May 14 2007
Pension Fund Update
- 1 Comment
As many of you know, part of my investment assets are membership in my employer’s registered pension plan. As a reminder, the way this plan works is that the company automatically contributes 2% of my earnings into the pension plan. I then choose to contribute an optional 2% at which time my employer does a matching 2% contribution. Basically, I contribute 2% to my pension plan and my company gives me 4%. Easy money.
With these funds I can invest in a short list of large pension funds. The extra bonus with these funds is the company picks up the MER as opposed to me paying for them out of my contributions. Basically, all my invested money goes to work. The fund classes that I have chosen are broken down as such:
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Canadian Equity Fund
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U.S Index Fund
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International Equity Fund
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Bond Fund – I do a very small amount to this fund (equities do much better IMHO)
Since opening this account in November of 2005, I have seen an annualized return of approximately 13% which I think anyone would consider to be a good return. Each an every month I add money to this account and it grows. As it is a defined contribution plan, the better return I can muster, the better my retirement income will be down the road when I need the money.
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