By Sheryl Smolkin
When you save for retirement, the last thing you should have to worry about is whether your money is in good hands. With the Saskatchewan Pension Plan you can be confident that your money is managed by professional investment managers based on a written statement of specific quality, quantity and benchmark standards.
A Board of Trustees appointed by the Saskatchewan government administers the Plan and acts as Trustee of the Funds. The Board has a fiduciary responsibility to ensure the investments are managed prudently. Responsibility for safekeeping of the assets, income collection, settlement of investment transactions, and accounting for the investment transactions has been delegated to a trust company.
No one can guarantee how much your investments will earn over time, but SPP’s Statement of Investment Policies and Goals for the investment and administration of plan assets is based on a “prudent person portfolio approach.”
Non-retired members can invest their assets in either the balanced fund or the short-term fund. These two funds are collectively known as the Contribution Fund. Assets of retired members are held in the Annuity Fund.
The purpose of the SPP Balanced Fund is to accumulate member assets and invest them in a prudent, risk-controlled manner for long-term growth. The short-term fund is designed to preserve capital and provide a stable cash flow.
In order to achieve the long-term investment goals, the balanced fund invests in assets that may have uncertain returns, such as Canadian equities, foreign equities and bonds. However, the Board attempts to reduce the overall level of risk by diversifying the asset classes, diversifying within each individual asset class and diversifying by manager style.
Risk is also addressed through quality, quantity and diversification guidelines and by retaining an Investment Consultant who monitors investment performance and reports to the Board on Investment Manager related issues that may have an impact on performance.
As a further risk control measure, management reviews compliance on a monthly basis of each of the managers with the quality and quantity guidelines contained in this policy. Finally, investment managers provide quarterly reports to the Board on compliance with the investment policy throughout the reporting period.
The short-term fund eliminates most risks by investing solely in a high quality money market portfolio. The remaining risks are accepted as the costs of providing a high level of capital preservation.
You can review SPP’s balanced fund, short-term fund and annuity fund investments at December 31, 2011 on the Plan’s website.
SPP allocates 100% of the market rate of return, less operating expenses of about 1% to members monthly. With all of the checks and balances in place, you can be confident that your money is in good hands, and will be there to help fund your retirement when you need it.
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