Saint-Jérôme, February 17, 2011 – Passing through the Laurentides, Yvon Bolduc, President and Chief Executive Officer of the Fonds de solidarité FTQ (the "Fonds"), expressed concern about the low savings rate and growing indebtedness of Quebecers. Underscoring the fact that contributing early to a retirement plan can make a big difference down the road, Mr. Bolduc lamented that Québec workers have still not developed the habit of saving, as evidenced by the very low number of RRSP holders in the province.
The savings rate is still a problem
"Public plans alone are not enough for a comfortable retirement. With such an accessible solution, the Fonds is playing an influential role by encouraging workers to adopt good retirement saving habits. For instance, including the effect of the tax credits, Fonds shareholders earned 7.9%1 over 10 years on their investment, which beats out the 4.1%2 average return generated by Canadian balanced mutual funds. And besides the attractive return, our owner-shareholders have the satisfaction of knowing that they are helping to further the growth of such great companies as La Petite Bretonne in Blainville, Hotel Esterel through Gestion hôtelière Revpar, which contributed to the financing of the renovation, and Sonaca Montréal in Mirabel. In fact, over the years, the Fonds and its network have invested close to $400 million in the Laurentides, making a solid contribution to the region’s economic development," affirmed Mr. Bolduc.
Earlier retirement for Quebecers means they need a bigger nest egg
Given that the retirement age here is one of the lowest in the world and life expectancy is one of the highest, Quebecers will spend more years in retirement and hence have greater financial needs. Considering the Régie des rentes’ projection that the ratio of contributors to beneficiaries will drop from 3 to 1.5 by 20403, today’s workers must prepare themselves better for their golden years by contributing to complementary plans.
Saving doesn’t have to be a struggle
The Fonds de solidarité FTQ is calling on all Quebecers, especially young workers, to acquire good saving habits. The 30% in additional tax savings provided by the Fonds RRSP makes it easier for people to save by minimizing the impact on their budgets. For example, to save $100,0004 in 25 years in a Fonds RRSP, the outlay would be just $22,000 or $880 net per year. Compare that with $67,5005, which is how much a worker would save if the money were placed in another investment vehicle such as a Canadian balanced mutual fund. 2
2011 RRSP campaign
For the current fiscal year, the Fonds can issue an unlimited number of shares, which are available to all and can be purchased in three easy ways: payroll deduction, preauthorized withdrawal or a lump-sum payment. The additional labour-sponsored fund credits amount to 30% and are available for investments of up to $5,000 per year.
SÉCURIFONDS™: a new financial product for retirees
On February 9, the Fonds de solidarité FTQ and SSQ Financial Group announced a partnership creating SÉCURIFONDS™, a new payout product designed for retirees. Administered by SSQ Financial Group, SÉCURIFONDS™ is a balanced segregated fund RRIF that invests in safe stocks and bonds and that offers a 100% principal guarantee at maturity or in case of death, subject to certain conditions.
SÉCURIFONDS™ was designed especially for retired Fonds shareholders who have to roll over their RRSP savings to another investment vehicle. Funds transferred to SÉCURIFONDS™ are invested in a balanced segregated fund, registered in a RRIF (Registered Retirement Income Fund).
SSQ Financial Group is the administrator of SÉCURIFONDS™. With this agreement, the Fonds de solidarité FTQ can offer a safe, attractive solution to retiree shareholders who wish to convert their RRSP to a RRIF. 3
About the Fonds de solidarité FTQ
The Fonds de solidarité FTQ helps drive our economy. With net assets of $7.7 billion as at November 30, 2010, the Fund is a development capital investment fund that channels the savings of Quebecers into investments in all sectors of the economy to help further Québec's economic growth. The Fund is a partner, either directly or through its network members, in 2,052 companies. With its 577,511 owner-shareholders, it has helped, on its own or with other financial partners, to create, maintain and protect 150,133 jobs. For more information, visit www.fondsftq.com.
Note: The telephone numbers provided below are only for the press and other media representatives.
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Sources: Josée Lagacé Senior Advisor, Press Relations and Communications Fonds de solidarité FTQ Telephone: 514 850-4835 Cell: 514 707-5180 E-mail: jlagace@fondsftq.com
1 As at November 30, 2010; this return does not factor in the RRSP tax deductions.
2 Canadian neutral balanced funds compiled by globefund.com.
3 Les tendances en matière de régimes de retraite, Colloque Question Retraite, September 30, 2010, published by the Régie des rentes du Québec.
4 Assuming a year-end contribution and an annual compound return of 3%.
5 Assuming a year-end contribution and an annual compound return of 5