate
of interest on money invested for a five-year term. The rate is guaranteed and is determined at
the time of purchase by market conditions. The rate will not change over time, even if rates change.
Investment Management Fees (IMF) - Represent fees paid to the investment manager for their professional services including the daily management of the fund. It also includes the fee to Group Retirement Services for the cost of administering the plan and providing services such as service
personnel, statements, web sites, and call centre support. IMFs are based on the asset value of
each fund and are paid directly from the fund each day.
Money Market Fund - These funds invest primarily in short-term government securities and high
quality corporate money market investment instruments that mature within one year. It is a
vshort—term investment tool used to invest money temporarily, and is not intended for long-term investing.
Non-Registered Retirement Savings Plan (NRSP) - Provides an easy way to accumulate savings. However, contributions to this part of the plan are not tax deductible and any earnings on these contributions are taxable to you.
Registered Retirement Savings Plan (RRSP) - Is a tax-sheltered plan that allows Members to
make tax-deductible contributions towards savings - within the limits set by the Canada Revenue
Agency (CRA) - up to the end of the year in which the member turns 71.
Restricted Withdrawals - As a condition of participation in the Plan, there are restrictions on the withdrawals of all Producer contributions made on your behalf. For example, funds cannot be
withdrawn until you become 50 years of age or your membership with UBCP terminates.
FREQUENTLY ASKED QUESTIONS
Q: I understand the UBCP RBS Retirement Plan consists of two parts?A: Yes, the Retirement Plan consists of two parts, a Group Non-Registered Retirement Savings Plan
and a Group Registered Retirement Savings Plan.
The Non-Registered Savings Plan (NRSP) serves as an entry point for your contributions (producer
and member) into the Plan. Contributions to this plan are not tax deductible and any earnings on
these contributions are taxable to you. This portion of the Plan is simply a temporary depository
for your contributions.
The Group Retirement Savings Plan (RRSP) is a tax-deferred retirement plan. It allows you to make
tax-deductible contributions towards savings, within limits set by the Canada Revenue Agency
(CRA), up to the end of the year in which you turn 71.
Q: What is the difference between a Group RRSP and an individual RRSP?
A: An employer or organization can sponsor a Group RRSP that offers you specific benefits that
otherwise would be unavailable to you under an individual plan. Some of these benefits include:
Access to a wide variety of institutional investment funds which are normally unavailable to
individual investors.
A substantial reduction in fees you will pay. The average equity mutual fund in Canada has a
Management Expense Ratio (MER) of 2.51%*. Currently, the highest Investment Management Fee
charged under the Retirement Plan is 1.97% (See IMF definition in the Glossary for more
information).
*Taken from the Globe and Mail Newspaper July 19, 2001
Q: What exactly is the Investment Management Fee (IMF)?
A: The IMF, like the MER, is the most important fee for you to understand in assessing your different retirement plan investments under the UBCP Retirement Benefits Society Retirement Plan.
IMFs represent fees paid to the investment manager for their professional services including the
daily management of each fund. It also includes the fee to GRS for the cost of administering the Plan
and providing services such as service personnel, statements, web sites and call centre support.
IMFs are based on the asset value of each fund and are paid directly from the fund each day. The
IMFs are unique to this Plan and do not include GST, which is also charged.
FOEs are fees charged directly to the fund to cover costs including audit and custodial fees, fund transaction costs, taxes paid by the fund, bank fees, fund valuation and reporting. Charged as they
occur, the total amount of fund operating expense is calculated at the end of each year. Therefore,
the amount GRS reports to you will usually be the previous year end charges calculated as a
percentage of the fund. This does not include GST, which is also charged.
Q: Why are lower fees so important?
A: Lower fees will allow your retirement savings to grow faster. For example, let us consider two
identical funds, except Fund A has a 1.2% fee and Fund B has a 2.5% fee.
If you invested $10,000 at age 30 with no further deposits in each of these funds (with interest compounded annually) and obtained an average rate of return before fees of 6%, the difference
in the capital accumulated under each fund at age 65 is dramatic.
Fund A has a net rate of return of 4.8% per year (6% gross return minus 1.2% fees). Fund B has a net
return of 3.5% (6% gross return minus 2.5% fees).
Assuming identical $10,000 investments, at age 65, if you invested in Fund A (lower fees) you will
save $51,599, however if you invested in Fund B (higher fees) you will only save $33,336. The
lower fees of Fund A provide $18,263 (or 55%) more in overall savings.
Q: Why is 6% consistently used as the average rate or return on investments in all the Q & A examples?
A: Savings for your retirement is a long-term process. We believe it is better to use conservative
estimates to project a return on investment. Your willingness to take risks and the growth of future markets means you may earn more. However, given the volatility of the economy, you may earn
less; therefore we feel 6% is a reasonable expectation.
Q: How did the UBCP Retirement Benefits Society obtain such low fees?
A: The collective bargaining power of the members’ money enabled the UBCP Retirement Benefits
Society to negotiate the lower fees with GRS.
Q: What are my investment choices under the NRSP?
A: With the exception of minor members, there is only one choice under the Non-Registered Plan
- the Money Market Fund. This fund is set up as a temporary depository in which to accumulate contributions to the Retirement Plan until you can provide the Plan Administrator with proof of
available room in your RRSP.
Contributions made to the Plan by minor members are invested in 5 year Compound Interest
Accounts (CIAs).
Q: Why is the Money Market Fund used?
A: Until you provide the Plan Administrator with your eligible RRSP contribution room, the
objective of the Non-Registered account is to ensure the contributions do not depreciate in value.
In fact, these contributions will grow while they are held in the Non-Registered part of the Plan
awaiting transfer.
Q: What are my investment choices under the Registered part of the Retirement Plan?
A: The five Continuum funds listed (from lowest risk to highest risk) and their target asset mixes
are as follows:
- Conservative (75% fixed income and 25% equities)
- Moderate (60% fixed income and 40% equities)
- Balanced (40% fixed income and 60% equities)
- Advanced (20% fixed income and 80% equities)
- Aggressive (100% equities)
A Money Market Fund, a Socially Responsible Balanced Fund, and a 5-year Guaranteed Investment
Fund are also included under the UBCP Retirement Society Retirement Plan.
These investments represent a broad range of diversified choices that best fits the needs of the membership according to their age, risk tolerance and their personal retirement savings goals.
Q: Why did the UBCP Retirement Benefits Society make these particular investment
selections for the Registered part of the plan?
A: The UBCP Retirement Benefits Society, as the sponsor of this Group Retirement Savings Plan,
carries a fiduciary responsibility to consistently monitor the performance of the funds that its
members invest in. In an effort to make this monitoring feasible, the UBCP Retirement Benefits
Society needed to stipulate the number of fund choices in which its members invest.
Q: How does the plan work so that I do not make excess RRSP contributions?
A: You are required to sign and return the Authorization Form to Obtain Proof of Available
Contribution Room from Canada Revenue Agency to the Plan Administrator. The information
received from the CRA will ensure that each participating member has available RRSP contribution
room.
Q: Am I able to transfer in funds from my other RRSPs to benefit from the lower fees?
A: Yes, you can. You will receive information on how to do that in your UBCP Retirement Society
Retirement Plan Information Booklet and Enrollment Package.
Q: Can GRS track which of my contributions are my own and those that are transfers from
other plans?
A: Yes, the GRS system is able to track Employer and Member contributions, including transfers
into the plan.
Q: I understand that there are restrictions on the withdrawal of the Employer Contributions.
What are the ways I can withdraw these funds?
A: You can withdraw your Employer contributions from the Retirement Plan to take advantage of
the following government Plans:
- The Home Buyers’ Plan (HBP)
- The Lifelong Learning Plan (LLP)
You can also withdraw these funds if you meet the following criteria:
- Terminate membership with UBCP; or
- When you turn age 50; or
- Financial Hardship Policy; or
- Disability Policy
Q: I am 30 years old and earning $30,000 a year. My contributions average about $125 per
month or $1,500 per year. Will this make a difference in the amount I will accumulate by
the time I retire at age 65?
A: Yes, it most certainly will. By saving $125 at the end of every month over the next 35 years and
assuming you can earn 6% per year on your investment, you will have accumulated $171,700 in you Registered Account by age 65.
Q: I feel like I can only save an extra $50 per month for retirement; is it worth it?
A: Absolutely. If you voluntarily contribute an extra $50 at the end of every month, or $600 per
year (in addition to the Employer contributions) and earn 6% per year on these monies you will
accumulate an additional $65,680 in you Member Account by age 65. By doing this you will
accumulate a total of $240,380 in retirement savings by age 65!
Q: How does the UBCP Retirement Benefits Society protect the privacy of my financial
information?
A: The UBCP Retirement Benefits Society has taken all reasonable precautions to protect your
privacy under its Retirement Plan.
Q: How can I obtain information about the UBCP Retirement Benefits Society Retirement
Plan?
A: There are several ways you can find out about your account under the Plan:
- Contact the UBCP RBS Plan Administrator directly at 604-689-0727 ext. 2261.
- Call the GRS Access Line. This is an automated voice response telephone line which gives
you easy access to your Retirement Plan information 24 hours a day, 7 days a week by calling
1-800-724-3402. To speak directly with a Customer Service Specialist at the GRS Customer
Call Centre, call the number above and press”0”. The hours are weekdays from5:00 A.M. to
5:00P.M.
PST. If you call after hours your call will be returned the next business day. - Visit the GRS web site at www.grsaccess.com.
A: Yes. For security purposes, you will be mailed a LOGON ID, and then a few days later, a second
letter containing your password. With these two pieces of information, you can access both the
GRS web site and GRS Access Line.