# Omers avc



## RedRose (Aug 2, 2011)

Has anyone contributed to this?
It is an option to contribute a lump sum to this pension and hope that a Municipal Gov't pension is better managed-funded. Sheesh! All takes a leap of faith huh?

This Additional Voluntary Contibution plan and some buy back of service only takes your contribution not the employers contribution to the buy back time.

They have a window of opportunity from January to April, 2012. If after that date next January to April.

Still researching options, the layers get more complex...


----------



## Daniel A. (Mar 20, 2011)

I could be wrong but I believe you have to be a member of the plan already.

If that is the case I can see where there would be an advantage ie management fees.
They do provide tools to assess the decision.


----------



## Saniokca (Sep 5, 2009)

I probably would - I think they manage their investments in house and are doing a decent job (check this). Every time I am faced with a decision like this I take a step back and think: are they more qualified than me? is there a conflict of interest?

I would probably do the buyback too. Again this would depend on my ability to invest, my projected pension in retirement (tax reasons) as well as whether my TFSA is funded/will be funded soon.

That's the simplistic answer, I would need to know much more details to give solid advice.


----------



## stardancer (Apr 26, 2009)

My husband has an OMERS pension; if avc had been available back then, we would have done it. OMERS is one of the better, best pension plans in Canada. Don't think we have to worry about their going under.


----------



## RedRose (Aug 2, 2011)

*Thank YOU All.* 
Yes, I am already a member of OMERS and contributing only a small amount as I am only working part time these days.
I guess its kind of like buying another annuity only maybe a bit safer? Not sure of Assuris here as is with the Insurance companies.

*Saniokca,* what else would you need to know, please feel free to ask away. I am always happy to recieve advice and another outlook. I am learning all the time from this site.

The more I delve into this, the more layers there are to things...


----------



## RedRose (Aug 2, 2011)

> I probably would - I think they manage their investments in house and are doing a decent job (check this). Every time I am faced with a decision like this I take a step back and think: are they more qualified than me? is there a conflict of interest?
> 
> I would probably do the buyback too. Again this would depend on my ability to invest, my projected pension in retirement (tax reasons) as well as whether my TFSA is funded/will be funded soon.
> 
> That's the simplistic answer, I would need to know much more details to give solid advice.


*Sanioka,*


> Every time I am faced with a decision like this I take a step back and think: are they more qualified than me? is there a conflict of interest?


At this point *Sanioka,* everyone is more qualified than me. I have an extreme fear of making financial decisions, just want to make the best with the least risk.
What do you mean a conflict of interest?


----------



## MoneyGal (Apr 24, 2009)

A conflict of interest like - "does this person [or someone in this person's position] stand to make money if I make a certain decision?"

Example: the insurance agent who says that a private annuity from an insurance company is "safer" than your husband's DB pension. 

Example: the investment advisor who says that a well-managed portfolio can "virtually guarantee" that you won't run out of money until you are [some advanced age], which "you aren't likely to hit anyways." 

Or that you're going to "lose all that money to tax" compared to a "tax-advantaged" portfolio he can devise for you.


----------



## RedRose (Aug 2, 2011)

Thank YOU *MG* for explaining conflict of interest.

If, I don't have the confidence that PM will be around in 20 years from now so the DB promises would not be fulfilled. Unless the Trust RBC Dexia will honour the promises...and took the lump sum.

What if I transferred the lump sum to a registered plan? Could I diversify later to a variety of products? 

I need to think it out, where to invest it. The annuity sounds good as does going with OMERS just can't choose in this state right now.

One decision at a time I think I may have to go. The worst decisions are made in a state of anxiety and I just can't seem to decrease it.


----------



## Saniokca (Sep 5, 2009)

RedRose said:


> *Sanioka,*
> 
> At this point *Sanioka,* everyone is more qualified than me. I have an extreme fear of making financial decisions, just want to make the best with the least risk.


Sorry I forgot to check back in here.

I think you should go with OMERS because of the statement above, they have a fiduciary responsibility to look out for your interests, and they do it full time. No financial advisor will dedicate 100% of their time to you. Worse, many of them are not even advisors, they are salesmen.


----------



## MoneyGal (Apr 24, 2009)

Sanioka: she's trying to decide whether to keep her husband's DB pension from PostMedia or to take the lump sum. 

In addition, it sounds like she has the chance to make a (modest) additional voluntary contribution to the OMERS pension plan. 

She seems to be getting a lot of "take the lump sum!" opinions from people with a vested interest and/or a professional interest in that option.


----------



## Saniokca (Sep 5, 2009)

MG, I thought that this topic is just about the AVC...

I'm at work so I might be missing something sorry


----------



## MoneyGal (Apr 24, 2009)

You are correct - but she's started multiple threads - I'm just providing more context, for what it's worth. Maybe not much!

(Her last post referred to her fear that PM - PostMedia - won't be around to honour their pension obligations in 20 years, and discusses transferring the lump sum to a lifeco - none of which is about the OMERS AVC.)


----------



## NotJustDreaming (Oct 20, 2013)

Sorry to revive an older thread. I found CMF through a google search of Omers AVC to find some discussion on it.

I contribute to the AVC myself. We are couch potato investors through TD e-series index funds. We maxed out our RRSPs and TFSAs as well as contribute $7500 to the RESP for our three children to get the max CESG. I still had a chunk of RRSP mutual funds in active management from my early days that I've been meaning to do something with. So the AVC option from Omers was timely for me. I think it's the least expensive active management that the typical non-retail investor can find. 

That said, if you don't have a large enough chunk of cash at the outset, then you essentially have high fees with the MER and admin fee combined.

The 2013 administration fee is $35. As I've read here it started out at $23. So that is quite the increase right there. The 2012 MER was 0.53%. This fluctuates of course (the past five years it has ranged from .45% to .64%). 

Using the most recent expenses, if you have $28,000 available to transfer as a lump sum the $35 annual admin fees ends up as a 0.12% expense at that current AVC balance. That makes the total effective expense 0.65% (0.53% plus 0.12%). This makes it barely comparable in terms of expense to the TD e-series index we are invested in. If you're just starting out with no lump sum and only monthly contributions to the AVC then your effective expenses are going to be much higher than that because the admin fee is a relatively large annual chunk of the asset. 

Though the AVC is active management. And for me, 0.65% is an excellent expense for Active Management. 

I was still considering another lump sum transfer from my TD e-series RRSPs. But I am reluctant to do it simply because in the event of my death, unlike if I kept it in my own RRSP, the AVC amount cannot be transferred directly to my husband's RRSP. He still would get the AVC balance but it would be unregistered and subject to tax. That is a giant negative for me. 

I was hoping to find more discussion about this in a personal finance forum.

Any thoughts?

Colleen


----------



## eiffel (Aug 1, 2013)

are you maxed out for your RRSP's ?

I believe the AVC's are RRSP's so it may be no good for you to buy.


----------

