Why transfer RRSP funds to SPP?August 30, 2012
By Sheryl Smolkin
In addition to maximum regular contributions of $2,500/year, SPP members can annually transfer up to $10,000 into their SPP account from existing RRSPs, RRIFs and unlocked RPPs. In 2012, over 200 members have already transferred $1.5 million into their SPP accounts.
Since these are direct transfers between plans, there are no tax implications. As part of the transfer process, members are asked for investment instructions directing money to either the balanced fund and/or the short-term fund.
Once funds are transferred into the SPP, all of the member’s assets benefit from the plan’s low investment fees (about 1.1 per cent) and competitive returns (7.8% since inception 26 years ago).
Furthermore, contributions are creditor-protected and cannot be seized, claimed or garnisheed in any way except in the event of a court order under a marital division or Enforcement of Maintenance Order.
Both regular contributions (up to $2,500/year) and additional amounts transferred into the SPP are locked-in and are used to provide you with a pension or lump sum at retirement.
If you have money in existing RRSPs or unlocked RPPs, consider transferring up to $10,000 each calendar year to your SPP account. It’s a cost-effective, stress-free way to enhance the benefit you receive when you retire from the plan.
SPP members may begin receiving benefits from the Plan any time after age 55 and must be retired from the Plan by the end of the year in which they reach 71. At SPP, “retirement” simply means you are receiving pension payments. You can still be employed and receive pension from SPP.
You can use this form to an initiate a transfer of funds to SPP.
Backgrounder – Saskatchewan Pension Plan and Income Tax Act Changes
Roseman: Want to save tax? Look to Saskatchewan
July 2012 returnsAugust 16, 2012
SPP posted a return of 0.18% to the balanced fund (BF) and 0.05% to the short-term fund (STF). The year to date return in the BF is 3.84% and in the STF is 0.27%.
Market index returns for July 2012 were:
|Index||July 2012 return (%)|
|S&P/TSX Composite (Canadian equities)||0.80|
|S&P 500 (C$) (US equities)||-0.32|
|MSCI EAFE (C$)
(Non-north American equities)
|DEX Universe Bond (Canadian bonds)||0.66|
|DEX 91 day T-bill||0.06|
Last chance to hear Canada's "Idiot Millionaire"August 9, 2012
Canada’s “Idiot Millionaire”, Derek Foster, is coming to Saskatchewan!
Derek writes about SPP in “The Worried Boomer”
At age 34 Derek Foster left the workplace and has become Canada’s youngest retiree. Investing in simple stocks he has become know as an “idiot” millionaire. In is book “The Worried Boomer” Derek dedicated an entire chapter about Saskatchewan Pension Plan.
Join Derek, the Idiot Millionaire, at one of the following events to learn about his simple investment approach and how it can be a part of your journey into retirement.
Regina: August 13 – 11:30 am
Hosted by: Regina Chamber of Commerce
Lunch at Conexus Arts Centre Theatre lobby
200A Lakeshore Drive
Register: online at reginachamber.com or 1-306-757-4658
Members: $35 pre-registered/Door: $40
Non-members: $50 pre-registered/Door: $55
Saskatoon: August 17 – 7:30 am
Hosted by: North Sask Business Assoc & Saskatoon Chamber of Commerce Breakfast at Saskatoon Club
417 21st St E
Register: by email firstname.lastname@example.org or 1-306-242-3060 register by 10 am August 16
Costs: All attendees $18
- Stop Working
- The Lazy Investor
- Money For Nothing
- The Idiot Millionaire
- Stop Working Too: You Still Can
Each attendee will receive a $10.00 coupon towards the purchase of one of Derek’s book available at the event.
Talking to Jonathan ChevreauAugust 2, 2012
Hi, my name is Sheryl Smolkin. I’m a lawyer and a journalist. Today I’m pleased to be continuing the Saskatchewan Pension Plan’s series of financial expert interviews with Jonathan Chevreau.
Jonathan was the personal finance columnist for the Financial Post from 1996-1998 and then for the National Post since its launch in 1998 until this year. He has recently been named Editor of MoneySense magazine.
Although he has authored or co-authored seven non-fictional financial books, his most recent work is “a novel about one couple’s turbulent journey to financial independence” called “Findependence Day.” And that’s what we are going to talk about today.
Q. Is the expression “Findependence Day” a Chevreau original or has it been used before by others?
A. I would say it is a Chevreau original although at one point there was an unrelated film called Findependence Day. I just looked at the American Independence Day, played around with financial independence and came up with “Findependence Day.” The title came first, and then I thought I should write a book to go with it.
Q. You are known as a financial writer who writes serious articles and books about complex financial matters. What made you decide to write a novel?
A. I think like a lot of journalists there was always a secret closet novelist lurking because it seems like a more creative, long-term project than bashing out daily columns. Then there is always the example of David Chilton’s The Wealthy Barber.
Q. Although Findependence Day is clearly fiction, some of your characters and concepts seemed very familiar to me, so I have to ask you:
- Is Didi Quinlan of the television program Debt March based on Gail Vaz- Oxlade’s show ‘Til debt do us part?
Well like most fictional characters it’s a composite, I would say she’s was certainly one of three or four people, keeping in mind the book was also written for the US market. We have a lot of financial reality TV shows now. When I talk to American journalists they’re convinced I am talking about Suze Orman. But I would say that Gail is probably the single closest model.
- Were you thinking of Stewart McLean’s Vinyl Cafe when you created “The Vinyl Cave?”
Actually, that was based on Kate Dunn’s Vinyl Museum around the turn of the century. Then Peter Dunn had two Vinyl Museum stores in Toronto – one was close to where I lived on the Lakeshore.
- Did you draw on Finance Professor Moishe Milevsky’s characterization of people as either “stocks” or bonds” as discussed by the financial advisor Theo in the book?
I think I actually did credit Moshie’s book in the fine print or in “Theo’s library”at the end of the book.
Q. In the opening chapter, television host Didi Quinlan tells the young couple Jamie and Sheena Morelli that she is going to drill two words into their skulls: guerilla frugality. Is this phrase also a Chevreau original and what does it mean?
A. Yes it is original. I came up with that expression in a column long before I wrote the book. To me it’s like guerrilla warfare. In order to save and invest you have to first get out of debt, and then you have to continue to be frugal in order to build wealth. What I mean by the term is “guerrilla warfare on the economic consumption front.”
Q. Another thing Theo, the financial planner in the book advocates is developing different streams of income on the road to financial independence. Does that mean moonlighting or working at more than one job? Is that practical for hard-working, busy parents?
A. Ideally you can always give yourself a raise. You can get a raise from your boss or change jobs and earn a higher amount. You can aIso take on extra work to earn another $10,000 or more on nights and weekends but this may be stressful and perhaps not the optimum approach if you have a young family.
Ultimately as you know anybody who is a retiree probably does have multiple streams of income – two or three pensions, government benefits and private savings in a RRIF. But when we’re in the wealth accumulation phase, if both partners are employed we tend to be dependent on one or two different sources of income.
You have to go from one or two salaries to these multiple sources of income when you become financially independent and ultimately when you are in full stop retirement.
Q. If you could identify one or two key messages in the book for people striving to achieve financial independence, what would they be?
A. If your goal is financial independence or findependence, the means is guerilla frugality. The two go together. So be frugal first to get rid of your debt and second to build wealth. These are the key takeaways in order to achieve what I call Findependence day.
Q.Have you reached your Findependence day, and if not what is the magic number?
A. I used to put anywhere from 57-64 on my blog, the Wealthy Boomer. Right now I’ve joined MoneySense magazine at 59 years old. I guess my partner and I have achieved financial independence of sorts, but we want to achieve a higher level. I am at the stage of working now because I want to, not because I have to. And as you know everything gets better the longer you wait.
I enjoy what I do and I don’t find there’s a big distinction between what I do evenings and weekends and what I do during the day. I’m up reading all this stuff on twitter and social media and I might as well get paid for it as long as I enjoy it and I’m healthy. The thing is, at some point, I may not have a willing client, or a willing employer even if I want to work to 70 or 75. At some point we all must have financial independence because our body or our minds won’t permit us to earn the single employment stream that most people rely on.
Thanks Jonathan. It was a pleasure to talk to you today. I read your book cover to cover and learned a great deal. I actually joined the SPP to get “another stream of income” although I have an employer-sponsored pension plan. If they haven’t already done so, I’m sure many SPP members will be interested in ordering the book from your website.
It was a pleasure Sheryl. There’s actually a question and answer about the Saskatchewan Pension Plan in the June issue of MoneySense.