Four out of five taxpayers will take this article seriously. The fifth
has a public sector pension.
TORONTO, Dec. 1, 2011 /CNW/ - Saving more, spending less and retiring
later are unsatisfactory alternatives to the inadequate pension
awaiting many of the 80% of Canadians who are not members of a public
sector pension plan. A Canadian paper released in the Rotman
International Journal of Pension Management, by PŮR Investing Inc. of
Toronto www.purinvesting.com , presents a strategic breakthrough with positive implications for
millions of people in retirement savings plans around the world. http://www.rijpm.com/article/what-dc-plan-members-really-want . "What DC Plan Members Really Want" offers strategies making
retirement investing easier, more effective and more personalized than
anything currently available in the defined contribution (DC) pension
universe. In Canada, RRSP investors, DC plan participants and those
considering the proposed Pooled Registered Pension Plan (PRPP)
programme can benefit.
"We believe most people would welcome a reliable income in retirement
similar to what a civil servant's defined benefit pension provides"
said Mark Yamada, President and CEO of PŮR Investing Inc., the paper's
co-author. "Obviously individuals and their employers have to fund the
plan rather than taxpayers, and there aren't any guarantees. However,
simply targeting a level of replacement income and having professionals
managing their investments would be welcomed by many who are currently
required to do it themselves. Gold-plated government plans pay annual
retirement benefits equal to about 70% of an employee's average best
three or five years of employment income. Taxpayers deserve the
opportunity to work towards an equivalent level of post employment
income." This is timely because "DC plans and RRSPs cannot
realistically deliver even half the retirement income that DB plans can
provide" according to an October 2011 CD Howe Institute report.
"We started with the target date or lifecycle fund and developed
strategies to make it better. These funds automatically become more
conservative as retirement approaches, making them an easy one-decision
choice for investors," said Ioulia Tretiakova, Director of Quantitative
Strategies for PŮR, and lead author. "However, they all fall short in
dealing with market risk and personal goals."
Frequency of delivering a 70% public-sector-like replacement income in
All bonds (Barclays Aggregate Index)
Balanced fund (60% S&P 500: 40% Barclay's Aggregate Index)
Target date fund FIXED EQUITY GLIDEPATH (Fidelity, Vanguard, T .Rowe
All stocks (S&P 500)
Target date fund DYNAMIC (PŮR Investing Inc.)
Forty years of 9% annual contributions, using historical returns,
replacing 70% of income for a minimum of 20 years in retirement. See
paper for all assumptions.
Improving investment outcomes within the simplicity of a single
investment choice would be a boon for those saving for retirement.
However, through technology, a personal target date fund for each plan
member is possible, making the approach suitable not only for group and
individual retirement plans but also for the modern worker who is
likely to move through a series of jobs and employers before retiring.
The Rotman International Centre for Pension Management (ICPM) publishes the Rotman International Journal of Pension Management in
partnership with Rotman School of Management and the University of
Toronto Press twice a year. We encourage open sharing of the articles
in the Journal. There is no fee to access or distribute this
PŮR Investing Inc. engineers disruptive investing and retirement strategies for Gen X/Gen
Y/Gen F and mass affluent investors. PŮR leverages new technologies to
use investment products more effectively at lower cost. We empower the
Additional web links:
Video with caption: "Video: PUR Investing Pension Breakthrough". Video available at: http://stream1.newswire.ca/cgi-bin/playback.cgi?file=20111201_C2939_VIDEO_EN_7705.mp4&posterurl=http://photos.newswire.ca/images/20111201_C2939_PHOTO_EN_7705.jpg&clientName=PUR%20Investing%20Inc%2E&caption=Video%3A%20PUR%20Investing%20Pension%20Breakthrough&title=PUR%20INVESTING%20INC%2E%20%2D%20PUR%20Investing%20Pension%20Breakthrough
SOURCE PUR Investing Inc.
For further information:
Mark S. Yamada, President & CEO, PŮR Investing Inc. 416.637.3576