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Sask Pension: Upto $6200 annually of Credit Card spend on an RRSP Contribution (All Canadians)

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  • Jun 21st, 2019 12:40 pm
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Sask Pension: Upto $6200 annually of Credit Card spend on an RRSP Contribution (All Canadians)

This is not the most well-known investment product, however I believe people that require minimum spends and are planning to invest money in RRSPs can really benefit from this program.

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.

https://www.saskpension.com/index.php
http://forums.redflagdeals.com/saskatch ... an-985264/

2018 Stats
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)

Portfolio Comparison
Saskatchewan Pension
1 year -2.05%
3 year 4.96%
5 year 5.82%
10 year 7.35%

WealthSimple Balanced
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

Mawer Balanced
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.
Last edited by xgbsSS on Sep 12th, 2019 12:36 am, edited 22 times in total.
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Sask Pension Plan Upto $6200/yr in Credit Card spending on RRSP contributions
http://forums.redflagdeals.com/sask-pen ... ns-2167222
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Do they also offer a TFSA product ?

Any info on the transfer-out fees ?
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[OP]
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Flitox wrote:
Jan 29th, 2018 2:57 pm
Do they also offer a TFSA product ?

Any info on the transfer-out fees ?
No TFSA unfortunately.

This is a locked retirement product, so no transfer outs allowed
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Sask Pension Plan Upto $6200/yr in Credit Card spending on RRSP contributions
http://forums.redflagdeals.com/sask-pen ... ns-2167222
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Nov 24, 2013
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Don't know where you get $6,000 annual spend. Max SPP contribution is $2500/yr/person. So $5,000/couple. You can transfer-in $10,000/year of RRSPs, but that doesn't work for Visa/MC spend.

[Edit]Huh... they just increased it. Nevermind. $6,000/yr/person it is.
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Mike15 wrote:
Jan 29th, 2018 3:48 pm
Don't know where you get $6,000 annual spend. Max SPP contribution is $2500/yr/person. So $5,000/couple. You can transfer-in $10,000/year of RRSPs, but that doesn't work for Visa/MC spend.

[Edit]Huh... they just increased it. Nevermind. $6,000/yr/person it is.
Yeah, they just announced it today. I have always put in $2500 a year to get valuable points/miles. I don't know if I want to go up to $6000, but we'll see!
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Sask Pension Plan Upto $6200/yr in Credit Card spending on RRSP contributions
http://forums.redflagdeals.com/sask-pen ... ns-2167222
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Oct 22, 2015
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The OP indicates
You can start transferring or drawing from it once it is converted into an RRIF and only at this time.

So can't you convert to an RRIF
then transfer to your own account
Then convert back to rrsp?

It's a lot of steps but technically possible?
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Another bonus with SPP is the increased creditor protection vs. RRSP. Big bonus for small business/self-employed people.
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[OP]
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wra45mon wrote:
Jan 29th, 2018 7:58 pm
The OP indicates
You can start transferring or drawing from it once it is converted into an RRIF and only at this time.

So can't you convert to an RRIF
then transfer to your own account
Then convert back to rrsp?

It's a lot of steps but technically possible?
Unfortunately no. SPP doesnt actually support accounts as RRIFs, but rather allows you to transfer to one at any institution starting at age 55.

In this way, they reduce costs over the long term. The credit card option costs them quite a bit but attracts investors, so they've decided to make funds loxked to reduce costs.
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Sask Pension Plan Upto $6200/yr in Credit Card spending on RRSP contributions
http://forums.redflagdeals.com/sask-pen ... ns-2167222
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Jan 4, 2017
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Able to fund by cc and available to all Canadians? That's actually pretty cool! I had no idea this existed, thanks for posting.
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zcypher wrote:
Jan 30th, 2018 5:38 am
Able to fund by cc and available to all Canadians? That's actually pretty cool! I had no idea this existed, thanks for posting.
+1

Question about CC payments for contribution...can they be setup as pre-auth payments? Some cards leverage higher CB on PAP.
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[OP]
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titaniumtux wrote:
Jan 30th, 2018 9:22 am
+1

Question about CC payments for contribution...can they be setup as pre-auth payments? Some cards leverage higher CB on PAP.
Yes you can. You can make PAC contributions on the 1st and 15th of each month using pre-authorized debit or credit card. I personally do not use it, so cannot tell you how it works, but I do know when you sign up, they provide a form and it has credit card as an option.

Also listed on their FAQ
https://www.saskpension.com/faq.php#payments
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Sask Pension Plan Upto $6200/yr in Credit Card spending on RRSP contributions
http://forums.redflagdeals.com/sask-pen ... ns-2167222
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Jan 4, 2017
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xgbsSS wrote:
Jan 30th, 2018 9:59 am
Yes you can. You can make PAC contributions on the 1st and 15th of each month using pre-authorized debit or credit card. I personally do not use it, so cannot tell you how it works, but I do know when you sign up, they provide a form and it has credit card as an option.

Also listed on their FAQ
https://www.saskpension.com/faq.php#payments
That's awesome. So does this not make RRSP loans irrelevant if you can leverage cc cashback + switch it to say 0%-12mo mbna after? Not saying that's necessarily a great idea or anything but for anyone that is considering paying 2% for an RRSP loan, maybe? Am I missing something? lol
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zcypher wrote:
Jan 30th, 2018 5:09 pm
That's awesome. So does this not make RRSP loans irrelevant if you can leverage cc cashback + switch it to say 0%-12mo mbna after? Not saying that's necessarily a great idea or anything but for anyone that is considering paying 2% for an RRSP loan, maybe? Am I missing something? lol
Yeah pretty much. Although some credit card transfers allow you to transfer directly to your bank account (eg. RBC).
If you were planning to use an RRSP loan, that would be a decent alternative if you can muster it.
Support your local Credit Union!

Sask Pension Plan Upto $6200/yr in Credit Card spending on RRSP contributions
http://forums.redflagdeals.com/sask-pen ... ns-2167222
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Thanks for sharing - I never knew it existed.

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