Investment Jargon
Not sure what a word means? This is your one-stop guide to definitions of common financial terms.
A B C D E F G H I J K L M N O P Q R S T U V W X Y Z
A
Access ID
Account Balance
Active Member
Additional Voluntary Contributions (AVCs)
Address Change
Adjusted Cost Base (ACB)
Adjusted Cost Base - ACB, Stock Plan
Annual Return
Annualized Return
Annuitant
Annuitant, Contingent
Annuity
Annuity, Deferred
Annuity, Guaranteed
Annuity, Joint
Asset Allocation
Asset Allocation Programs
Asset Classes
Asset Mix
AVC
Average Final Earnings
B
Balanced Funds
Before-Tax Dollars
Benchmark
Beneficiary
Beneficiary, Absolute or Irrevocable
Beneficiary, Change
Beneficiary, Contingent
Benefit
Benefit Formula
Bond Funds
Bonds
Book Value
Book Value, Stock Plan
Break in Service
C
Canada Customs and Revenue Agency (CCRA)
Canada Pension Plan (CPP)
Canadian Equity Funds
Capital Gains or Losses
Carrier
Cash Investments
Cash Surrender Value
Charges
Commuted Value
Compensation
Compound Interest
Compulsory Plan
Consumer Price Index (CPI)
Contingent Beneficiary
Continuous Service
Contributory Pension Plan
CPP
Credited Service
Currency risk
D
DBPP
DCPP
Death Benefit
Deferred Annuity
Deferred Profit Sharing Plan (DPSP)
Defined Benefit Pension Plan (DBPP)
Defined Contribution Pension Plan (DCPP)
Department of National Revenue (DNR)
Derivatives Risk
Disability Pension Benefit
Disposable Income
Diversification
Diversified Funds
Dividend
Division of Pension Credits
Dollar Cost Averaging
DPSP
E
EAFE
Earnings
Effective Date
Eligibility Requirements
Employee Contribution
Employee Profit Sharing Plan (EPSP)
Enrolment
Entry Age
EPSP
Equity Fund
Expenses
F
Fees
Fixed Income Fund
Foreign Equity Funds
Forfeiture
Funds
G
GARP
GIC
Government Program
Group Registered Retirement Saving Plan (Group RRSP)
Growth
Growth at a Reasonable Price (GARP)
Growth Fund
Guaranteed Annuity
Guaranteed Funds
Guaranteed Income Supplement (GIS)
Guaranteed Investment Certificate (GIC)
Guaranteed Maturity Unit Value
H
Home Buyers' Program
I
Index
Index Fund
Indexing
Inflation
Interest Rate
Interest Rate Risk
International Fund
Investment Funds
Investment Choices
Irrevocable Beneficiary
L
Large Cap versus Small Cap Funds
Leave of Absence
Leaving the Plan
LIF
Life Expectancy
Life Income Fund (LIF)
Load
Locked-In Retirement Account (LIRA)
Locked-In
Locked-In Retirement Income Fund (LRIF)
M
Market Value Adjustment (MVA)
Market Value
Money Market Funds
Money Purchase Pension Plan
Mutual Fund
MVA
N
Non-Contributory Plan
Non-Registered Savings Plan (NREG)
Normal Retirement Age
Normal Retirement Date
NREG
O
Old Age Security (OAS)
P
PA
Password
Past Service
Pension
Pension Adjustment (PA)
Pension Benefits Acts (PBAs)
Pension Plan
Pensionable Earnings
Pensionable Service
Personal Identification Number (PIN)
Plan Sponsor
Policyholder
Pooled Fund
Pooling
Portability
Power of Attorney
Present Value
Profit Sharing Pension Plan
Projected Pension Benefits
Pro-rate
Public Pension Plan
Q
Qualification Date
Quebec Pension Plan (QPP)
R
Registered Pension Plan (RPP)
Registered Plan
Registered Retirement Income Fund (RRIF)
Registered Retirement Savings Plan (RRSP)
Required Contributions
Retirement Income
Retiring Allowance
Return
Revenue Canada
Risk and Return
RRIF
RRSP
RRSP Contribution Limit
S
S&P/TSX Composite Index
Salary Scale
Savings Plan
Sector Rotation
Segregated Fund
SC 91 Day T-Bill Index
SC Universal Bond Index
Short-term Trading
Specialized Funds
Spill Limit
Spousal RRSP
Spouse's Pension Allowance
Stocks
Surviving Spouse Benefit
Survivor Benefit
T
Tax Credit
Tax Deductible
Tax Deferral
Tax Receipts
Tax Shelter
Taxes on Withdrawals
Termination
Transaction Fees
T-1007
T-2033
T-2037
T2151
T4A
U
Units
V
Value
Value Fund
Vesting
Voluntary Withdrawals
W
Waiting Period
Withdrawals
Y
Year's Basic Exemption (YBE)
Year's Maximum Pensionable Earnings (YMPE)
Access ID
Your Access ID can be found in the Welcome Letter you received when you first joined the plan, or on any
Account Statement we send you.
Account Balance
Your Account Balance is based on the previous business day's closing values. You can find this under the "Balances"
selection on this Plan Member website or via our interactive Customer Care phone system at 1-800-SUN-LIFE.
Active Member
An individual actively employed and currently making contributions to a Registered Pension Plan or Deferred
Profit Sharing Plan.
Additional Voluntary Contributions - AVCs
Additional voluntary pension plan contributions made by you in addition to the contributions that are required
under the plan. Extra benefits are purchased with the AVCs. Although AVCs are not locked-in, they are subject
to pension legislation and unless plan terms dictate otherwise, can only be withdrawn at death, termination
of service or retirement.
Address Change
You can change your address either online under MY ACCOUNT INFO>Personal Info if applicable to your plan,
by contacting a Sun Life Financial Call Centre Representative at 1-800-SUN-LIFE, or through your employer.
Adjusted Cost Base - ACB
For non-registered plans, the Adjusted Cost Base (ACB) of a unit of a particular segregated / trust fund or a share
of a stock, is the total dollar amount used to purchase units in that segregated / trust fund or shares, plus
the amount of income allocated from the segregated / trust fund or any reinvested dividends from shares,
minus the adjusted cost base of the units or shares previously sold, divided by the total number of such units
or shares held by you.
The ACB we provide is based on our records relating to your account. If you hold shares of the same stock outside
of the employee savings plan, it is your responsibility to combine all such shares for ACB calculation purposes.
Please consult your financial and/or tax advisor for assistance.
Adjusted Cost Base - ACB, Stock Plan
If you are a member of a stock plan, the adjusted Cost Base (ACB) is the amount of money that has been
contributed to the non-registered plan by you and/or your employer plus any reinvested dividends, if applicable,
minus the cost of the shares that have been withdrawn, if applicable.
The ACB we provide is based on our records relating to your account. If you hold shares of the same stock outside
of the employee savings plan, it is your responsibility to combine all such shares for ACB calculation purposes.
Please consult your financial and/or tax advisor for assistance.
Annual Return
Is a fund or plan return over a one-year period.
Annualized Return
An overall rate of return, usually over a period of two or more years, converted to an equivalent rate over each
one year period. For example, if you have a return of 9% in the first year, 4% in the second year and 18% in the third
year, this is averaged as a 10% return in each of the three years. So, 10% would be the 3-year annualized return.
Annuitant
An individual in receipt of an annuity payment (usually a monthly pension).
Annuitant, Contingent
(note: also under Annuitant, Joint)
Persons named to receive annuity payments if the primary annuitant dies. The contingent annuitant is usually
the spouse, and may also be referred to as the joint annuitant.
Annuity
An annuity is a contract that provides periodic payments to an annuitant, and is designed to continue for a fixed
period, or until death.
Annuity, Deferred
An annuity under which the first payment is not made until the expiration of a fixed number of years, or the
attainment of a stated age or a contract which includes an undertaking on the part of the insurer to provide
an annuity. A Deferred Annuity is frequently used to refer to a life annuity payable, at some future date,
to an employee whose membership in a pension plan terminated before the normal retirement age. Payments
usually start at normal retirement age.
Annuity, Guaranteed
An annuity which provides that payments are guaranteed for a specified length of time, and after that period,
for as long as the annuitant lives.
For example, under an annuity guaranteed for five years, if the annuitant lives for fifteen years, payments will
be made for the full fifteen years. However, if the annuitant dies after three years, however, the annuity will
be paid to a beneficiary for a further two years, until the payments have been made for a total of five years.
Annuity, Joint
Persons named to receive annuity payments if the primary annuitant dies. The contingent annuitant is usually
the spouse, and may also be referred to as the joint annuitant.
Asset Allocation
Asset Allocation refers to the way that you divide your portfolio between the various asset classes. It is the most
important way to diversify your investments, and diversification is the key to lowering your investment risk
(by not putting all your eggs in one basket, so to speak). Check out the "Tools" selection on this Plan Member
website and the online "Asset Allocation" calculator.
Asset Allocation Programs
Are similar to Balanced Funds in that they invest in all of the asset classes. However, they are usually part
of a series (or program) of funds, each fund appropriate for an investor with a different risk tolerance level.
Each one holds a different mix of stocks, bonds and cash, creating funds ranging from conservative to aggressive.
Asset Classes
A grouping of similar investments. For example, all of the following are different asset classes: Guaranteed Funds
and Money Market Funds, Bond Funds, Balanced Funds, Canadian Equity Funds (large cap to small cap),
American/International funds and single Stock funds.
Asset Mix
Describes the proportion of your investments that you currently have invested in each of the asset classes.
For example you might have 30% in bond funds, 40% in Canadian Equity Funds and 30% in foreign equity funds.
AVC
See Additional Voluntary Contributions.
Average Final Earnings
The amount of salary used to determine your accrued pension if you are participating in a "final average earnings
plan". The amount is calculated by taking the average of a specified number of years of annual salary just prior
to retirement.
Balanced Funds
(note: also under Diversified Funds)
Invests in a mix of stocks, bonds, and cash investments. The mix will change as market conditions change, but
it usually stays within a pre-determined ranges (for example, stocks 40-60%, bonds 30-50%, cash 0-30%). Many
Balanced funds invest in foreign stocks up to the maximum allowed by foreign content regulations.
Balanced Funds tend to be more risky than Bond Funds, but less risky than Equity Funds. The benefit of a Balanced
Fund is that it provides automatic diversification by investing in a variety of asset classes and thereby reducing
the risk if one asset class performs poorly.
Before-Tax Dollars
Money that enters your plan account before income taxes are calculated. Taxes are deferred until you receive
a payout from the plan.
Benchmark
An industry average of similar investments used to compare and evaluate the performance of other funds.
The S&P/TSX Composite Index is a common benchmark for Canadian Equity Funds.
The S&P 500 is a common benchmark for American Equity Funds.
The MSCI EAFE Index is common for International Funds.
The SC Universal Bond Index is a common benchmark for Fixed Income Funds.
SC 91-Day T-Bill Index is a common benchmark for Money Market Funds.
Beneficiary
The person or persons named by the plan member, in writing, to receive the policy or plan death benefit.
Beneficiary rules may vary by province.
See also Beneficiary - Absolute or Irrevocable
Beneficiary, Absolute or Irrevocable
An unalterable beneficiary - the owner relinquishes the right to change the designation without an approval
when such a beneficiary is named. For residents of Québec, a spouse beneficiary is automatically considered
irrevocable, unless otherwise stipulated. Sun Life Financial's application form allows a plan member to indicate
that the designation is revocable.
Beneficiary, Change
(note: also under Change Beneficiary)
You can change your beneficiary either online under MY ACCOUNT INFO>Personal Info if applicable to your
plan, or, write to us and include your name, plan number and name of your employer. For legal reasons, we currently
require your signature on your request. We cannot accept faxes. Please mail your request to Sun Life Financial,
Group Retirement Client Services, 225 King Street West, 14th floor, Toronto, ON M5V 3C5.
Beneficiary, Contingent
An alternate beneficiary whose rights under a policy, or a plan will depend on the death of the original beneficiary
or some other condition or provision.
Benefit
A general term applied to any form of payment that may be made to a person under the terms of a pension
plan, depending on the circumstances.
Benefit Formula
A pension plan calculation that defines the method used to determine an employee's pension amount.
Bond Funds
(note: also under Fixed Income Funds)
Typically invest in bonds issued by Canadian governments and companies. As well as paying a rate of interest,
many bonds held in these funds also have a "market value" which can rise and fall. So Bond Funds have the
potential for higher returns than Money Market or Guaranteed Funds, but there is a greater risk of loss as well.
Bonds
(note: also under Fixed Income)
When you buy a bond, you are actually lending money to a company or the government. The borrower promises
to pay back the amount of the loan, plus interest, according to a specific schedule. Bonds are usually less risky
than stocks, but the market value of a bond, especially long-term bonds, can go up and down as interest
rates change.
Book Value
The book value of your investments under each registered plan is determined by the original/established
investment purchase price paid/set, and may include the amount of reinvested distributions (depending
on the type of investment), less the book value of any withdrawals. The book value is reported for your
information only.
Book Value, Stock Plan
If you are a member of a stock plan, the Book Value is the amount of money that has been contributed
to the registered plan by you and/or your employer plus any reinvested dividends, if applicable, minus the cost
of the shares that have been withdrawn, if applicable. The book value is reported for your information only.
Break in Service
An interruption in employment for reasons other than those allowable and explained under the terms of the
pension plan. Please see your plan booklet for details.
Canada Customs and Revenue Agency - CCRA
(note: also under Revenue Canada and Department of National Revenue)
The federal government body with which pension plans must be registered for contributions to be tax deductible.
Formerly Revenue Canada or the Department of National Revenue.
Canada Pension Plan - CPP
A government pension plan that provides a monthly pension benefits for Canadians who have contributed
to the plan. Benefits available include: retirement income; survivor benefits for widows, widowers and orphans;
and a death benefit. The act operates in all Canadian provinces except Quebec where a separate plan the Quebec
Pension Plan, with similar benefits and contributions is in effect.
Canadian Equity Funds
Invest primarily in stocks of Canadian companies. Some of these funds may invest up to 30% of their assets
in stocks of companies located in other countries.
Because stocks have traditionally risen in value more than other types of investments, they offer the greatest
potential for long-term growth. However, with stock prices fluctuating more than other types of investments,
investing in stocks is also riskier.
Capital Gains or Losses
An increase or decrease in the value of an account. Any transaction in a non-registered account could incur capital
gains (market value less book value) or losses. If so, you are required to report the gain/loss as income. If you
are allowed to withdraw money from your registered account, the entire withdrawal becomes taxable to you.
Carrier
General term used to refer to an insurance company, trust company or other financial institution with responsibility
for some or all functions under a group retirement and savings plan, usually including investments.
Cash Investments
Cash investments usually take the form of guaranteed funds (also known as GICs), short-term deposits
or government treasury bills. Cash investments are designed to protect your money while earning a current
rate of return. The value of a cash investment doesn't vary widely, so it is less risky than stocks or bonds.
Based on past performance, cash investments tend to provide lower returns over the long term than the other
asset classes. While stocks and bonds have a greater risk of declining in value over the short term, the risk
of a loss lessens considerably the longer you own them.
See also Guaranteed Investment Certificates
Cash Surrender Value
The amount which a policyholder may be permitted to collect, in cash, upon surrendering a policy before it matures.
Charges
Depending on plan rules, you may be required to pay Investment Management Fees for the funds you invest
in. You may also be required to pay administration fees. Check your plan booklet for more details.
Commuted Value
A single amount of money which represents the current worth of future benefits payable. The future benefits
are discounted to the present to obtain the commuted value.
Compensation
The salary or wages received by an individual from an employer in the year, plus any other amounts that must
be included when calculating the person's annual taxable income from that employer.
Compound Interest
Interest credited to the investor at a set rate, on specified dates, and added to the original deposit to earn further
interest. Usually interest compounds annually.
Compulsory Plan
A pension plan that eligible employees must join as a condition of employment.
Consumer Price Index - CPI
The Consumer Price Index measures the cost of various goods and services. It is used to determine the rate
of inflation. In other words, the percentage of change in the CPI over a given year is the annual inflation rate.
Contingent Beneficiary
See Beneficiary, Contingent
Continuous Service
The period during which the same employer continuously employs a plan member. This may be defined in a pension
plan (or by law) so as to include certain periods of absence, and service with an associated or previous employer.
Contributory Pension Plan
A pension plan that allows members to make contributions to qualify for plan benefits. Some plans require that
members contribute regularly. The members' contributions are usually related to their earnings.
CPP
See Canada Pension Plan
Credited Service
The period of service (as defined by the pension plan) that is used for such purposes as determining benefit
amounts, entitlement to plan benefits and/or vesting.
Currency risk
Currency risk refers to changes in value of securities in response to changes in value of the Canadian dollar
versus foreign currencies. A strengthening of the Canadian dollar tends to reduce the Canadian dollar value
of foreign investments for Canadian investors; a weakening of the Canadian dollar tends to increase the Canadian
dollar value of foreign investments for Canadian investors.
DBPP
See Defined Benefit Pension Plan
DCPP
See Defined Contribution Pension Plan
Death Benefit
When applied to a pension plan, the sum of money paid in the event that a member of the plan dies before
the pension commences.
Deferred Annuity
See Annuity - Deferred
Deferred Profit Sharing Plan - DPSP
A profit sharing plan under which the employer contributions are deductible under the Income Tax Act, but are
not taxable in the hands of the employee until they are withdrawn. Employee contributions are not permitted.
Defined Benefit Pension Plan - DBPP
A registered pension plan which provides a certain level of income at retirement. The amount of retirement
income is calculated using a pre-determined formula.
Defined Contribution Pension Plan - DCPP
A Defined Contribution Pension Plan is also known as a Money Purchase Pension Plan. Employer contributions
and employee contributions (if the plan permits them) are directed into an individual account for each employee.
Contribution levels are usually expressed using a specific formula related to earnings such as 5% of annual salary.
When the employee reaches retirement, the accumulated contributions and investment earnings are used
to purchase a pension for the individual. No specific income level can be guaranteed with this type of plan.
Department of National Revenue - DNR
(note: also under Revenue Canada and Canada Customs and Revenue Agency (CCRA))
The old name for a department of the federal government with which pension plans must be registered for
contributions to be tax-deductible. The new name is the Canadian Customs and Revenue Agency.
Derivatives Risk
A derivative is a contract between two parties, the value of which is based on the performance of an “underlying”
asset, such as for example a stock, commodity, currency, or market index. Derivatives may be used to gain a right
to buy or sell the underlying asset on a certain future date as well as to limit, or “hedge against”, losses that
may occur because of an investment in a security or exposure to a currency or market.
Risks associated with derivatives include the following:
•
•
•
•
•
•
the hedging strategy may not be effective;
there is no guarantee that a derivatives contract can be bought or sold when desired;
the price of a derivative may not accurately reflect the value of the underlying asset;
the cost of the derivative contract may increase;
the other party to the contract may not be able to honour its obligations and may default;
the use of derivatives can amplify both gains and losses in a Fund.
Disability Pension Benefit
A pension payable to an employee who is unable to continue working due to a disability. This pension may be based
on service to the date of disability or, in some cases, based on past and prospective service (for example,
a pension equal to what would have been received had the employee remained in service until normal
retirement age at the last salary).
Disposable Income
Generally, a person's income from all sources, minus income taxes and other necessary expenses.
Diversification
Diversification is a strategy that helps reduce the risk associated with investing. When you diversify your holdings,
you spread them over a range of investments by choosing different funds or different types of investments
to balance your risk exposure.
If you belong to a retirement plan that directs all of its investments into guaranteed funds or a single stock fund,
you may want to vary the holdings in your personal portfolio to establish a broader blend of investments.
Equity funds add an additional component of diversification for you since each fund contains a mixed portfolio
of investments. One of our equity funds typically holds stocks of fifty or more large companies as well as a small
selection of money market instruments.
By contributing to your group plan, you're diversifying your retirement contributions in two ways. You're choosing
from a mix of different funds available to you under your group plan. And, each market-based fund contains
a diversified portfolio of investments.
Diversified Fund
Also known as Balanced Funds, a Diversified Fund invests in a mix of stocks, bonds, and cash investments.
The mix will change as market conditions change, but it usually stays within a pre-determined range (for example,
stocks 40-60%, bonds 30-50%, cash 0-30%). Many Diversified Funds invest in foreign stocks up to the maximum
allowed by foreign content regulations.
Diversified Funds tend to be more risky than Bond Funds, but less risky than Equity Funds. The benefit of a Diversified
Fund is that it provides automatic diversification by investing in a variety of asset classes and thereby reducing
the risk if one asset class performs poorly.
Dividend
Dividends represent payments made by companies to their shareholders. Companies that issue stock may pay
dividends quarterly, semi-annually, or annually if they have earnings to distribute to shareholders.
Our equity funds hold the stocks of many firms and whenever these firms pay dividends, the payments are deposited
to the fund and distributed among the unit holders.
Division of Pension Credits
Also known as "credit splitting". A provision in the Canada Pension Plan or Quebec Pension Plan whereby one
spouse, on dissolution of a marriage or common-law relationship, may obtain an equal division of pension credits
earned under the CPP/QPP by one or both partners during the relationship.
This provision is now included in various pension benefits acts to apply to employer-sponsored pension plans.
Dollar Cost Averaging
Dollar Cost Averaging is a way that you can minimize the effects of an investment's volatility by buying it in regular
instalments, over a number of months or years.
It's easy to do, simply invest a set amount or a fixed percentage of your pay in a fund at regular intervals. The unit
price of the fund will be higher in some months, and lower in others. The average price you pay should
be somewhere in the middle.
Provided the investment gains value over the long term, you'll profit from your purchases during the short-term
price declines. Dollar cost averaging lets you use an investment's volatility to your advantage.
DPSP
See Deferred Profit Sharing Plan
EAFE
The EAFE is the Morgan Stanley Capital International, Europe, Australasia, Far East Index. The index reflects
the performance of a diversified portfolio of major non North American companies.
Earnings
A person's income from employment or self-employment, usually excluding such forms of income as rents or bond
interest. In some pension plans certain bonuses, sick pay, etc., may also be excluded from earnings in calculating
benefits and contributions.
Effective Date
The date that a retirement plan goes into effect and coverage starts.
Eligibility Requirements
Conditions that determine if an employee is eligible for membership in the group retirement plan.
Employee Contribution
Deductions from an employee's pay applied towards a pension plan or other company benefit.
Employee Profit Sharing Plan - EPSP
A profit-sharing plan under which employer contributions are tax deductible by the employer but declared
as income by the employee. Employee contributions are permitted but are not tax deductible. Payments out
of the fund are generally tax-free. Investment earnings are taxable as earned.
Enrolment
You may enrol online if offered by your employer. Please contact your employer or a Sun Life Financial Call Centre
Representative to request a Member Enrolment kit.
Entry Age
The age when a Plan Member was included in a pension plan, or would have been included if the plan had always
been in effect.
EPSP
See Employee Profit-Sharing Plan
Equity Fund
See Canadian Equity Fund or Foreign Equity Fund
Expenses
Depending on plan rules, you may be required to pay Investment Management Fees for the funds you invest
in. Please check your plan booklet or contact your employer for further information.
Fees
As a member, you are not required to pay transaction fees. You may however, depending on plan rules, pay a fee
for withdrawals and fund management fees. This will depend on your plan rules and you may find this information
in your enrolment kit.
Note: a 2% fee will be charged (and paid to the fund) when a plan member initiates an interfund transfer into
a fund followed by an interfund transfer out of the same fund within 30 days. The assessment of the fee
is subject to materiality for administration purposes. See Short-term Trading for more details.
Fixed Income Fund
Also known as Bond Funds, these funds typically invest in bonds issued by Canadian government and companies.
As well as paying a rate of interest, many bonds held in these funds also have a "market value" that can rise
and fall.
Foreign Equity Funds
Invest primarily in stocks of companies located outside of Canada. As with Canadian Equity Funds, historically
Foreign Equity Funds offer greater potential for long-term growth, but can be riskier than other types of investments.
One of the important roles of Foreign Equity Funds is in diversifying your portfolio. Canada's share of the world
equity market is only about 3%, so there are far more investment opportunities out-of-country than in.
By diversifying your equity investments globally, you spread your portfolio over a greater percentage of the world
market and reduce your overall investment risk.
Forfeiture
An employer contribution under a Defined Contribution Pension Plan or a Deferred Profit Sharing Plan, which
is given up by a Plan Member who terminates service before becoming fully vested in the Plan. In some plans,
forfeitures are re-allocated to other active Plan Members; in other plans they are used to reduce the employer's
cost. Canada Customs and Revenue Agency requires that forfeitures are used up or reallocated by December 31st
of the year following the year it arose.
Funds
(note: also under Investment Funds)
For most plans offered in your company Group Retirement and Savings Plan, fund information is available on this
Plan Member Services website. You can view and print reports pertaining to the funds available in your plan.
Fund information is also provided in the Member Enrolment kit when you first join the plan.
GARP
See Growth at a Reasonable Price
GIC
See Guaranteed Investment Certificate
Government Program
Any legislative program under which benefits (pensions, income supplements, etc.) are provided by a government
in its role as government rather than its role as an employer (e.g., Old Age Security, Canada Pension Plan,
Guaranteed Income Supplement).
Group Registered Retirement Saving Plan - Group RRSP
A savings or retirement plan sponsored by a company for its employees. A Group Registered Retirement Savings
Plan (RRSP) is subject to the same legislative rules as an individual RRSP.
Growth
The manager chooses stocks for the portfolio based on an assessment of a company's ability to grow its business
profitably. If the manager is right, the company's stock will increase in price as the company achieves business
and earnings growth.
Growth at a Reasonable Price - GARP
The manager looks for the stocks of growth companies that they can buy for a reasonable price. This is a combination
of value and growth investing.
Growth Fund
Consists of company stocks with better than average growth prospects. The investment manager of a growth
fund chooses stocks for the portfolio based on an assessment of a company's ability to grow its business
profitability. If the manager is right, the company's stock will increase in price as the company achieves business
and earnings growth.
Guaranteed Annuity
See Annuity, Guaranteed
Guaranteed Funds
When you invest in a Guaranteed Fund, you earn a set rate of interest that is guaranteed for a specific term,
so it's a very low-risk investment. There is a range of short and long-term rates available.
Guaranteed Income Supplement - GIS
A monthly payment under the Federal Old Age Security (OAS) Act to needy pension recipients. It is based
on a guaranteed minimum income amount.
Guaranteed Investment Certificate - GIC
A fixed-dollar deposit with a bank or other financial institution with a pre-determined rate of return
and maturity date.
Guaranteed Maturity Unit Value
The guaranteed maturity unit value reflects the fund’s highest month-end unit value to date. While the fund
is valued each business day and its unit value does fluctuate, you will receive the maturity unit value only
upon the fund’s maturity date. The maturity unit value is guaranteed by ABN AMRO Bank N.V. All transactions
prior to maturity will be processed at the fund's current unit value.
Home Buyers' Program
A program offered by the Canada Customs and Revenue Agency to help first-time home buyer's borrow funds
from their Registered Retirement Savings Plan to facilitate the purchase of a home. If you meet the eligibility
requirements, you are required to complete the Application for a First Time Homebuyer's Withdrawal (T1036).
This form is available at any Canada Customs and Revenue Agency office or any bank.
Index
The Manager uses a passive investment style by simply buying and selling assets to match the characteristics
of an index (i.e. S&P/TSX Composite Index). The performance of an index fund should be similar to the performance
of the index. Because of the passive style these funds tend to have lower management fees.
Index Fund
A fund whose investment manager uses a passive investment style by simply buying and selling assets to match
the characteristics of an index (i.e. TSE 300). The performance of an Index Fund should be similar to the performance
of the index. Because of their passive style, these funds tend to have lower management fees.
See also Consumer Price Index
Indexing
The periodic adjustment of a benefit amount (typically after retirement) according to a formula, usually based
on a recognized price or wage index such as the Consumer Price Index (CPI) or the Average Industrial Wage Index.
Typically, indexing involves increasing a payment to keep pace with increases in the cost-of-living.
Inflation
See Consumer Price Index
Interest Rate
The cost of borrowing money over a period of time. When you lend your money to a person or company,
you expect them to pay something in return. This is usually expressed as a percentage of the money loaned
and is referred to as the interest rate. If you're borrowing money, the interest on your loan goes to the lender.
International Fund
A fund that invests primarily in the common stock of companies based outside of Canada.
Interest Rate Risk
Interest rate risk refers to changes in value of fixed income securities, such as bonds, in response to changes
in interest rates. If interest rates rise, the value of the fixed income security tends to fall; if interest rates
fall, the value of the fixed income security tends to rise.
Investment Funds
(note: also under Funds)
For most plans offered in your company Group Retirement and Savings Plan, fund information is available on this
Plan Member Services website. You can view and print reports. Fund information is also provided in the Member
Enrolment kit when you first join the plan.
Investment Choices
On this Plan Member Services website, please select "About My Funds" to learn more. You will be able to read
information such as top ten holdings and performance charts to help you to make the fund choice that best
fits your needs.
Irrevocable Beneficiary
See Beneficiary - Irrevocable
Large Cap versus Small Cap Funds
Some funds invest exclusively in large companies (known as large capitalization or "large cap" funds), others
in small companies ("small cap" funds). The distinction is important because small cap funds tend to be higher
risk investments than large cap funds. The reason? Small companies are typically not as well established as large
companies and often have a shorter track record of success. And while the potential growth of smaller companies
offers the potential for greater returns over the long term, the short-term ups and downs can be significant.
Leave of Absence
Any absence from employment, approved by the employer, which would still qualify for pension service.
Leaving the Plan
(note: also under Termination)
Upon termination of employment, there maybe a number of options available to you depending on the type
of assets you have with us.
If you have non-registered assets, you may transfer them to a non-registered account with an external institution,
our Group Choices Plan or take the assets in cash.
If you have registered pension assets and they are locked-in, you can transfer the assets to a locked-in account
with an external institution, our Group Choices Plan, or purchase an annuity and transfer funds to another pension
plan if allowable.
If you have assets in an RRSP or DPSP, you may transfer those to an RRSP account with an external institution,
into the Group Choices Plan, take the assets in cash (less applicable taxes) or purchase an annuity.
LIF
See Life Income Fund
Life Expectancy
The number of years a person is expected to live based on current mortality statistics. Factors such as gender
and age are used in the calculation of mortality statistics.
Life Income Fund - LIF
A Life Income Fund (LIF) provides you with income during your retirement years. It is designed to hold savings
that originate from a Registered Pension Plan that are "locked-in" by pension legislation. The LIF is very similar
to the RRIF but there are two key differences:
In addition to the requirement for a minimum annual withdrawal (same minimum as for a Registered Retirement
Income Fund), LIFs also have a maximum withdrawal set by pension legislation. Your annual withdrawal must
be within these minimum and maximum amounts. You must convert your LIF to a life annuity (in most provinces),
when you reach age 80.
Load
The commission and other service fees charged upon the sale or purchase of mutual fund units. Generally, either
a front-end load (at the time of purchase), or a back-end load (at the time of sale) is charged.
Locked In Retirement Account - LIRA
A LIRA is essentially the same as a Registered Retirement Savings Plan, but only locked-in pension funds can
be accepted. In addition to purchasing a life annuity with the funds, the owner may transfer funds in a LIRA
to a Registered Pension Plan (RPP) if the RPP allows, another LIRA, a Life Income Fund or a Locked-in Retirement
Income Fund, if one exists.
Locked-in
Required contributions become unavailable (locked-in) after an employee has been a member of a pension plan
for a specific length of time.
Locked-in money can be used to purchase an annuity, a Locked-in Retirement Account/Locked-in Registered
Retirement Savings Plan, a Life Income Fund, or a Locked-in Retirement Income Fund.
Locked-In Retirement Income Fund - LRIF
An LRIF provides you with income during your retirement years. It is designed to hold savings that originate from
a registered pension plan that are "locked-in" by pension legislation. LRIFs are currently available in a limited
number of provinces. The LRIF is very similar to the LIF but there are two key differences:
The maximum withdrawal amount is calculated in a different way. It is generally equal to the investment earnings
in your LRIF in the previous year (or 6% of your LRIF balance in the first two years). There is no requirement
to buy a life annuity at age 80, although you are permitted to convert your LRIF assets to a life annuity at any time.
Market Value Adjustment - MVA
This term is used in connection with Guaranteed Funds. It describes the difference between the book value
of the amount guaranteed under a fund, and the market value amount that is actually paid when a guaranteed
deposit is withdrawn prior to maturity. The MVA may be positive or negative, depending on interest rates
at the time of liquidation.
Market Value
(note: also under Adjusted Cost Base)
Market value is the balance in the account after the funds invested have been valued. Book value is the amount
of money that has been contributed to the account, also know as the Adjusted Cost Base. The difference between
the book value and the market value determines if any capital gains/losses have been established which will
then be reflected on your T3 slip each year.
The ACB is reported to you for your information and for tax planning purposes. It is an estimate of the cost
base at this point in time. However, it does not include capital gains which may be allocated to you as a result
of Fund Realization as these values are only included at the end of each year.
Money Market Funds
Invest primarily in short-term (under one year) government treasury bills and corporate notes. Because they
are short term and issued mostly by the government or high-quality businesses, they are very low-risk and also
earn a fairly low rate of return.
Money Purchase Pension Plan
See Defined Contribution Pension Plan
Mutual Fund
A mutual fund combines the assets of many investors into a single pool. A professional investment manager
manages them. Our segregated funds usually invest either in units of a pooled fund or mutual funds.
MVA
See Market Value Adjustment
Non-Contributory Plan
A pension plan which does not require any employee contributions in order to qualify for benefits. The employer
makes all contributions.
Non-Registered Savings Plan - NREG
A savings plan under which contributions made by members is not tax deductible. Any withdrawals made from
such a plan are not taxable.
Normal Retirement Age
The age that employees are expected or entitled to retire, specified in a Registered Pension Plan. Often it is the
age at which benefits are first paid out of the plan without reduction penalties.
Normal Retirement Date
The earliest date a pension plan member may receive an unreduced pension or annuity on terminating employment
for any reason other than disability.
NREG
See Non-Registered Savings Plan
Old Age Security - OAS
A Canadian program that provides retirement benefits to those who qualify. Payment levels are adjusted to reflect
increases in the cost-of-living.
PA
See Pension Adjustment
Password
Formerly called PIN (for Personal identification Number).
A Password for Sign in to the Plan Members Services website was communicated to you in a Welcome Letter
when you first enrolled in the plan. If you have forgotten your Password you can click on the words, Forgot
My Password, under the Sign in area.
If you need assistance, call Sun Life Financial at the Call Centre number provided by your employer (if applicable)
or call 1-800-SUN-LIFE. If you are a member of the PSHCP or PDSP Plan, call 1-888-757-7427 or (613) 247-5100
(in the Ottawa area) for assistance.
Past Service
A service which has been recognized for pension purposes as rendered by the employee, to the employer,
prior to the inception of the plan or prior to the employee's entry into the pension plan. This is also referred
to as Prior Service.
Pension
A payment, or series of payments, paid to a retired employee.
Pension Adjustment - PA
The Pension Adjustment (PA) reflects the pension benefit accruing to a plan member during the year, under
an employer-sponsored plan. This amount is subtracted from the contribution ceiling (dollar amount) to determine
the member's maximum Registered Retirement Savings Plan contribution limit.
Under money purchase plans or Defined Contribution Pension Plan, the PA is simply the total of the employer's
and employee's required contributions, any Additional Voluntary Contributions made by the employee, and any
allocated forfeitures.
For Defined Benefit Pension Plans, the PA for a member is determined directly from the amount of benefit the
member earned in the year. The formula is 9 X the benefit accrual - $600 plus the dollar amount of any Additional
Voluntary Contributions made by the member.
Pension Benefits Acts - PBAs
Legislation governing plans registered through provincial pension commissions. The aim of the PBAs is to protect
the rights of plan members, and to ensure that promised benefits are provided.
Pension Plan
A plan which provides a regular income for retired employees for the rest of their lives. Many pension plans
also provide income for employees who have terminated employment, or who have a permanent disability
when they reach retirement age. Some plans provide for income to continue being paid to surviving spouses
of deceased members.
Pensionable Earnings
The portion of an individual's total earnings used in calculating the pension entitlement under a registered plan,
as defined in the plan document. In addition to basic salary, pensionable earnings may or may not include bonuses,
overtime payments, taxable benefits and so on.
Pensionable Service
See Credited Service
Personal Identification Number - PIN
See Password
Plan Sponsor
The individual(s) or company responsible for the contracting and administrative duties of the savings
or pension plan.
Policyholder
The policyholder is the person or sponsor to whom a contract is issued. In terms of a pension or savings plan,
this is likely your employer, labour union or trustee. In terms of an individual life insurance policy, or other
such contract, the policyholder is the person to whom the contract is issued.
Pooled Fund
A pooled fund, similar to a mutual fund, combines the assets of many investors into a single pool. The fund
is managed by a professional investment manager. Sun Life Financial's Segregated Funds usually invest either
in units of a pooled fund or a mutual fund.
See also Segregated Fund
Pooling
In pension plans, this term used to describe any method by which certain risks or costs are shared by all members
of a group, and certain group advantages are gained.
See also Pooled Fund
Portability
The term portability is used to describe the provisions which allow terminated employees to transfer the value
of their deferred pension benefit or the value of their contributions and those made on their behalf, to another
pension plan. The pension plan can include a LIRA, a LIF, an LRIF (if one exists in your province) or a deferred
or immediate life annuity.
Depending on plan rules, you may or may not be allowed to transfer assets into your group plan with
Sun Life Financial. The application forms referred to here can be found on the Canada Customs and Revenue
Agency's website. Simply select "Forms" from this Plan Member Services site menu.
If your plan allows, the form T2033 must be completed to transfer Registered Retirement Savings Plan assets.
If the assets are locked-in, we would also require a Locking-In Agreement as well as an application form to be
completed for the investment product that you select.
For transferring pension or DPSP assets, please complete form T2151. If the assets are locked-in, we require
a Locking-In Agreement as well as an application form to be completed for the investment product that you select.
Power of Attorney
A Power of Attorney gives legal authority to one or more person(s) to sign certain documents should you become
unable to do so. Power of Attorney may be revoked at any time, provided you are mentally competent. It can
be general in scope, covering all aspects of your financial affairs, or it can be limited to giving authority to act
on certain aspects of your estate.
Present Value
The value, today, of money to be received in the future.
Profit Sharing Pension Plan
An arrangement under which payments, computed by reference to business profits, are made by an employer,
in trust, for the benefit of employees whether or not the employees contribute.
Projected Pension Benefits
An estimate of pension plan benefits calculated by using a particular set of actuarial assumptions. Such items
as the effects of past and anticipated future service credits, past and anticipated future compensation, and age
are taken into account.
Pro-rate
To withdraw proportionally from each fund.
For example:
If your selected withdrawal amount is: $3,000.00
And your Fund Balances are: Canadian Equity Fund = $ 2,000.00
Bond Fund = $ 1,000.00
Balance Fund = $ 7,000.00
Total Fund Balance = $10,000.00
Your total withdrawal amount will be pro-rated across your funds. For example, your Canadian Equity Fund will
be pro-rated by 20% [($2,000/$10,000)*$3,000=$600.00] as shown below:
Canadian Equity Fund = $ 600.00
Bond Fund = $ 300.00
Balance Fund = $2,100.00
Public Pension Plan
A pension plan such as Old Age Security or Canada Pension Plan/Quebec Pension Plan provided by the government.
Qualification Date
The date on and after which, under the laws of a designated province, a pension plan is required to maintain
its qualification for registration.
Quebec Pension Plan - QPP
A government pension plan that provides retirement benefits for each contributor living in the province of Quebec.
Recipients of QPP benefits are not eligible to receive benefits from the Canada Pension Plan.
See also Canada Pension Plan
Registered Pension Plan - RPP
An employer-sponsored pension plan that is registered with Canada Customs and Revenue Agency and with
the appropriate provincial pension commission. A Registered Pension Plan qualifies for favourable tax treatment
by the federal and provincial governments.
Registered Plan
Any plan that has been submitted to and formally approved by the appropriate governmental agencies and for
which a registration number has been granted by these agencies.
Registered Retirement Income Fund - RRIF
A Registered Retirement Income Fund provides you with income during your retirement years. A RRIF is like
a continuation of your Registered Retirement Savings Plan whereby your funds remain tax sheltered and you
continue to choose how those funds are invested. The main difference is that rather than contributing as with
a Registered Retirement Savings Plan, the RRIF is designed to provide payments.
With a RRIF you must withdraw a minimum amount each year (except for the year of purchase). There is no maximum
limit on the amount that can be withdrawn but of course if you make significant withdrawals, your funds may
not last as long as you originally intended.
Registered Retirement Savings Plan (RRSP)
A savings vehicle for retirement, approved under the Income Tax Act. Taxes are deferred on contributions and
income earned until the savings are withdrawn.
Required Contributions
Contributions that an employer and employee are obligated to make under the terms of the plan.
Retirement Income
Income from pensions and other sources, to which a retired person is entitled. Retirement income may include
both private and public pension payments, income from personal savings, government income supplements,
and imputed income (e.g., free health insurance premiums).
Retiring Allowance
An amount received upon or after retirement from office or long-time service, or with respect to loss of office
or employment. A retiring allowance is usually paid as a single sum or in a few annual instalments. Although
it must be included as income in the year of receipt, it can be transferred, within limits, to an RPP or an RRSP.
Return
Return is the amount of money that you earn on your investment. Normally, it is expressed as a percentage
of your original investment.
Revenue Canada
(note: also under DNR and Canada Customs and Revenue Agency - CCRA)
The new name is the Canadian Customs and Revenue Agency (CCRA).
Risk and Return
When you invest your money, you expect it to grow and to generate a return on your investment. Risk is the
complicating factor. Most investors think of risk as the possible loss of some, or all of their money. But, there's
another type of risk. This is the risk that your investment returns will be lower than inflation and that your
money will lose its purchasing power.
For example, $1,000 worth of goods at an inflation rate of 5% will cost over $2,500 in 20 years. You want your
investment to achieve a return over and above the rate of inflation.
It's important to know that bearing some risk over the long term is the most effective way to achieve the highest
returns. By investing in growth funds, you're assuming more risk than a fixed income investor but you also have
a greater potential for high returns in the long term. The growth fund investor must have a stronger stomach
since investing in these funds is a bit like riding a roller coaster; growth funds fluctuate in price and may actually
decline in value, while fixed income funds generally offer somewhat lower returns with less risk.
RRIF
See Registered Retirement Income Fund
RRSP
See Registered Retirement Savings Plan
RRSP Contribution Limit
Your RRSP contribution limit is indicated on your Canada Customs and Revenue Agency Notice of Assessment
that you receive from the federal government after filing your taxes each year. There are two factors that limit
the amount you can contribute to a RRSP: a maximum annual dollar limit, or a percentage of the previous year's
"earned income" and your "pension adjustment".
S&P/TSX Composite Index
A common benchmark used to evaluate the performance of Canadian Equity Funds. The index represents the
performance for the 300 largest companies in Canada.
Salary Scale
In pension costing, salary scale is an estimate of future increases in wages and salaries of plan Members whose
benefits are based on earnings.
Savings Plan
Any plan that allows you to save money towards your retirement or for other reasons. Contributions to a savings
plan may or may not be tax deductible.
Sector Rotation
Some managers focus on the economy in general and try to choose groups of companies that will do well
in the current environment. Then they put more money in the stock of companies in the industry and regions
they think will perform well.
Segregated Fund
An investment in a Segregated Fund is similar to an investment in a Mutual Fund. Both types of funds combine
money from a large number of investors and these assets are invested and managed by a professional fund manager.
The assets in a Segregated Fund are owned by the insurance company but are segregated from its other assets.
Neither the value of the assets nor the rates of return are guaranteed. Segregated Fund assets are the assets
of the insurance company but in case where the latter were to declare bankruptcy, all Segregated Fund assets
would be allocated to the participants in priority over the insurance company's other creditors.
Segregated Funds are the investment options underlying an annuity or life insurance contract. As such, if you
declare bankruptcy, your Segregated Fund savings may be protected from your creditors as long as a spouse,
child, parent or grandchild or an irrevocable beneficiary has been designated as the beneficiary under the contract.
However, there are a number of exceptions to this protection from creditors, requiring each case to be looked
at individually. Moreover, if you die, the full value of your account (all contributions plus earnings) will be paid
directly to your beneficiaries without passing through your estate and incurring probate.
See also Pooled Fund and Mutual Fund
SC 91-Day T-Bill Index
The SC 91-Day T-Bill Index measures the total return on 91-Day T-Bills, valued on a monthly basis. T-Bills are issued
by the Government of Canada and are considered "short term paper". The Index is a good gauge for Money
Market Funds.
SC Universal Bond Index
The SC Universal Bond Index monitors approximately 700 marketable Canadian bonds that have terms to maturity
of more than one year. This index is a good representation of the Canadian bond market as a whole and can
be used as a gauge of most Canadian bond funds.
Short-term Trading
Short-term trading (also known as "frequent trading" or "timing the market") is the practice where an investor
makes multiple buying and selling transactions in an attempt to time market trends and boost returns to their
account. However, these transactions affect all investors in the fund and can lead to an overall negative impact
on the fund’s performance. As of January 1, 2005, a 2% fee will be charged when you initiate an interfund transfer
into a fund followed by an interfund transfer out of the same fund within 30 days. Note, this fee does not apply
to deposits or withdrawals, or transactions in guaranteed investments, directly held stock or money market
funds. In the event a member continues to engage in short-term trading, their trades may be delayed and their
ability to conduct online interfund transfers may be restricted.
For more details, please read the Questions & Answers.
Specialized Funds
Funds which specialize in one sector of the economy (technology or resource funds for example) or focus
on one region of the world. The narrower the focus of the fund, the more short term ups and downs you'll
likely experience, so make sure your investment in these funds is consistent with your risk profile.
Spill Limit
Once a member has contributed his or her maximum allowable contribution amount under a pension plan,
RRSP or DPSP, contributions in excess of the allowable limit will be moved to another plan. This plan is called
a "spill vehicle". The maximum allowable contribution amount in this case is called the "spill limit".
The spill limit is not provided on our website. Please contact a Sun Life Financial Call Centre Representative
at the number provided by your employer or 1-800-SUN-LIFE. Members of most plans, can update the amount
over the phone after a quick security check.
Spousal RRSP
A spousal RRSP is an account that is set up under your spouse's name but contributions are made by you. The
contributions will be attached to your RRSP limit and you will receive the tax benefit. Once the contributions
hit the account they are registered in your spouse's name and your spouse now has full control of the assets
in the spousal account. All trades and account updates on the Plan Member Services website have to be made
by your spouse via a spousal Access ID and PIN.
Spouses Pension Allowance
Under the federal Old Age Security Act, a monthly payment based on family income payable to the spouse
of an OAS pensioner.
Stocks
When you buy a stock (you'll see the term "equity" used as well), you become part owner of the company that
issued it. Stocks can pay investors through dividends and/or stock-price increases. In general terms, stocks are
typically more risky over the short term, but historically have offered higher returns over the long term than
other types of investments.
Surviving Spouse Benefit
A monthly benefit payable under a pension plan to the surviving spouse of a deceased employee or pensioner.
It usually refers to a benefit other than payments under a Guaranteed Annuity or Joint Life and Last Survivor Annuity.
Survivor Benefit
Generally, a benefit payable under a pension plan to the surviving spouse or dependent of a plan member who
dies before or after retirement.
Tax Credit
The provision for a reduction of income tax payable (not a deduction from taxable income) usually calculated
as an amount of other taxes payable, or a portion of housing or other expenses of the taxpayer (e.g. Ontario
tax credits).
Tax Deductible
Refers to a type or amount of income that may be deducted from a person's total income in computing net
or taxable income (e.g. Registered Pension Plan contributions).
Tax Deferral
Provision in the Income Tax Act whereby income/savings from certain pension and similar contributions (e.g. RRSP)
are tax-deductible, and employer contributions and investment income are not included in a member's current
taxable income. However, benefit payments are considered taxable income in the year in which they are received.
Therefore, tax is deferred until payment is made.
Tax Receipts
There are generally two RRSP receipts issued per year for contributions made. One for the period of January-February,
which you will receive in March, and one for the period of March-December which you will receive in January
of the following year.
Tax Shelter
A tax-deferred savings arrangement that permits a contributor to accumulate funds - usually contributions
and any accumulated income - which will be withdrawn at a later date under potentially more favourable
tax conditions. An RRSP is one common example.
Taxes on Withdrawals
Transactions in registered accounts are tax sheltered except in the case of withdrawal. When you withdraw
money from your registered account, the withdrawal becomes taxable to you.
Termination
(note: also found under Leaving the Plan)
Upon termination of employment, there may be a number of options available to you depending on the type
of assets you have with us.
If you have non-registered assets, you may transfer them to a non-registered account with an external institution,
our Group Choices Plan or take the assets in cash.
If you have registered pension assets and they are locked-in, you can transfer the assets to a locked-in account
with an external institution, our Group Choices Plan or purchase an annuity and transfer funds to another pension
plan if allowable.
If you have assets in an RRSP or DPSP, you may transfer those to an RRSP account with an external institution,
into our Group Choices Plan, take the assets in cash (less applicable taxes) or purchase an annuity.
Transaction Fees
As a member, you are not required to pay transaction fees. You may however, depending on plan rules, pay a fee
for withdrawals and fund management fees.This will depend on your plan rules and you may find this information
in the Plan Member Enrolment kit.
Note: a 2% fee will be charged (and paid to the fund) when a plan member initiates an interfund transfer into
a fund followed by an interfund transfer out of the same fund within 30 days. The assessment of the fee is subject
to materiality for administration purposes. See Short-term Trading for more details.
T-1007
An information return required to be filed with the Canada Customs and Revenue Agency when a "connected
person" joins a pension plan.
T-2033
A Canada Customs and Revenue Agency form used for a direct, tax-free transfer from one RRSP to another.
T-2037
A form required by the Canada Customs and Revenue Agency for a direct, tax-free transfer from a registered plan
to an insurance company or other carrier, to purchase an annuity.
T-2151
A Canada Customs and Revenue Agency form which records transfers from an RPP or DPSP.
T4A
A Canada Customs and Revenue Agency tax form which must be prepared when a payment is made from a Registered
Pension Plan or a Deferred Profit Sharing Plan to a client or member.
Units
When you deposit contributions into a fund, you obtain a proportionate share of the assets. To recognize this
"share" you are allocated "units". There is no ownership interest. The unit is a notional method used to measure
"policy" participation in a fund and a unit is simply the name given to the measurement that represents a piece
of one of the pooled funds. By counting pieces of the fund, we can track the total share each participant owns.
A "unit value" is the current value of each unit you own in a fund. Basically, the unit value is determined by totalling
the value of all of the assets held in a fund and dividing that total by the number of pieces all members hold.
Once a unit has been purchased, its value increases or decreases in relation to the investment earnings of the fund.
It is important to keep in mind that units are used strictly to determine each member's share of the fund. The unit
value represents the current worth of each unit. The current value of the funds total holdings can be determined
by multiplying the number of units held in the fund by the unit value.
Value
The manager chooses stocks that are inexpensive based on an analysis of the company's current strengths and
future prospects. If the manager is right, the company's stock will increase in price as others in the market
recognize the true value of the stock.
Value Fund
The investment manager chooses stocks that are inexpensive based on an analysis of the company's current
strengths and future prospects. If the manager is right, the company's stock will increase in price as others
in the market recognize the true value of the stock.
Vesting
Under a defined contribution plan or a Deferred Profit Sharing Plan, vesting refers to your entitlement, upon
termination of employment, to contributions made on your behalf by your employer.
Voluntary Withdrawals
(note: also under Withdrawals)
Depending on plan rules, you may withdraw a portion, all or none of your assets. If your plan has Call Centre
access and you are entitled to make a withdrawal, you can contact a Call Centre Representative to process
the request.
Waiting Period
The period of service with an employer that an employee must satisfy to meet the eligibility requirements
for membership in a plan.
Withdrawals
(note: also under Voluntary Withdrawals)
Depending on plan rules, you may withdraw a portion, all or none of your assets. If your plan has Call Centre
access and you are entitled to make a withdrawal, you can contact a Call Centre Representative to process
the request.
Year's Basic Exemption - YBE
A term used in reference to the Canada/Quebec Pension Plan to describe the earnings level that is not subject
to contributions.
Year's Maximum Pensionable Earnings - YMPE
A term used in reference to the Canada/Quebec Pension Plan that is often referred to as the earnings ceiling.
It refers to the maximum amount of annual earnings from employment on which Canada Pension Plan or Quebec
Pension Plan contributions and benefits are calculated. The YMPE changes annually.
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