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Don’t leave money on the table…take control of past employer savings plans!

Brendan Greenwood CIM, QAFP, B.Comm | August 21, 2020

Have you worked for more than one employer throughout your career or are you in the process of making a transition to a new employer? Now is the time to take inventory of any employer savings plans you left behind. I have seen countless cases where plans have been forgotten and subsequently performed poorly.

Forgetting about a plan with a past employer and leaving it with the financial institution that administers the plan can cost you a lot of money. These plans are typically mass marketed, with a limited choice of investment options and typically chosen more for downside protection than upside potential. The holder of these forgotten funds can often end up with very significant sub-par performance. Even a relatively small difference between the performance of the fund relative to its peers can make a big difference in value over time. If you have invested funds that you have forgotten about take the time to review the performance and if you are not happy with what you find take control of the situation. 

There are thousands of investment funds in Canada and not all are created equal. The chart below highlights the difference in growth of a $100,000 investment between two different well-known global equity funds. Better performance over time can make a big difference in the end value.

If your employer offers a company sponsored retirement savings plan with any sort of employer contribution and or matching formula it makes sense to take full advantage of the program. This is a great way to build substantial retirement savings. However, it also makes sense to periodically assess performance and take action if you are not happy with what you find. Either by moving to new funds or seeking a new source of advice. This is especially true when you leave your employer or rediscover forgotten investments.

To make better choices from the thousands of available investment options consider moving your underperforming or forgotten Group RRSPs or Defined Contribution Plan to a self-directed RRSP or Locked-in RRSP with the help of an independent experienced advisor. You will thank your future self you did!

Brendan Greenwood is an Investment Advisor with Worldsource Securities focused on personal pension strategies and leveraging technology to provide progressive institutional style investment solutions for professionally incorporated individuals, business owners, tech professionals and retirees.

For other articles authored by Brendan Greenwood on issues impacting business owners and investors see

Commissions, trailing commissions, management fees and expenses all may be associated with mutual fund investments. Please read the fund facts before investing. Mutual funds are not guaranteed, their values change frequently and past performance may not be repeated.

This material has been prepared for informational purposes only and should not be considered personal investment advice or solicitation to buy or sell any securities. As well, it is not intended to provide, and should not be relied on for, tax, legal or accounting advice. It may include information concerning financial markets as at particular point in time and is subject to change without notice. Every effort has been made to compile it from reliable sources, however, no warranty can be made as to its accuracy or completeness. Investors should seek appropriate professional advice before acting on any of the information here. The views expressed here are those of the authors and writers only and not necessarily those of Worldsource Securities Inc., its employees or affiliates. There may also be projections or other "forward-looking statements." There is significant risk that forward looking statements will not prove to be accurate and actual results, performance or achievements could differ materially from any future results, performance or achievements that may be expressed or implied by such forward-looking statements and you will not unduly rely on such forward-looking statements. Before acting on any of the information provided, please contact your advisor for individual financial advice based on your personal circumstances. Worldsource Securities Inc., is the sponsoring investment dealer and the member of Investment Industry Regulatory Organization of Canada and the Canadian Investor Protection Fund. 

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