Miscellaneous
1. Should I name a beneficiary for my funds?
Absolutely! This is very important - naming a beneficiary ensures that, in the event of your death, your pension benefits will be distributed according to your wishes. You can save your loved ones unnecessary expense and frustration by designating a beneficiary. Beneficiary cards are available from your union steward, union representative, or the CLAC Pension Administration office.
You may name anyone as your beneficiary; however, the law in certain provinces requires you to name your spouse (as defined by the Pension Benefits Act), unless a waiver is signed by both of you.
It is advisable to tell your family members that you are a member of the CLAC Pension Plan so they will know to contact the CLAC Pension Administration office in the event of your death.
2. How aggressively or conservatively are the Plan's assets invested?
The Plan’s Board of Trustees has developed a Statement of Investment Policies and Procedures (SIP&P) that includes guidelines for conservatively investing the Plan’s assets, along with other policies and procedures for management of the plan. This document is reviewed at each Board meeting. The plan's professional investment managers must invest their portfolios in accordance with this document. The Plan’s current asset mix, as outlined in the SIP&P, is as follows:
The Plan’s assets will be diversified into the following groups. Their respective allowable ranges of percentage of portfolio value are included in brackets.
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Cash & cash equivalents (0% - 35%)
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Fixed income (35% - 65%)
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Canadian equity (20% - 60%)
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Foreign equity (10% - 30%)
3. In a year of low returns, is money borrowed from my account to pay for those who are retiring now?
No. All Plan members share equally in the investment returns of the Plan. The money in your account is completely your own and can never be distributed from one plan member's account to another.
4. What is unitization?
Each month, the Plan receives contributions on your behalf from your employer. This money is used to purchase units (like shares) for your account, and the newly purchased units are added to your existing unit balance. Each month, the value of a unit fluctuates with the market value of the Plan's investments, which in turn, affects your account balance. Some months show an increase in the unit value and others show a decrease - these fluctuations are normal and are reported on the reverse side of your account statement. They are also regularly updated on this site.
5. What are the operating costs of the Plan?
The Plan incurs administrative, investment, and regulatory costs in the normal course of operations. The size of the plan enables it to invest at institutional rates rather than at higher retail rates. By taking advantage of economies of scale, the plan has been able to keep its operating cost to one percent of total assets. This is well below the average management expense ratio that a normal retail mutual fund will charge, which generally ranges anywhere from 1.5 to 3.5 percent of total assets annually.