SPP available to all employees
Employers of all sizes across the province offering Saskatchewan Pension Plan (SPP) say their employees view the program as a valuable part of their total compensation.
SPP is open to all Canadians aged 18 to 71, and investors can put in up to $2500 per year. The plan is professionally managed and offers low annual fees of about 1 per cent. Established in 1986, the plan was a model for the Canadian government's pooled registered pension plan (PRPP).
Customs brokerage Percy H. Davis Limited has participated in SPP for 17 years. The company has 34 employees on the brokerage side and 11 in its duty free shops, with offices in Saskatoon, Regina, North Portal, and Redwing, Saskatchewan.
Accounting manager Shirley Giesen says her company is committed to SPP because it helps them hire and keep the skilled employees they need. "We don't want turnover because it takes up to two years to train a new employee," she says.
Contributions are made by payroll deduction, with the company matching a portion of the contributions. "All I have to do is fill out the sheet SPP gives me every two weeks and send in a cheque," Geisen says.
SPP also fit the bill when Weyburn law firm Nimegeers Schuck Wormsbecker Bobbit was looking for an affordable retirement savings option 10 years ago. "We liked that it offers good returns, that it's portable, and that there are no fixed costs," says office manager Bonnie Olvera.
Twenty-two staff members including paralegals and lawyers contribute to SPP via payroll deduction, with the firm making part of the contribution. "Everyone was very happy when the maximum annual contributions increased from $600 to $2500.
SPP is the 28th largest defined contribution plan in the country and is open to all Canadians between the ages of 18 and 71. Average investment returns over 26 years in the balanced fund have been nearly 8 per cent, with annual expenses averaging 1 per cent over the same period.
The RRSP contribution deadline for 2012 is March 1, 2013. For more information, visit sppworks.ca.
Shed deadline by spreading out RRSP contributions
(NC) — RRSP season is in full swing, prompting Canadians to start pondering how much money they will contribute to their Registered Retirement Savings Plan (RRSP) before the March 1st deadline.
Yet with recent holiday bills rolling in and other financial priorities to manage, coming up with an annual contribution can prove difficult. A BMO study revealed that despite the fact that a quarter of Canadians find the RRSP deadline stressful, many have not opened a continuous savings plan (CSP) to help manage the stress of having to come up with a large lump-sum RRSP contribution.
A CSP regularly and automatically withdraws a specific amount of money from an investor’s bank account and invests it directly into his or her RRSP. It eases the cost of investing away from one annual deposit, and it helps to increase savings.
For example, mutual funds fluctuate in value based on market conditions, so by investing the same amount in a fund each month, an investor can buy more fund units when the cost is lower. This can reduce the average price per unit an investor pays over the long term.
“As Canadians are making New Year’s resolutions, now is an ideal time to commit to saving more money, more often,” advises Marlena Pospiech, a senior manager with BMO’s Wealth Planning Group, a part of BMO Financial Group. “Instead of contributing one lump sum to your RRSP every February, consider spreading out payments by setting up a CSP that makes automatic withdrawals every pay cheque. Not only does it relieve the anxiety of coming up with an annual contribution, but it also ensures that you take advantage of the buying opportunities downturns present and that you don’t miss out on market gains.”
More information is available online at www.bmo.com/csp.