The mission of a socially responsible investor such as the Fonds is twofold, and the impact of its activities reflects this. Of course, the Fonds invests in the Québec economy, but the money invested is the money of thousands of Quebecers who are saving for their retirement. The Fonds not only encourages hundreds of thousands of people who would very likely not contribute regularly to another RRSP to prepare for a better retirement, but it also gets them involved in Québec’s economic development. No other individual retirement savings vehicle devotes as much money to financing companies. Today it’s called “socially responsible investment,” but, as explains Denis Leclerc, Executive Vice-President, Shareholder Services, “when the Fonds was created 30 years ago, it was simply our mission!”
What were the results for the last financial year in terms of subscriptions?
Total contributions for 2013-2014 were $787 million, the third best year in our history! The Fonds now has 613,958 shareholders, Quebecers who have renewed their trust in us or chose us for the first time because the Fonds de solidarité FTQ is strong and reliable.
Yet the Fonds was in the media a lot in 2013-2014. How do you explain how this “media crisis” had such little negative impact on the RRSP campaign?
The impact on the RRSP campaign was minimal, true. Less than 2% of the calls that Shareholder Services received during this period were related to the media crisis. Our shareholders and Quebecers gave credit where credit was due. The Fonds de solidarité FTQ is an institution that is close to the people, and for 30 years we have built strong ties with our shareholders. The direct and personalized human contact that marks our relationship with them is the foundation of our success.
Mobilizing our employees and our network of local representatives (LRs) was critical to this last year’s success. We made 75% more calls to shareholders to make sure of their loyalty to the Fonds. Our LRs increased activities in their workplace to explain to people that the Fonds RRSP remains one of the most advantageous retirement savings vehicles for them, especially when they select systematic savings.
Will Québec’s savers still be eligible for the 30% tax credit in 2014?
Absolutely! The federal government’s phase-out of the tax credit will only start with the 2015 tax year. And we are continuing our efforts to convince the Canadian government to reverse its decision. The opposition parties in Ottawa have understood the importance of the Fonds’ impact— subscriptions to its RRSP and its investments—on the Québec economy.
The Fonds share issues are capped at $650 million for one year. What impact will this have?
True, the Government of Québec announced in its 2014-2015 budget that the issues of shares giving rise to a tax credit by the Fonds would be capped at $650 million for the financial year ending May 31, 2015. But shareholders should rest assured: this limit will have no impact on the share value, the Fonds’ return or the Fonds’ ability to redeem shares.
To avoid being affected by this limit and thereby be certain they can buy shares and fully benefit from the tax credits related to the Fonds RRSP, Quebecers who generally contribute through lump-sum payments can sign up now for systematic savings, which is contributing through payroll deduction or pre-authorized withdrawals. Since shares are set aside for individuals who contribute through one of these two methods, those who do so will not be impacted by the limit.
Did you improve the share redemption mechanisms in the last financial year?
We are continuously improving our Purchase-by-Agreement Policy, but it is worth noting that we cannot change this policy as we please; we must comply with the Québec Ministry of Finance’s regulations governing share redemptions. The Fonds redeems shares from shareholders at important stages in their life other than retirement, such as when buying a house or going back to school. Redemptions also happen in difficult times, such as job loss or disability. In the last financial year, under the “Loss pertaining to principal residence” criteria, the Fonds added damages caused to homes by pyrrhotite (a mineral that swells and cracks concrete when exposed to air and humidity); shareholders can now take advantage of this option.
Is the Fonds RRSP still available throughout Québec?
Yes, everywhere! During RRSP campaigns, we have many service points throughout Québec. People are also subscribing more and more through our website; there’s even a mobile platform they can use! Payroll deduction or pre-authorized withdrawals are still just as popular, and for those who wait until the last minute during the campaigns, lump-sum subscriptions also remain an attractive option.