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Sask Pension: Upto $6600 annually of Credit Card spend on an RRSP Contribution (AMEX now Accepted)

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Sask Pension: Upto $6600 annually of Credit Card spend on an RRSP Contribution (AMEX now Accepted)

Update 16Jun2020 Currently SPP is closed off to new members outside Saskatchewan due to securities licensing with introduction of new product. Applications can be submitted but the account will not be opened until OSC approves the investment product. SPP will be opened up again to all Canadians once approval is received

Update 08Nov2020 Although the SPP's website specifically states Saskatchewan Residents only, a few friends of mine and a person have messaged me stating that their applications have been processed, from outside Saskatchewan. While their website specifically states no, you may be able to apply. Anyone interested can try submitting an application or contacting SPP 1 800-667-7153

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, Mastercard and now AMEX** to contribute into it and it is treated as a purchase. (**Their website and literature refers to VISA and Mastercard only. However, SPP has confirmed with me that AMEX is accepted, except for pre-authorized contributions.)

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
2019 Return 13.99%
(Cdn. Couch Potato ETF Balanced: 14.9%)
2019 MER 0.90%
5 year Return (end of 2019) 6.75%(annualized)

(Cdn. Couch Potato former ETF Balanced: 6.81%(annualized))

34year Historical Return 8.00%(annualized)

Portfolio Comparison
Sask Pension
1 year 13.99%
3 year 6.99%
5 year 6.75%

Mawer Balanced
1 year 15.0%
3 Year 8.0%
5 Year 7.5%

Tangerine Balanced (Former CCP)
1 Year 14.06%
3 Year 6.34%
5 Year 6.02%

CCP TD e-Series Balanced
1 Year 14.79%
3 Year 6.85%
5 Year 6.60%

Individual ETF Balanced(former CCP)
1 year 14.90%
3 year 6.95%
5 year 6.81%** (**NOTE: XAW didn't exist for the entire 2015, therefore the MSCI ex Canada return value was used)

Wealthsimple Balanced
1 Year 10.3%
3 Year 4.34%
5 Year 4.37%

Max Contribution 2020 $6300 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, fairly low cost investment you can contribute with a credit card (apparently you can with Investor's Group, but probably not worth it with their fees). 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.

Another benefit for those without a pension plan, you can take advantage of the pension tax credit from the CRA (thanks @Gursk !)
The CRA allows you to claim a $2000 Pension Tax Credit each year. Annuitizing the Sask Pension at exactly $2000 per year starting at age 55 allows you to maximize this tax credit. You can simply ask for this amount and have remaining funds transferred to a RRIF of your choice at your choice of bank or financial institution. This tax credit is worth upto $300.
https://www.advisor.ca/columnists_/fran ... ax-credit/

If you were to do this with an insurance company, the annuity costs are much higher than SPP.

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.

However, if you live in Saskatchewan, you have the option of Variable Benefit. This allows you to maintain your Sask Pension account investment and withdraw money similar to a RRIF. They are still waiting for approval from securities regulation in different provinces to approve the product.

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.?
AMEX can be used for one-time contributions, but not scheduled. 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 Dec 16th, 2020 2:57 pm, edited 38 times in total.
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Sask Pension Plan Upto $6600/yr in Credit Card spending on RRSP contributions
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Do they also offer a TFSA product ?

Any info on the transfer-out fees ?
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Flitox wrote: 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 $6600/yr in Credit Card spending on RRSP contributions
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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: 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 $6600/yr in Credit Card spending on RRSP contributions
http://forums.redflagdeals.com/sask-pen ... ns-2167222
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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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wra45mon wrote: 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 $6600/yr in Credit Card spending on RRSP contributions
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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: 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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titaniumtux wrote: +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 $6600/yr in Credit Card spending on RRSP contributions
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xgbsSS wrote: 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: 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.
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Sask Pension Plan Upto $6600/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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zcypher wrote: 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
+1

With the MBNA PP, if you have access to a generous CL, you shouldn't resort to an RRSP loan, meaning the Sask Pension is not all bad and shouldn't be overlooked just for not allowing RRSP loans.

The point I brought up is some of us get 2 or 3% cashback on pre-auth payments, so 3% on $6k is $180 back, and that $180 is considered a reward/gift/prize and therefore is not subject to income tax.
xgbsSS wrote: 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.
+1

No need to resort to an RRSP loan.
sonjeffnguyen wrote: 1% MER is horrible....
You mean the 1% on the Sask Pension? What do you suggest that has comparable return with a lower MER?
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At 0.87%, their MER is actually not that bad. The people buying these are probably not those who will put the time and effort into building out their own basket of super-low funds. So in that light, it's actually a competitive rate. It's cheaper than Tangerine.
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zcypher wrote: At 0.87%, their MER is actually not that bad. The people buying these are probably not those who will put the time and effort into building out their own basket of super-low funds. So in that light, it's actually a competitive rate. It's cheaper than Tangerine.
Plus the credit card rewards. Here in Iqaluit, Aeroplan miles helps to pay my roundtrip ticket from Ottawa to Iqaluit 15000miles ($2400 roundtrip). So for me, I am getting a big return on this.
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Sask Pension Plan Upto $6600/yr in Credit Card spending on RRSP contributions
http://forums.redflagdeals.com/sask-pen ... ns-2167222
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xgbsSS wrote: Plus the credit card rewards. Here in Iqaluit, Aeroplan miles helps to pay my roundtrip ticket from Ottawa to Iqaluit 15000miles ($2400 roundtrip). So for me, I am getting a big return on this.
I was reading online that aeroplan points redemption gives best value towards flights to the territories. Since you travel between Ottawa and Iqaluit, then it's a no-brainer.
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2017 End of year report

9.70% return which is fairly competitive considering the conservative nature of the investment. This is comparable to the Canadian Couch Potato Balanced Portfolio return....
1 year 5 year
SSP = 9.70% 9.42%
CCP balanced= 8.96% 9.64%
**Mind you, CCP will give you more flexibility, lower MER fees so better chances of outperforming in the long run. SSP is less flexible, doesn't give you any early withdrawal options. However, there are no transaction/trading fees, no brokerage account to worry about, no minimum balances and possible credit card rewards!

The MER came to 0.83% which is a good sign. Costs over the last 5 years have been trending down.
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Sask Pension Plan Upto $6600/yr in Credit Card spending on RRSP contributions
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