Sunlife financial pension plan help

[spruikah]

(26 M)My current employer offers a pension plan through sunlife financial and I am looking for some advice on what funds are worthwhile? They offer;
SLF MONEY MARKET(GM3)
BLK bond index fund(DNB)
PH&n bond fund(HPW)
CC&L group income&growth(hme)
Investco income growth C(HCA)
B.G. canadian equity(DSA)
BLK S&P/TSX COMP INDEX(DME)
CC&L Cdn small cap fund (KF6)
CC&l group CDN Q growth(LIW)
JF CANADIAN EQUITY FUND C(jpp)
BLK EAFE equity index(GWN)
BLK US equity index reg(HQI)
FIDELITY US focused stock(G9K)
Investco global Co fund C (HFX)
Investco global R E listed (jc1)
MFS intl equity(PCA)

from what I can tell they all have really high fees and awful return rates

 

[davetownsend]

@spruikah

from what I can tell they all have really high fees

Where are you seeing the fees? The fees in group plans are negotiated between the employer and the financial institution. So different group plans may have different fees for the same fund. Usually you'll be given a website you can log in to to see the fees for your particular plan. Is that where you are looking?

And you have 4 basic BLK (Blackrock) index funds. You should be able to make a reasonable index fund portfolio with them. But I don't know if you understand the previous sentence. It's difficult to give you good advice without knowing what your knowledge level is.

 

[spruikah]

@davetownsend Sorry, fees isn't the word I was looking for. I was thinking of the management expense ratio.
My knowledge level is definitely novice, but I know the basics of how investing works. So far my general plan is to put %75 in the BLK S&P/TSX COMP fund and the rest into a Canadian focused fund

 

[rott2002]

@spruikah The MER is generally negotiated between your company and sunlife (though sometimes they just make a different set of funds available). Sunlife if you were to have a personal RRSP account with them would be typically a MER of 1.5-2.x. Though a company plan it can be lower than 1%. Not fantastic, but not always as bad as you think.

 

[davetownsend]

@spruikah

BLK S&P/TSX COMP fund

Are you aware that this is a Canadian equity fund? (It's not an S&P 500 index fund, if that's what you think it is). So you're considering investing 100% in Canadian equity.

Sunlife has likely provided you with a tool to determine your risk tolerance and provide a recommend portfolio for your risk tolerance. You may want to use that if you aren't familiar with putting together your own portfolio.

 

[wvc]

@spruikah The products don't all have "awful rates of return" relative to the market. Don't confuse absolute vs relative return. Funds that are created for long term growth will be down when markets are down.

For the fees, the index funds will have relatively modest fees. If your employer offers a matching contribution then its well worth it.

 

[lineman]

@spruikah These Insurance co fund programs are awful as are the websites they run. One employer had a matching RBC self directed account which was amazing but most have these brain dead insurance mutual funds.

What you choose may depend on what you have in your other accounts (TFSA, RRSP, non-registered, Real-estate, etc). For example, if you don’t have bonds in other places, this may be a good spot to have some bonds. I normally choose the index fund option if they have one since most funds net of fees won’t beat the index and the MERs are lower on those.

After a few years when the funds build up, I normally transfer out of the dumb insurance co funds and into my own self directed RRSP. Some companies charge a stupid high fee for that though.