Terms and Definitions

Government benefits

Canada Pension Plan (CPP)

The Canada Pension Plan (CPP) Retirement Pension provides a monthly taxable benefit to retired contributors. You must apply to receive benefits. For more information please go to www.servicecanada.gc.ca

Old Age Security Pension (OAS)

The Old Age Security (OAS) Pension is a monthly benefit available to most Canadians 65 years of age who meet the Canadian legal status and residence requirements. You must apply to receive benefits. For more information please go to www.servicecanada.gc.ca

Guaranteed Income Supplement (GIS)

The Guaranteed Income Supplement (GIS) provides a monthly non-taxable benefit to low-income Old Age Security (OAS) recipients living in Canada. For more information please go to www.servicecanada.gc.ca

Quebec Pension Plan (QPP)

The Quebec Pension Plan (QPP) Retirement Pension provides a monthly taxable benefit to retired contributors. The province of Quebec administers its own program, similar to the Canada Pension Plan (CPP). For more information please go to www.servicecanada.gc.ca

Registered Retirement Savings Plan (RRSP)

An investment account that allows individuals to defer tax on contributions made to the plan. There maybe a variety of investment options available in the plan, some examples are investment funds, GICs, stocks or bonds. Income tax is deferred until the money (the amount originally deposited plus any investment earnings made on that money) is withdrawn.

Registered Pension Plan (RPP)

A pension plan is usually established by an employer on behalf of its employees to provide for their retirement. With a defined contribution plan, the amount of the employer and employee contributions is fixed while the savings are accumulating, and the actual value of the pension is not known until retirement.

Compound Interest

Interest paid on both the original investment, as well as on the interest the investment accumulates.

Investment Management Fees (IMFs)

Collected by Manulife Financial to cover the costs associated with investment management and administrative expenses. The fee is deducted from the fund before calculation of unit values.

Management Expense Ration (MERs)

The equivalent to Investment Management Fees (IMFs) but is the term used by Mutual Fund Companies to cover the costs associated with investment management and administrative expenses.

Dollar-cost Averaging

A technique whereby an investor contributes regular amounts on a fixed schedule, regardless of changes in the market. On average, the investor should end up buying more fund units at a lower price and fewer fund units at a higher price.

Tax Sheltered Savings

Investment earnings within a Registered savings plan that are not taxed.

Fund Manager

The person who selects the investments that meet the fund’s investment objective. A professional fund manger manages each fund in your plan.

Retirement Date Funds

Retirement date funds offer a well-balanced investment portfolio inside a single fund. Each fund is identified by its year of maturity, and as the maturity date approaches the fund gradually rebalances to become more conservative.

Asset Allocation Funds

Portfolios of diversified funds that represent several asset classes and investor styles. They are designed to make investing convenient. They provide fund participants with a balance of funds that emphasize capital growth and preservation consistent with investor styles ranging from conservative to aggressive.

Fixed Income Securities

Are typically more conservative investments that provide a return in the form of fixed periodic payments and eventual return of principal at maturity. Some examples are bonds, GICs and Term deposits.

Equity

A security representing a portion of ownership of a company. Also referred to as stocks or shares.

Portfolio Rebalancing

Manulife asset allocation funds are periodically re-balanced to maintain their long-term target asset mixes which ensures each fund’s underlying composition fulfills its objectives.

Inflation

An increase in the general prices of goods & services over a period of time as calculated by the Consumer Price Index.