Paying Lower Fees - A benefit of your group retirement plan

Paying Lower Fees - A benefit of your group retirement plan

There are many advantages to investing in your Group Pension Plan. One significant advantage is paying lower Investment Management Fees (IMFs). Paying lower fees can help your savings grow faster and last longer in retirement. 

What is an Investment Management Fee? 

Investment Management Fees (IMFs) are the built-in cost of investing in the funds in your Group Retirement Plan, comparable to Management Expense Ratios (MERs) you would pay for a mutual fund in an individual plan at a bank or another financial institution. The fees cover the fund managers’ operating costs and reduce your rate of return. They are deducted automatically from the investments you hold. 

How does the IMF impact your rate of return? 

As the IMF reduces your gross rate of return, it is to your advantage to pay a lower IMF, so that more of your savings are left in the plan to grow for retirement. The return that is reported to you after the IMF has been deducted is called your personal net rate of return. 

Why is a Group Plan IMF often lower? 

The IMF is calculated on the total assets of all members in your Group Retirement Plan, and this total is greater than the assets you typically hold at a bank or other financial institution. When you have the purchasing power of the group working for you, with a higher total balance than an individual plan, lower fees can result. 

Where can you find information on your plan’s IMFs? 

You can see the IMFs you are charged, the performance of your investments, and personal net rate of return for your Group Retirement Plan on the secure member website and your member statement. 

For more information on your pension plan and the fees you are paying on your investments, contact us. We're here to help!