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Need to choose my own stock portfolio for my pension - Please help

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  • Jun 3rd, 2014 1:08 pm
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Newbie
May 10, 2007
3 posts
Calgary

Need to choose my own stock portfolio for my pension - Please help

I need to choose a set of funds in which I can allocate my pension contributions. Can you guys please give me some suggestions on which ones and at what percentage I should choose? I am 29.

BlackRock LifePath Index 2015 Segregated Fund (QNR)
BlackRock LifePath Index 2020 Segregated Fund (QND)
BlackRock LifePath Index 2025 Segregated Fund (QNS)
BlackRock LifePath Index 2030 Segregated Fund (QNE)
BlackRock LifePath Index 2035 Segregated Fund (QNT)
BlackRock LifePath Index 2040 Segregated Fund (QNF)
BlackRock LifePath Index 2045 Segregated Fund (QOP)
BlackRock LifePath Index 2050 Segregated Fund (QSZ)
BlackRock LifePath Index Retirement Segregated Fund 1 (QNB)

SLA 5 Year Guaranteed Fund (060)
Sunlife Financial Money Market Segregated Fund (X21)
BlackRock Universe Bond Index Segregated Fund (W02)
Beutel Goodman Balanced Segregated Fund (U07)
Beutel Goodman Small Cap Segregated Fund (U51)
BlackRock Active Canadian Equity Segregated Fund (W75)
BlackRock S&P/TSX Composite Index Segregated Fund (W35)
AECOM Common Shares Fund (A4C)
BlackRock EAFE Equity Index Segregated Fund (W45)
BlackRock U.S. Equity Index Seg. Fund (Non-Reg Only W44) (Registered Only X90)
MFS McLean Budden Global Equity Segregated Fund (QOM)
MFS McLean Budden International Equity Segregated Fund (QON)

Thanks for your help in advance!!
11 replies
Deal Fanatic
Jul 1, 2007
8569 posts
1763 upvotes
With the little information you provide I'd say use the Lifepath 2050 if you plan on retiring at 65.
Money Smarts Blog wrote: I agree with the previous posters, especially Thalo. {And} Thalo's advice is spot on.
Deal Addict
Jul 21, 2011
1731 posts
227 upvotes
RMB
29 yrs old should have lots of risk tolerance, I will go with 33% Tsx, 33% us index and 33% EAFE. Look like they are all seg funds which mean you can't lose your principle, also seg fund usually has a higher mer, I will go all high risk.
Newbie
May 10, 2007
3 posts
Calgary
Thalo : Thanks for the advice...it would be nice to retire at 65.

Zilber: Thanks for the advice...what do you mean I can't lose my principle? what does "mer" stand for. Im kinda iffy on going all out on high risk lol.
Deal Fanatic
User avatar
Sep 13, 2003
9923 posts
1665 upvotes
xerooption wrote: Thalo : Thanks for the advice...it would be nice to retire at 65.

Zilber: Thanks for the advice...what do you mean I can't lose my principle? what does "mer" stand for. Im kinda iffy on going all out on high risk lol.
MER is the management that they take from your funds.

Can't lose your principle, so basically you will get your money at the end. Just might not get any interest if, for example, the markets collapse. At least you get your money that you put in back.
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Sr. Member
Oct 14, 2012
954 posts
728 upvotes
Woodstock
This is the first time I've ever heard that work pension segregated funds (not insurance company personally purchased segregated funds) have a guarantee that you will get at least your principal back. Can someone direct me to a reference that states this?

I've never seen it mentioned in any of our work pension information. I thought in the case of our work pension the only thing "segregated" about our funds was that SunLife/ManuLife/Morneau treated all of the money from Big Company A as one group and kept it separate (therefore segregated) from all of the money they were managing for Medium Company B.

Work Company Pension segregated funds also often have very low MERs which again is quite different from personally purchased insurance company segregated funds.

Can someone point me to more information on a "guarantee" of getting your contributions back for these group pension plan seg funds?
Deal Addict
Jul 21, 2011
1731 posts
227 upvotes
RMB
BetCrooks wrote: T
Can someone point me to more information on a "guarantee" of getting your contributions back for these group pension plan seg funds?
I think it is a "guarantee" only if you retire with the company that give you the pension. However if you have a career change and move onto a different company or being lay off, the segregated part is no longer applicable and they will move your equity to a non segregated fund.
Deal Addict
Feb 5, 2010
2764 posts
183 upvotes
Are we able to buy the "BlackRock LifePath Index 2050 Segregated Fund" through a discount broker like Questrade or RBC Direct Investing etc.?
Deal Addict
User avatar
Mar 19, 2010
2054 posts
283 upvotes
Onterrible
xerooption wrote: Thalo : Thanks for the advice...it would be nice to retire at 65.

Zilber: Thanks for the advice...what do you mean I can't lose my principle? what does "mer" stand for. Im kinda iffy on going all out on high risk lol.
MER is a fee that you have to pay every year to maintain the investment.
Say you invest $100 and the MER is 1%, you will pay a MER fee of $1 for the year.
The MER is charged every year, it is not a one time fee as many people think. Something to keep in mind.
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Newbie
May 10, 2007
3 posts
Calgary
Zilber: so you are basicly saying that: you(whoever) are screwed, if you decide to leave or get laid off...which in today's world is very likely (leaving the company in the future) and getting laid off is a possibility. Please confirm.
Deal Addict
Jul 21, 2011
1731 posts
227 upvotes
RMB
xerooption wrote: Zilber: so you are basicly saying that: you(whoever) are screwed, if you decide to leave or get laid off...which in today's world is very likely (leaving the company in the future) and getting laid off is a possibility. Please confirm.
My guess is you are with sunlife, I think you should direct your questions to them.
Sr. Member
Oct 14, 2012
954 posts
728 upvotes
Woodstock
OP,
There's nothing wrong with a DC pension plan. Most of us (who have any pension plan) have them. I just would be cautious about assuming you are "guaranteed" anything. The way our DC pensions work, if we get fired or quit, we get the value of our pension plan on that day as a Locked In Retirement Account. So we choose to invest our DC pensions in a balanced way, some stocks, some bonds (because there are no guaranteed investment funds available in our plan). That way, we have managed to keep our DCs steadily climbing (in addition to our contributions) because in the years the markets go up, our equities go up, and in the years the markets crash, so far our bonds have helped cushion the fall.

If one of my kids was old enough to work, I'd recommend they invest in a balanced way, not in an overly aggressive way. It might not be the fastest way to riches but it is less likely to result in a catastrophic loss.

It is worth asking for the brochures from work about how your pension plan works. It probably tells you what value you get if you are fired or laid off. In almost every plan I've seen, you get the full value of *your* contributions and your investment gains. For some plans, you also get your employer's contributions and gains right away; for others you have to have worked 3 months-2 years to get your employer's contributions/gains. The length of the wait to get to keep the employer's portion is the "vesting period." So if it says the funds vest immediately, you would get everything in your plan the day your job ended.

The brochures should also tell you how long you have to wait before switching from fund to fund without any penalty. It's often 90 days/3 months. So if you decided to put everything, for example, into the lifepath 2045, you could change your mind after an interval (usually 3 months) and transfer the money into another fund then. As someone mentioned up thread, you could always direct everything into a money market fund and then research with your friends and colleagues what the best plan is, and gradually shift your money into your long term plan. I personally would park it in a lifepath instead, because then if you get distracted and don't make any changes for a year or two it should have been earning you some gains while it waits.

It looks like your plan has some good choices available, so it should all work well.

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