When you complete your enrolment form for the Defined Contribution (DC) plan, you'll choose the types of investments you want for your contributions.
Your local Human Resources Representative will give you a brochure that describes all your investment options. You can divide your contribution into different percentages among the funds offered.
The investment possibilities are divided among various types of investments, from a variety of fund managers, as shown below:
In the absence of clear or proper investment directions, CBS will invest the contributions in your account in the Moderate LifeCycle Portfolio assuming retirement at age 65.
LifeCycle Detailed Asset Mix by Risk Profile
For detailed information about the asset allocation mix for each risk profile and targeted years until retirement, please refer to the Detailed Asset Mix spreadsheet.
About the Investment Process
You also need to think about your ability to accept risk. Normally, this is measured by how long your investment horizon is – that is how many years will there be until you need your retirement money. The longer your investment horizon, the more opportunity there is for your investments to recover from a bad year or two. With a shorter investment horizon, there is less time to recover from losses.
In general, even though you are willing to accept a lot of risk, advisors will suggest a less aggressive investment strategy if you are within about 10 years of retirement.
The CBS Investment Allocation process provides you with the option of selecting a LifeCycle Portfolio with a Pre-Determined Investment Mix
Your ability to accept risk is measured down the left side of the chart by reference to your investment horizon. Your willingness to accept risk is measured across the top of the chart by your risk profile (Conservative, Moderate or Aggressive).
Your personal risk profile
Risk Profile Questions
1. How knowledgeable are you about investing and the various investment options available to you?
a) I have no investment experience.
b) I have a basic understanding of investments, but I am not sure what to do to design my own investment strategy.
c) I have made investments before and understand the different risks from different types of funds.
d) I follow the markets closely and feel that I am a knowledgeable investor and able to design my own investment strategy.
a) I want a stable return on my investments and confidence that I will never lose money.
b) I want a reasonably good stable return on my investments, but I will accept there might be some small losses which occur infrequently.
c) I want a good return on my investments and I am prepared to accept some short term losses, as long as they are not significant.
d) I want aggressive investments where I can expect a superior investment return and I am prepared to accept significant losses over short term periods in order to achieve this.
a) Keep the $5,000 and go home.
b) Give the $5,000 back to play a game with 3 chances in 4 of you winning $12,000.
c) Give the $5,000 back to play a game with 2 chances in 4 of you winning $20,000.
d) Give the $5,000 back to play a game with 1 chance in 4 of you winning $50,000.
e) Give the $5,000 back to play a game with 1 chance in 10 of you winning $200,000.
a) After 5 years you will have a total of between $11,000 and $13,000.
b) After 5 years you will have a total of between $10,000 and $15,000.
c) After 5 years you will have a total of between $9,000 and $17,000.
d) After 5 years you will have a total of between $7,500 and $20,000.
e) After 5 years you will have a total of between $5,000 and $30,000.
a) You decide to invest most, or all of your retirement savings in the fund.
b) You are tempted, but decide to invest only part of your retirement savings in the fund.
c) You are not sure, so you contact your Financial Planner to discuss the risks.
d) You are not comfortable acting on a friend’s advice and do nothing.
a) Make no changes.
b) Take on a little more risk with part of your money.
c) Take on a little more risk with all of your money.
d) Take on more risk with part of your money.
e) Take on a lot more risk with all of your money
a) More than 15% loss
b) Up to a 15% loss
c) Up to a 10% loss
d) Up to 5% loss
Use the following chart to determine your total score:
Your total score:
Based on your answers, your risk Profile is most like:
Timing of Investment Election Instructions
You may change your allocation instructions for all contributions to the Plan or transfer money between investments at any time. Any requests received before 8:00 a.m. (ET) will be processed on the same business day.
Note that successfully submitted future investment allocation changes will be applied
to the next available contribution. This allocation instruction will cancel and
supersede any previous instruction on file and will become effective immediately.
DC members pay a monthly fee to Manulife for investment management.
Investment management fees compensate the investment managers for their expertise in researching, evaluating and selecting securities; for buying and selling securities; for custody charges; for providing communications materials related to the funds; and for other aspects of funds management.
The investment management fee varies because it depends on the amount of money and the particular investments held in the member’s Retirement Account. Investment management fees are charged at the end of each month.
These fees are summarized in the following table:
LifeCycle Portfolio Fees
Investment fees would be paid on each of the underlying funds, the same as now, plus an additional 10 basis points or one-tenth of one percent (0.1%) that will be paid to Morneau Shepell for managing the glide path and quarterly rebalancing.
Since plan members in each of the LifeCycle Portfolios will be at different stages along the glide path, with different and changing investment mixes, it is not possible to provide an overall management fee rate for the LifeCycle Portfolios
Morneau Shepell Administration Fee
Members of the CBS DC pension plan currently pay a monthly fee of $8.09 (including HST) for the administration services provided by Morneau Shepell Ltd.
These services include: maintaining records of individual member accounts; giving investment instructions to Manulife based on your direction; reconciling the financial records; producing and distributing quarterly statements; providing information to members by phone and in writing; providing option statements on termination or at retirement; and for maintaining a Web site focused on the CBS Defined Contribution Pension Plan and its features.
The administration fee is deducted at the start of each month.
Plan Expense Fee
The CBS Defined Contribution Advisory Committee has recommended, and CBS has approved, an annual fee of $120 ($10 per month) per member.
This fee will reimburse CBS for such plan expenses as investment monitoring, audit fees, legal and actuarial advice, Advisory Committee meeting and travel costs, annual plan registration fees, and member communication (including the CBS Defined Contribution Retirement Planning Workbook).
The amount of the fee will be set each year at the November meeting of the Advisory Committee effective January 1 of the following year. Any change in fees will be communicated to members in the fourth quarter Member Statement (sent out in February of the following calendar year).
The $10.00 will be allocated proportionately across all your accounts and investments,
with fractions of units being cashed to arrive at the total amount of $10.00. This
fee will be deducted on the 15th day of each month.