August 7, 2008
TO:
Academic Money Purchase Pension Plan Participants
FROM:
Academic Money Purchase Pension Committee (AMPPC)
ANNUAL REPORT TO PLAN PARTICIPANTS
Introduction
The main purpose of this report is to inform plan participants of the activities of the
AMPPC over the last year (July/07 – Jun/08) and provide the investment performance of
the Plan. Apart from the normal oversight duties associated with the operation of the
Plan a number of other duties and initiatives were addressed. Following is a summary of
these activities.
Changes to the Plan
Two amendments to the Plan were reviewed, accepted and recommended for approval by
the AMPPC to the Faculty Association Executive and the Board of Governors for approval.
Amendment M-06 was a result of the most recent Collective Agreement with the Faculty
Association which provided for an increased employer contribution to the pension plan of
0.5%. This is matched by the employee for an overall contribution increase of 1.00%. The
pension increase was also extended to out-of-scope faculty and senior administrative staff.
The change was effective June 1, 2007 and has been approved by the Faculty Association
Executive and the Board. The current employee contribution for academic and senior
administrative staff is now 7.32% and an employer matching contribution of 7.32%.
Amendment M-07 is a change as a result of the abolishment of mandatory retirement in
Saskatchewan on November 17, 2007. The current terms of the 2000 Academic Money
Purchase Pension Plan do not permit contributions to the Plan after the June 30th following
age 67 and therefore the University has proposed a change to the Plan to permit employees
who continue in employment after the June 30th following age 67, to continue to contribute to
the Plan until the latest date permitted by the Income Tax Act (currently age 71). The
AMPPC has accepted the amendment and recommended it to the Faculty Association
Executive and the Board of Governors for approval. This amendment was approved by the
Board at its July 25, 2008 meeting and will be applied retroactively.
Information and Communication
As part of the ongoing information and communication strategy, the AMPPC together with
Sun Life organized two different interactive sessions on October 22 and 23, 2007 which
provided general information about the Plan as well as different approaches to developing a
member’s investment strategy and building an investment portfolio. The AMPPC also
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partnered with Sun Life Financial to circulate its newsletters dealing with how to access the
website, building your financial plan, advice in stormy markets and information on the
importance of a Will. These newsletters and others can be viewed at the website listed at the
end of this newsletter.
In addition, the Committee arranged for a general meeting on February 6, 2008 that provided
members with the opportunity to discuss the annual performance of the Plan with our
Investment Consultant representative. A Sun Life representative was also present to answer
questions about Sun Life operations in relation to the Plan.
Sun Life also provided information sessions on March 5 and 6, 2008 on the University of
Saskatchewan Group Retirement Fund. These sessions were of primary importance to
members who are considering retirement and covered such topics as the income options
available to members on the Group Retirement Fund, how the Canadian Government’s
retirement system works, sources of retirement income and information to help understand
the financial considerations involved in creating a retirement income plan.
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.
The following is a summary of the Plan’s investment performance as at December 31, 2007:
Fund
Money Market
Return
Objective
Bond Fund
Return
Objective
Conservative Life Cycle Fund
Return
Objective
Balanced Life Cycle Fund
Return
Objective
Aggressive Life Cycle Fund
Return
Objective
Canadian Equity Fund
Return
Objective
U.S Equity Fund
Return
Objective
International Equity Fund
Return
Objective
1 year
4 year
4.5%
4.4%
3.4%
3.3%
3.6%
3.7%
5.3%
5.3%
2.0%
2.5%
6.1%
6.2%
-1.2%
0.1%
7.4%
7.9%
-2.9%
-1.1%
8.0%
8.7%
6.8%
9.8%
15.7%
16.3%
-10.6%
-10.5%
1.9%
2.1%
-9.2%
-5.7%
7.6%
10.0%
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The Sun Life website at https://www.sunnet.sunlife.com/member/signin/index.aspx?
contains additional information about the Plan’s performance.
The Committee is also closely monitoring the performance of one of the Canadian Equity
managers. This manager has consistently underperformed the benchmark over the last
number of years and the Committee is looking at various options to address this.
In addition, as part of its ongoing review of the governance structure of the Plan, the
Committee reviewed the Statement of Investment Policies and Procedures (SIPP) and
recommended amendments to the SIPP to the Faculty Association Executive and Board for
approval.
Other Initiatives
The Committee reviewed a member’s request as to whether the AMPPC could consider
making ethical/sustainable/socially responsible investments available through the Pension
Plan. After careful consideration and exploring a number of options, the Committee elected
not to pursue this type of funds at this time. The major reasons being overall costs for this
type of fund (roughly double that of the existing options) and the sub-standard performance
of these funds, which in turn could lead to an inadequate pension in the future.
The Committee also reviewed a member’s request about the possibility of making voluntary
contributions to the Plan as the Plan does not currently permit voluntary contributions. The
advantages and disadvantages of this option were reviewed along with setting up a separate
Group RRSP with Sun Life for this purpose. At this time the Committee decided not to
proceed with this option mainly as a result of resource issues at the University and the
additional risk and liability this would create for the University.
Plan Documents
The AMPPC has met 10 times since June, 2007 for a total of approximately 17 hours.
Copies of the agenda and minutes are on file in the office of the Director of Pensions and are
available for inspection by any member of the Plan during regular working hours by prior
arrangement.
Please note as well that a website is available to review any of the following documents:
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•
•
•
•
•
Plan Summary Document
Expense Policy
Financial Statements
Governance Document
Investment Policy
Pension Newsletters
The website is http://www.usask.ca/fsd/pensions/. Then double click on Pensions followed
by Academic Money Purchase Pension Plan.
Respectively submitted by
Laura Kennedy, Chair
Academic Money Purchase Pension Committee