# Help me allocate my Defined Contribution Pension Plan



## ehrof (May 2, 2011)

*Background:*
I've been investing at least 10% of my net income since I started working full-time in 2009. I've got about $40K invested in a variety of blue-chip, dividiend-paying Canadian and US corporations through registered (all of my US investments and some Canadian) and non-registered accounts. I have been purchasing my Canadian blue-chips via DRIP programs and rolling them into my RSP in February of each year. The US investments are purchased directly in my RRSP via cash investments. At least annually, I re-balance. I have no exposure to bonds in my investments. I do no plan on selling any of my investments and will hold to retirement (at least 25 years away).

*Current Situation:*
I just signed up for my work's defined contribution pension plan which is managed through Standard Life. Because of this, my range of invest-able funds are quite limited. I make the maximum contribution (4%) which is matched by my employer. Effectively, I am now contributing about 18% of my net to various investments each year.

*Question:*
What funds would you suggest that I invest in my pension given my current investments? My first instinct tells me I should invest it between international funds and bonds/interest bearing funds as those are the exposures that I am currently missing in my portfolio. Here are my options; I've bolded the ones that I'm considering.

Guaranteed
Standard Life daily interest accumulator (currently 0.775%)
Standard Life 1 year compound interest accumulator (currently 1.275%)
Standard Life 3 year compound interest accumulator (currently 1.525%)
*Standard Life 5 year compound interest accumulator (currently 1.925%)*

Balanced/Diversified 
234- Balanced (Beutel Goodman) 
10- Diversified (SLI) 

Fixed Income 
9- Money Market (SLI) 
*236- Fixed Income (Beutel Goodman) *
*19- Canadian Bond Index (SLI)*
202- Real Return Bond (SLI) 

Equity 
235- Canadian Equity (Beutel Goodman) 
26- Canadian Equity (Jarislowsky Fraser) 
5- Canadian Equity Index (SLI) 
48- Canadian Dividend (SLMF) 
640- Canadian Small-Cap Equity (BMO Asset Management) 

Specialty 
677 - Global Absolute Returns Strategy SLI 1 

Equity 
238- US Equity (Beutel Goodman) 
100- US Equity (Guardian) 
20- US Equity Index (SLI) 
*679- International Equity - Invesco 
295- International Equity (Mawer) 
21- International Equity Index (SLI) 
239- Global Equity (Beutel Goodman) 
33- Global Equity (Invesco Trimark) 
641- Emerging Markets (AGF) 
*
Specialty 
11- Real Estate (SLIRE)


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## bltman (Aug 12, 2010)

Haven’t been on this board in a while but I had similar questions when I was trying to make use of my workplace’s rsp match program so I thought I would respond since no one else has.

A couple of questions – 1) Are you able to transfer any money out of your contribution and the match accounts? 2) What are the MER or management fees associated with each of these funds? 

If you are able to transfer out of the workplace accounts without fees (sometimes the plans let you do this once per year), you may want to consider placing everything in a placeholder fund (e.g. 9, 19 or 24) and then transfer the amounts once per year. 

If not, the easiest approach (and the one I ended up using) is to use the available funds to build a diversified portfolio. For example, you would use funds 19, 5, 20 and 21 to build a portfolio similar to the global couch potato (http://canadiancouchpotato.com/model-portfolios/) or you can add 202 and 11 to these funds to mirror the complete couch potato (also found at the link above). If you feel you are already overexposed to Canada and the US, you can simply put a lower percentage into funds 5 and 20.


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## Sampson (Apr 3, 2009)

I would consider this portion as an extension of your overall portfolio so round out your total portfolio with asset classes you are missing.

I wouldn't get too fancy, a bond index fund, a international index fund, and possibly the real estate or emerging markets. (assuming you have adequate exposure to Canadian and American markets already)


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## Four Pillars (Apr 5, 2009)

Sampson said:


> I would consider this portion as an extension of your overall portfolio so round out your total portfolio with asset classes you are missing.
> 
> I wouldn't get too fancy, a bond index fund, a international index fund, and possibly the real estate or emerging markets. (assuming you have adequate exposure to Canadian and American markets already)


+1.

You have way too many funds.


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## PharmD (Dec 21, 2011)

I don't think that any of us are in a position to say exactly what you should invest in as we have so limited information, but I would say that out of that list Beutel Goodman, Mawer, and Jarislowsky Fraser consistently have products that are top quality for a reasonable price. The only exception to this is if extra fees are charged on top (such as with the Manulife Mawer funds), but I see no good reason that should be the case as there is no advisor involved so fees to pay them are not necessary.


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## ehrof (May 2, 2011)

bltman said:


> If you are able to transfer out of the workplace accounts without fees (sometimes the plans let you do this once per year), you may want to consider placing everything in a placeholder fund (e.g. 9, 19 or 24) and then transfer the amounts once per year.


What do you mean by this? transfer them out of the Standard Life Pension and into another one of my registered accounts?



> I would consider this portion as an extension of your overall portfolio so round out your total portfolio with asset classes you are missing.
> 
> I wouldn't get too fancy, a bond index fund, a international index fund, and possibly the real estate or emerging markets. (assuming you have adequate exposure to Canadian and American markets already)


I think this might be my best best as I am definitely over exposed (based on fund theory) to US/Canadian blue-chips. I'll need to evaluate the MERs before determining what my best options are.


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## ehrof (May 2, 2011)

Four Pillars said:


> +1.
> 
> You have way too many funds.


In case it wasn't clear, i don't own ANY of these funds yet. I just need to chose a selection of them for when my RPP starts making contributions.


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