Who manages the investments for the Common Good Plan?

The investment manager for the Common Good Plan is BlackRock, the world’s largest asset manager. Founded in 1988, BlackRock has over $8.67 trillion USD in assets under management, including managing over C$200 billion in assets for Canadian clients. The firm pioneered target date funds in 1993 with the launch of LifePath Funds. BlackRock is the market leader in Canada for target date funds, with over C$30 billion in assets in its LifePath products, which have been serving Canadian investors since 2007. LifePath is used as the default investment option in some of Canada’s largest defined contribution plans.

Are the investments guaranteed?

Target date funds are not guaranteed at any time, including at the target date, and will fluctuate based on stock market performance.

What happens if the market drops?

The value of the target date funds can vary due to market performance. The purpose of target date funds is to help members invest for the long-term. It’s not a short-term approach, which would require a more aggressive investment strategy.

What is a target date fund?

Target date funds are professionally managed, diversified investment funds, meaning investing in a BlackRock LifePath Fund can provide an all-in-one investment solution at any age.

Each fund holds a number of underlying investments – from stocks to bonds, including U.S. and global markets, as well as real assets such as real estate and infrastructure – creating diversified funds with one main objective: helping to manage your investment risk throughout your working years and into retirement.

When you’re young and far from retirement, the investment mix is more aggressive to help your investments grow. As you approach retirement, the fund automatically shifts to a more conservative allocation with the goal of preserving your savings. When you arrive at your desired retirement date, the fund shifts to an investment mix to help you retain spending power through retirement.

How do these fees compare?

The fees negotiated for the Common Good Plan are considerably lower than average investment management fees that Canadian retail investors pay. According to the Investment Funds Institute of Canada, the average Canadian investment fund has fees of about 2.1% of assets. In contrast, the Common Good Plan provides investment management services, plus all other retirement services offered by the plan for its members, for a total of 0.6% of member assets and $10/month per member. 

These low fees are a big part of what makes the Common Good Plan different from others in the market and directly impact retirement outcomes for members. The high fees typical in Canada can eat up over half of long-term investment gains, and you can take a look at this tool to learn more.

Who will oversee and manage the Common Good Plan?

There are a few different roles when it comes to managing the Common Good Plan:

Common Wealth is the plan provider. This means they provide and maintain a self-service platform, provide administration and recordkeeping services in respect of the Common Good Plan, support member communication and education sessions, and respond to member and employer inquiries.

Canadian Western Trust
(CWT) is the custodian and trustee for the plan. They are responsible for holding and safeguarding the assets of plan members, as well as maintaining the registration of the plan with the Canadian Revenue Agency (CRA).

BlackRock is the investment provider and fund manager for the plan. Plan members can invest their contributions by selecting one of BlackRock’s nine target date funds.

What account types does the plan include?

The Common Good Plan is a group retirement income plan composed of a group Registered Retirement Savings Plan (RRSP), a group Tax-Free Savings Account (TFSA), and a group Registered Retirement Income Fund (RRIF).

Do I get a tax deduction for the contributions I make to the Common Good Plan?

Contributions to a RRSP are tax deductible.

Tax receipts will be issued for all ongoing and one-time contributions to your RRSP. You will receive two tax receipts, one for all contributions made during the first 60 days of a taxation year and one for all contributions made during the last 10 months of the taxation year. These receipts will be made available in the “My Documents” section of your online account, accessible through the drop down menu at the top right corner.