September 2012
TO:
FROM:
Academic Money Purchase Pension Plan Participants
Academic Money Purchase Pension Committee (AMPPC)
ANNUAL REPORT TO PLAN PARTICIPANTS
Since June of 2011, the Committee has met 10 times for a total of approximately 18 hours. Apart
from the normal oversight duties associated with the operation of the Plan, a principal focus this
year was to continue a review of the investment structure of the Plan. As stated in the previous
newsletter, the current investment structure has been in place since the transfer of assets in June
of 2002. The Committee believed it was appropriate to review whether the current platform was
still meeting the investment needs of Plan participants.
In October of 2011, Aon Hewitt was engaged to conduct a formal asset mix optimization study
for each of the three Life Cycle Funds. After review of this study, the Committee concluded that
the current investment structure of the Plan should remain unchanged. A communication was
sent to the membership in June of 2012 with a comprehensive overview of the investment
structure review process. This newsletter and other communications for the Plan can be viewed at
the following link:
http://www.usask.ca/fsd/faculty_staff/pension_plans/whats_new/pension_news_ampp.php
As part of the ongoing education and communication strategy, the AMPPC together with Sun
Life organized two enrollment and investment information sessions and three interactive
investment workshops on November 1st and 2nd to familiarize members with the structure of the
Plan and the principles of building an investment portfolio, respectively.
In addition, the Committee arranged for a general meeting on February 7, 2012 that provided
members with the opportunity to discuss the annual performance of the Plan with our Investment
Consultant representative. Sun Life also provided a presentation on the member website,
including how to use the asset allocation and retirement tools.
The Committee partnered with Sun Life to hold retirement planning workshops on March 12th
and 13th, 2012.
Another initiative of the Committee was to conduct an annual review and recommend changes to
the Statement of Investment Policies and Procedures to the Board and the Executive of the USFA
for approval.
Investment Performance of the Plan
As Plan members have differing risk preferences, the Plan makes several investment options
available to members. These options allow members to select segregated funds with a mix of
underlying assets that meets their investment needs. Members are reminded of their
responsibility to review periodically the portfolio structure of their participation in the Plan and to
revise it as appropriate given their needs.
In 2011 global uncertainty continued due to lingering European debt concerns. Adding to
investor’s concerns was the downgrade in Spain’s credit rating. The U.S. equity market soared in
2
October; BlackRock U.S. Equity Fund was the strongest performing investment option in the
final quarter of 2011. The International Equity Fund trailed the MSCI EAFE Index, pushing all
three Life Cycle Funds below their respective benchmarks.
The benchmark portfolios for each of the funds have been determined using the actual returns of
the market indexes such as 91-Day Canadian Treasury Bills, the DEX Universe Bond Index, the
S&P/TSX Capped Composite Index, Standard and Poor’s 500 U. S. Stock Index and Morgan
Stanley’s Europe, Australia and Far East Index. The following is a summary of the Plan’s annual
investment performance as at December 31, 2011 exclusive of Plan expenses:
Fund
Money Market Fund
Return
Benchmark
Bond Fund
Return
Benchmark
Conservative Life Cycle Fund
Return
Benchmark
Balanced Life Cycle Fund
Return
Benchmark
Aggressive Life Cycle Fund
Return
Benchmark
Canadian Equity Fund
Return
Benchmark
U.S. Equity Fund
Return
Benchmark
International Equity Fund
Return
Benchmark
1 year
4 year
1.2%
1.0%
1.6%
1.4%
9.7%
9.7%
7.0%
7.0%
6.3%
6.7%
5.3%
5.2%
(0.7%)
1.0%
1.7%
1.3%
(4.3%)
(1.9%)
(0.3%)
(0.8%)
(7.7%)
(8.7%)
0.2%
(0.7%)
4.6%
4.6%
(0.9%)
(0.9%)
(19.2%)
(10.0%)
(6.9%)
(7.6%)
The Sun Life website at https://www.mysunlife.ca contains additional information about the
Plan’s performance. You can access the Plan’s Financial Statements and Statement of Investment
Policies & Procedures (SIPP) at www.usask.ca/fsd/faculty_staff/pension_plans/index.php
Academic Money Purchase Pension Committee Members:
Faculty Association Appointees:
Don Gilchrist, Economics
Bob Lucas, Economics
George Tannous, Edwards
School of Business
ASPA Observer:
Board of Governor Appointees:
Laura Kennedy, Financial Services Division
Mike Sander, Financial Services Division
Jim Traves, University Advancement
Anand Elango, Edwards School of Business