Québec City, February 9, 2011 – In Québec City, Yvon Bolduc, President and Chief Executive Officer of the Fonds de solidarité FTQ (the “Fonds”), and René Hamel, President and Chief Executive Officer of SSQ Financial Group, announced a partnership leading to the creation of 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™
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.
“Long-standing Fonds shareholders can now remain with us, knowing that they are enrolled in a safe payout product and that they will continue to receive the same quality service,” said Fonds CEO Yvon Bolduc.
“In the past, Fonds shareholders who had to roll over their RRSP to a RRIF had to do all the legwork themselves, in other words, shop around and compare the countless products on the market. Now they have an attractive turnkey solution from SSQ Financial Group and SÉCURIFONDS™. We’re proud to be able to help Québec workers protect their lifelong savings,” stated SSQ Financial Group’s CEO, René Hamel.
The savings rate is still a problem
“The situation is worrisome. The debt level keeps climbing, Quebecers still have a very low savings rate and the public plans are not enough for a comfortable retirement. In fact, according to the Régie des rentes du Québec, the retirement age for Quebecers is one of the lowest in the world while their life expectancy is among the highest, meaning more time spent in retirement. In this context, the Fonds believes it is playing an influential role by encouraging workers to adopt good retirement savings habits with a solution that’s accessible to everyone thanks to the 30% in additional tax credits. This is also a good investment for the governments, which recover the cost of the tax credits in about three years according to a study conducted by SECOR1,” added Mr. Bolduc.
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 $100,0002 in 25 years in a Fonds RRSP, the outlay would be just $22,000 or $880 net per year. Compare that with $67,5003, which is how much a worker would save if the money were placed in another investment vehicle such as a Canadian balanced mutual fund.
An RRSP that pays off
Factoring in the additional 30% in tax credits, a Fonds shareholder who invests the same amount each year by way of payroll deduction would have earned a compound annual return of 10.5%4 over 7 years and 7.9%4 over 10 years, beating out the 4.1% average return generated by Canadian balanced mutual funds.5
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.
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.
About SSQ Financial Group
With $2 billion in annual revenue and close to $5 billion in assets under management, SSQ Financial Group is a leading mutual diversified financial institution. The Group serves over 1 million customers and provides jobs to more than 1,600 employees. SSQ, Life Insurance Company Inc., the Group's principal company, is recognized as a leader in the group insurance industry and as an expert in the investment and retirement sector. SSQ Financial Group is also a rising star in home and auto insurance (SSQ General Insurance Company Inc.).
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
Élaine Dumais
Communications Director
SSQ Financial Group
Telephone: 418 652-6292 Cell: 418 955-7562
E-mail: elaine.dumais@ssq.ca
1 “Portraits des investissements du Fonds de solidarité FTQ et analyse de leur impact économique,” SECOR and Regional Data Corporation, June 2010.
2 Assuming a year-end contribution and an annual compound return of 3%.
3 Assuming a year-end contribution and an annual compound return of 5%.
4 As at November 30, 2010; these returns do not factor in the RRSP tax deductions.
5 Canadian neutral balanced funds compiled by globefund.com.