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THE HERALD Wednesday October Page Money Matters Group pension plans of future By PAUL J ROCKEL Ouch 1 Even with Canada Pension Plan Old Age Security and the Guaranteed Income Supplement a very large number of our senior citizens are living below the line At best these programs replace only about one quarter of a per son earnings Today there s a relatively new phenomenon in the pension benefit or retirement benefit field It is a Group and that is exactly what it is It is a whole lot of people with one employer opening individual s in their name but having their employer deduct the monies every payday and sending one che que to pay for everybody each month That s why it s called a Group RRSP What are the advantages both to the employee and the employer It costs the employer nothing if he a small employer and can not afford to contribute other than the costs of payroll deduction and the employee time it takes to do the calculations prepare the list and send the cheque It gives flexibility to the employee He or she can choose ANY amount of contribution up to the mandated max imum Furthermore it is not fixed An employee may choose to con tribute 10 per cent this year then cut back to per cent next year and so on or cut back or increase at ITS YOUR MONEY Paul J any time Also with the new RRSP rules a taxpayer will be allowed to carry forward unused con tributions for seven years nan strapped workers can put off contributions till later when they might have higher es or lower expenses Employees are not locked into a fixed amount of contribution 3 It is per cent vested the employee belongs to him or her If the employee leaves or the firm shuts down the full value of the Group RRSP his or her name belongs to the employee to take to a new employer to continue or to keep up on their own to cash or do whatever they wish Some firms that offer Group have programs whereby the employee can choose between vanous investments or combna tions of investments such as GIC s Canada Savings Bonds and mutual funds They also can change the investments any time they wish 5 There is little or no set up cost whereas a regular pension has substantia set up costs 6 An employer can contribute to the plan also if and when he feels Georgetown District Memorial Hospital NOTICE of Board of Directors Meeting An opening meeting of the Georgetown District Memorial Hospital Board of Directors will fake place on THURSDAY OCTOBER 25 1990 AT 415 PM IN THE HOSPITAL BOARD ROOM The agendo will be posted by a the day of the meeting in the administrative offices Those wishing to address the board must forward a request in writing to the Chairman of the Board of Directors by October 19th 1990 GEORGETOWN DISTRICT MEMORIAL HOSPITAL Princess Anne Drum Georgetown L7G268 SHOPPING SPREE VALUE STORE LIVING LIGHTING MATCHING HALL CLOSE UP Reg 99 VALUES EFFECTIVE TO CLOSING OCT 27 245 GUELPH STREET Georgetown 873 the company can afford it It can be increased in profitable years or decreased in difficult years The amount if any is completely flexi bit- Let s suppose an employer opted for such a plan and a young employee aged earning 25 per year decided to contribute 8 per cent of his income to his Group This would amount to 2 per year Because it is tax it would probably only cost the employee w th being contributed by the government in the form of a tax deduct Supposing the young person chose a mutual fund investment that averaged per cent per vear SERVICE WE DO SERVICE And Repairs On All Computer Equipment Service Contracts Available the funds have averaged that over the long term Without increasing the contribu tion amount his value at age 65 based on an annual return of per cent would be If it were compounded monthly which would actually be the case the value would be 169 321 slightly over million This illustrates the result of dollar cost averaging in mutual fund investing We believe that group will be the pens on plan of the future and they are here today Wow what if all employees chose mutual funds For more information on Group contact Peter 10 Drive Georgetown Ont Or phone 877 Paul J Rockel Is the author of the best seller Why I Invest In Mutual Funds and President of Regal Capital Planners Ltd and Regal Capital Insurance Agencies Ltd GIC RATE 1185 Rate Subject To Change Without Notice MONEY CONCEPTS DARE TO COMPARE you to compare 416874325 I 416 Guelph On Georgetown Simon CHARTERED ACCOUNTANT Phone 416877 Mam Street South 5 Georgetown Ontario 8770109 Liberty Mutual Insurance your current homeowners LIBERTYMUTUAL INSURANCE FREE HOMEOWNER QUOTATION Home currently insured for Masonry Frame Year house was built Name Phone Address City Province Postal Code Liberty Mutual Insurance Company Brian Rosa 148 Queen Street East Brampton Ontario L6V 1B2 4548680 Canada Believes In Liberty Mutual Insurance In Htad O