Investing

Group RRSP vs SDRSP

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  • Feb 19th, 2018 2:09 pm
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[OP]
Deal Fanatic
Dec 28, 2006
6097 posts
629 upvotes
Kanata

Group RRSP vs SDRSP

For people have group RRSP at work, other than the portion the employers may match, do people put extra contribution inside the group RRSP or contribute it in a SDRSP (self directed RRSP) in bank?

The question I am asking because I'v only contribute to the minimum in group RRSP in Sun life and rest in SDRSP in TDI. However, since I am mostly do passive investing, I am now not sure if I should just put everything in the group RRSP plan.
The group RRSP plan we have can purchase mostly mutual funds offer by Sun Life and MER fees averaged around 1.2% or so. Even though if I go with a ETF to save some MER, I notice that most of the MF performance posted by the group plan seems to out perform the corresponding index in the last 10 years, it is not always the case, but average it seems to outperform the index by a bit. My belief is most active managed mutual funds does not out perform the index in long term, but the data posted seem to suggest otherwise.
I am now thinking of whether it is just easier to put everything in the group RRSP plan, I also get the benefit of using before tax money instead of waiting on tax time to get refund. Also, it is incredibly easy to re balance by setting a percentage of the funds.

Any opionion? A side question is that when mutual fund company post performance versus index, do they usually include the MER fees or just use the data before the fees?
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Aug 1, 2007
1425 posts
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rivet wrote: For people have group RRSP at work, other than the portion the employers may match, do people put extra contribution inside the group RRSP or contribute it in a SDRSP (self directed RRSP) in bank?

The question I am asking because I'v only contribute to the minimum in group RRSP in Sun life and rest in SDRSP in TDI. However, since I am mostly do passive investing, I am now not sure if I should just put everything in the group RRSP plan.
The group RRSP plan we have can purchase mostly mutual funds offer by Sun Life and MER fees averaged around 1.2% or so. Even though if I go with a ETF to save some MER, I notice that most of the MF performance posted by the group plan seems to out perform the corresponding index in the last 10 years, it is not always the case, but average it seems to outperform the index by a bit. My belief is most active managed mutual funds does not out perform the index in long term, but the data posted seem to suggest otherwise.
I am now thinking of whether it is just easier to put everything in the group RRSP plan, I also get the benefit of using before tax money instead of waiting on tax time to get refund. Also, it is incredibly easy to re balance by setting a percentage of the funds.

Any opionion? A side question is that when mutual fund company post performance versus index, do they usually include the MER fees or just use the data before the fees?
Contribute enough to the group plan to get the max match. Anything else can go to a separate self-directed account.

It's likely that they show the sunlife funds with returns before fees within the group plan, since the fees change and depend on how well they were negotiated. If you look around, you should be able to find both gross and net returns. Publicly available mutual funds, however, are mandated to report net-of-fees returns.

If you can post the funds and returns or link to them somehow, the board can pass along some more tips.

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