Sask Pension: Upto $6200 annually of Credit Card spend on an RRSP Contribution (All Canadians)
Saskatchewan Pension Plan is a RRSP program based in Saskatchewan that is available to all Canadians with RRSP contribution room. It has a lowish MER of around 1% and has had a 31year average of around 8% return annually. It is a balanced fund and can be converted into an RRIF-annuity or be transferred to your RRIF at any other bank later on.
The great attraction is that you can use your VISA or Mastercard to contribute into it and it is treated as a purchase.
There are some drawbacks. This is not the lowest MER fee investment out there. You can definitely save on your fees with ETFs, etc. Your money is also locked-in until retirement. This means you cannot use the RRSP balance toward Life-long Learning Plan (LLP) or the Home Buyer's Plan (HBP). No transfer outs either. You can start transferring or drawing from it once it is converted into an RRIF (starting at age 55) and only at this time.
That being said if you are someone that cannot be bothered to do ETFs on your own, and are planning to sock money away for the future, it isn't a bad plan at all. The credit card spend is nice to boot.
Personally, I only do a small portion of my RRSP to SSP and do my own stocks. However, for anyone that can't be bothered, this is not a bad option.
http://forums.redflagdeals.com/saskatch ... an-985264/
2018 Return -2.05%
(Cdn. Couch Potato ETF Balanced: -2.01%)
2017 MER 0.89%
5 year Return (end of 2018) 5.82%(annualized)
10 year Return(end of 2018) 7.35%
(Cdn. Couch Potato TD Balanced: 5.88%& 7.34%(annualized))
**note: I don't have a calculation for ETF due to the CCP website not updating their model portfolio page. TD was calculated based on Morningstar data.
33year Historical Return 8.00%(annualized)
1 year -2.05%
3 year 4.96%
5 year 5.82%
10 year 7.35%
1 year -2.30%
3 year 3.25%
5 year N/A
WealthSimple Balanced SRI
1 year -2.20%%
3 year 3.29%
5 year N/A
CCP Tangerine Balanced
1 year -2.16%
3 year 3.43%
5 year 5.33%
10 year 6.58%
CCP TD e-Series Balanced
1 year -2.14%
3 year 3.88%
5 year 5.88%
10 year 7.34%
CCP ETF Balanced
1 year -2.01%
3 year 4.47%
5 year N/A
1 year -0.30%
3 year 4.20%
5 year 7.00%
10 year 9.50%
Max Contribution 2019 $6200 or RRSP Contribution Limit (whichever is lower)
Frequently Asked Questions
Why invest with Saskatchewan Pension Plan?
It is a great and flexible RRSP investment that is safe, flexible, low cost and can earn you tremendous credit card rewards. This is the only RRSP known where a credit card can be used to make contributions. You can invest as little as 1 cent. All Canadians can join, you do not have to live in Saskatchewan! For those who also want a stable annuity/pension payment upon retirement, SPP provides competitive rates and pension payments that are guaranteed by the Government of Saskatchewan.
Can I withdraw early, transfer-out early, turn it into an RRIF at SPP and start withdrawing?
No. This is one thing to keep in mind before investing. SPP does not allow for withdraws even for the Home Buyer's Plan or Life-Long Learning Plan. SPP also does not have RRIF accounts. How this works is by transferring your funds into a RRIF at another institution which you can only start doing at the age of 59. Or you can opt for a pension through their annuity program.
I already have a pension. How will this benefit me?
While you can get your money as a pension later in life, you have the ability to transfer your invested funds at retirement to any bank or investment account RRIF of your choosing. The SPP investment returns are fairly competitive.
Aren't credit card contributions treated as cash advances?
Not in this case! So rest assured, your contribution is treated as a purchase!
Can I use Amex, Union Pay, Discover etc.?
No, only VISA and Mastercard can be used. And who accepts Discover card anyway? :P
Does Saskatchewan Pension Plan Pre-Authorized Contributions count toward reoccurring bill payment bonuses on credit cards?
-Unfortunately by the looks of it, no (Tangerine Mastercard anyway) (thanks @jevonb )
(**if anyone has a credit card with this bonus and starts an automated contribution plan, please post your experience for data points)
There are cheaper investments out there. Why SPP?
Although the MER is higher than say ETFs, the investment return has been very competitive and in some cases have beat some of the Canadian Couch Potato returns. Once you factor in credit card rewards, you are earning much more. Additionally, there are no fees involved other than the MER while many options such as ETFs require an investor to pay commission fees and in some cases management fees.
So is this the best investment out there?
NO. There is no single best investment plan out there. SPP is one of many investment options available. SPP has limitations such as it is only available as a balanced fund or short term fund. This may not be appropriate to your risk tolerance. Additionally, there are no early withdrawals. For those that need to save for retirement and are not well disciplined, this may be a good thing though! This might not be great for investors who may need early access to their money. It is important to look at your overall financial situation before deciding to invest. SPP however is a solid, no-frills option that may complement your investment portfolio. For those that need further direction, seeking advice from a financial adviser may be appropriate. RFD Investing Forum is a great community resource for those who would like to learn and DIY their investments.
Sask Pension Plan Upto $6200/yr in Credit Card spending on RRSP contributions
http://forums.redflagdeals.com/sask-pen ... ns-2167222