Saskatchewan Pension Plan: Credit Card spend on RRSP Contributions (All Canadians) (Contribute as much as you like!))
Update 21January2023 Returns for 2023 are posted. See below or most recent posts.
Update 24October2023 The variable benefit is now available. This means you can keep your investments at Saskatchewan Pension Plan after you retire and do not require to convert to a pension or transfer out if you would rather stay with the SPP! More options!
**unlocked RRSP funds only
Website: https://www.saskpension.com/
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 36year average of around 7.73% return annually. It is a balanced fund and can be converted into an RRIF-annuity, transferred to your RRIF at any other bank later on, or you can choose the variable benefit allowing you to stay invested and withdraw as you see fit!
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.). This can be done with pre-authorized payments or one-time contributions on their website. You can also contribute from your bank account as well as transfer-in unlocked RRSP funds from other institutions.
^VISA Debit excluded
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
saskatchewan-pension-plan-985264/
2023 Stats
2023 Return 7.80%
(Cdn. Couch iShares Core Balanced ETF: 12.78%)
2022 MER 0.85%
2021 MER 0.92%
5 year Return (end of 2023) 7.41%(annualized)
(Cdn. Couch iShares Core Balanced ETF: 7.24%(annualized))
38year Historical Return(end of 2023) 7.73%(annualized)
Balanced Investment As of Dec 31, 2023 Comparison
** Note: TD e-Series for some reason has different numbers on their Fund Fact Sheet versus their webpage. For example TD e-Series 2022 return shows -14.50% while their fund fact sheet -20.1%. I have asked for clarification, but haven't received a response.
CIBC website not updated for 2023, used Morningstar instead.
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. 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?
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.
What is the variable benefit?
The variable benefit was originally only allowed for Saskatchewan residents but now available to all members. This allows you to maintain your Sask Pension account investment and withdraw money similar to a RRIF. This is great if you would rather keep your investment with SPP!
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 keep your money invested with SPP as the variable benefit. SPP Balanced Fund is quite competitive for it's asset class. The SPP investment returns are fairly competitive. Additionally, you also could transfer out after retirement to an RRIF of your choosing.
Aren't credit card contributions treated as cash advances?
Not in this case! So rest assured, your contribution is treated as a purchase!
Do contributions count toward minimum spend requirements (MSRs)?
Yes, it is treated as a purchase so it counts.
Does Saskatchewan Pension Plan Pre-Authorized Contributions count toward reoccurring bill payment bonuses on credit cards?
YMMV. It seems it depends on the issuer. Please post if you can provide a data point.
(Tangerine Mastercard, No) (thanks @jevonb )
(TD Cashback, Yes BUT TD Rewards, No)(Thanks @latebuyer)
(BMO, Yes)(Thanks @hk1989 )
(Scotia, Yes)(Thanks @guilleiguaran
(**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 equivalent Canadian Couch Potato portfolio returns. Once you factor in credit card rewards, you could be 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. That being said, one should consider the type of investment this is.
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 is a 60% equity, 40% fixed income investment. This may not be appropriate to your risk tolerance nor for your growth requirements. 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 starting DIY investments.
Update 24October2023 The variable benefit is now available. This means you can keep your investments at Saskatchewan Pension Plan after you retire and do not require to convert to a pension or transfer out if you would rather stay with the SPP! More options!
**unlocked RRSP funds only
Website: https://www.saskpension.com/
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 36year average of around 7.73% return annually. It is a balanced fund and can be converted into an RRIF-annuity, transferred to your RRIF at any other bank later on, or you can choose the variable benefit allowing you to stay invested and withdraw as you see fit!
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.). This can be done with pre-authorized payments or one-time contributions on their website. You can also contribute from your bank account as well as transfer-in unlocked RRSP funds from other institutions.
^VISA Debit excluded
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
saskatchewan-pension-plan-985264/
2023 Stats
2023 Return 7.80%
(Cdn. Couch iShares Core Balanced ETF: 12.78%)
2022 MER 0.85%
2021 MER 0.92%
5 year Return (end of 2023) 7.41%(annualized)
(Cdn. Couch iShares Core Balanced ETF: 7.24%(annualized))
38year Historical Return(end of 2023) 7.73%(annualized)
Balanced Investment As of Dec 31, 2023 Comparison
Code: Select all
Fund Name 1 year 3 year 5 year 10 year
Saskatchewan Pension 7.80% 4.87% 7.41% 6.61%
WealthSimple Balanced 11.40% 1.10% 4.90% N/A
WealthSimple Balanced SRI 10.3% 0.50% 4.50% N/A
(frmr)CCP Tangerine Balanced 11.55% 3.36% 6.49% 5.91%
(frmr)CCP TD e-Series Balanced 12.35% 3.95% 7.41% 6.78%
(frmr)CCP ETF Balanced 12.2% 3.64% 6.98% N/A
iShares Balanced (XBAL) 12.78% 3.66% 7.24% 5.52%
Vanguard Balanced (VBAL) 12.49% 3.21% 6.85% N/A
BMO Balanced (ZBAL) 12.48% 3.38% N/A N/A
Mawer Balanced Fund 10.1% 1.8% 6.0% 6.5%
--------------------------------------------------------------------------------------------------
I.G. Core Portfolio Balanced 8.18% 2.34% 5.01% 4.16%
RBC Select Balanced Fund 10.2% 2.0% 5.9% 5.4%
TD Comfort Balanced Gr Fund 11.18% 1.34% 2.31% 4.62%
Sunlife Granite Balanced 8.9% 1.7% 5.4% 5.6%
Scotia Selected Balanced Gr. 9.41% 1.64% 5.35% 4.90%
CIBC Managed Balanced 9.31% 2.01% 5.11% 4.37%
CIBC website not updated for 2023, used Morningstar instead.
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. 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?
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.
What is the variable benefit?
The variable benefit was originally only allowed for Saskatchewan residents but now available to all members. This allows you to maintain your Sask Pension account investment and withdraw money similar to a RRIF. This is great if you would rather keep your investment with SPP!
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 keep your money invested with SPP as the variable benefit. SPP Balanced Fund is quite competitive for it's asset class. The SPP investment returns are fairly competitive. Additionally, you also could transfer out after retirement to an RRIF of your choosing.
Aren't credit card contributions treated as cash advances?
Not in this case! So rest assured, your contribution is treated as a purchase!
Do contributions count toward minimum spend requirements (MSRs)?
Yes, it is treated as a purchase so it counts.
Does Saskatchewan Pension Plan Pre-Authorized Contributions count toward reoccurring bill payment bonuses on credit cards?
YMMV. It seems it depends on the issuer. Please post if you can provide a data point.
(Tangerine Mastercard, No) (thanks @jevonb )
(TD Cashback, Yes BUT TD Rewards, No)(Thanks @latebuyer)
(BMO, Yes)(Thanks @hk1989 )
(Scotia, Yes)(Thanks @guilleiguaran
(**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 equivalent Canadian Couch Potato portfolio returns. Once you factor in credit card rewards, you could be 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. That being said, one should consider the type of investment this is.
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 is a 60% equity, 40% fixed income investment. This may not be appropriate to your risk tolerance nor for your growth requirements. 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 starting DIY investments.
Last edited by xgbsSS on Feb 1st, 2024 5:21 pm, edited 74 times in total.
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