You have exceptionally low fees compared to individual investments. In fact, the power of CEIRP has helped get fees reduced five times over the years! Your low fees can make a BIG difference to your account balance over time.
You hear a lot in the news about how much Canadians are paying in fees on their investments. Fees paid on mutual funds whether at a financial institution or DIY can be as high as 2.65 % or more and in addition there may be less obvious front-end and back-end loads, deferred sales charges, and trailer fees.
In 2017 the Investment Management Fee, or IMF, on your CEIRP account were reduced for the 6th time since the inception of the plan and are currently sitting at 0.53%.
How can you see how much you’re actually paying out of your investments?
Canada Life does not provide a dollar value of the fee taken from each investment options nor is it shown as a transaction on the account as the fees are taken directly from the entire fund balance, also known as the Gross Annualized amount.
Current IMFOE’s under CEIRP are on average 0.567% of the entire investment holdings per portfolio. This IMFOE rate is far below market average. Net unit values and Investment Management Fees and your rate of return are available on mycanadalifeatwork.com.
A daily factor of the Investment Management Fee and Operating Expense (IMFOE) that is published on GRS Access is applied to each fund each day, ie: the annual IMFOE of the Cadence 2040 is 0.567%; a daily factor will be 0.567/365.25 that works out to 0.001552%.
This percentage is then taken from that fund on a daily basis. The net performance (after fees) of the fund in your account can be seen through the personal rate of return published on GRS Access. The personal rate of return considers the opening balance of the fund, less the daily IMFOE deduction, plus deposits, less withdrawals, plus/minus the appreciation/depreciation over the period.
The most important thing to understand is that the Investment Management Fee (IMF) is applied to the entire fund balance each day, not to any one individual’s account balance. This is the benefit of being in a Group Plan; everyone’s collective investments keep the IMFOE fees low, as opposed to what you might pay in a retail account through your bank or other financial firms.
If you require more information, arrange to speak with an Investment & Retirement specialist by contacting the Canada Life call centre at 1-800-724-3402.