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Successful investing is challenging

In a defined contribution (DC) pension plan like CSS, ups and downs in the daily values of our investment funds due to market fluctuations are a normal part of the long-term investment cycle. These short-term fluctuations sometimes lead to concerns being expressed by members about our investment returns, investment strategy, or lack of more investment fund options being available.

Pooled resources

​We value our members’ opinions and take all concerns raised seriously. It is our view, supported by 80 years of working with CSS members, that successful long-term investing for the average individual is challenging. Comparing and evaluating investment strategies, investment portfolios and short-term investment performance can be confusing and often overwhelming.

At CSS, a lot of work goes on behind the scenes that is not always immediately reflected in the short-term returns that you may see on a daily basis on our website. CSS has a fiduciary responsibility1 to our  members and that means that as a member of the CSS Pension Plan you can be sure that we have your best interests at heart.

There is a reason why our tagline is “Strength in Numbers” – because it is true of many facets of the CSS Pension Plan. Not only because we are a cooperative in a numbers-fueled industry, but also because of our pooled approach to investing. You see, when so many CSS members join together to save for retirement over the long term, the total value of the pooled funds allows us to offer a leading-edge investment structure, customized specifically for our members, with very low fees in comparison to the retail marketplace – a structure that is virtually impossible for our members to replicate as individual investors.

This is one of your greatest advantages of being a member of CSS. By pooling our resources, we improve the likelihood that you’ll reach your retirement goals. In addition to pooling resources, there are many other factors we consider to help achieve optimum retirement outcomes for members, including employing a disciplined long-term investment approach grounded in academic research.

Long-term investment strategies

We are long-term investors. Taking a long-term approach to investing, over the course of your working years, increases your chances of investment success. Why? Because much of the market’s long-term  return comes in sudden, short bursts that are essentially impossible to consistently predict. By remaining invested in the markets over the span of your career, you’re much more likely to catch these market peaks when they do happen and reap the returns as a result.

A long-term investment horizon also allows us to access investments for our members that are not typically available to the average individual investor which can offer a premium over public-market investments returns. Diversified direct investments in private markets, including real estate and debt, are some examples of where we expect to add long-term value over investments available to the average individual investor.

Understanding investor behaviour

Much has been written over the past few decades about how human behavioural tendencies lead most individuals to make sub-optimal investment decisions. This includes poorly timing investment decisions and making poor investment allocation decisions, both of which can lead to lost investment returns.

A classic example of this is aiming to be fully invested when markets are rising and then trying to move your pension funds out of the markets just before they begin to decline. This is called “market timing” and, unfortunately, has been shown that even professional investors can’t consistently do this well. The bar chart below illustrates the outcome of an “average investor” who timed the markets over the span of 20 years.

Market timing

We take investor psychology and behaviour into account when designing investment products and options with a view to assisting members in making decisions that lead to optimized retirement outcomes. For example, our investment menu consists of four investment funds and is purposely simple to avoid the pitfalls of overly complex choices.


We believe diversification is key to managing investment risk. Investing in the CSS Balanced Fund – our default investment fund – provides a level of diversification not typically available in the retail marketplace. As an individual retail investor, can you invest in Private Real Estate, Private Debt, Emerging Market Debt, Global Developed Equities, Emerging Market Equities, Small-cap Equities and Relative Value Strategies like you can in the CSS Balanced Fund?

When so many CSS members join together to save for retirement, we gain access to markets and investment vehicles that would otherwise be out of reach for us as individual investors. Over the long term, history tells us this diversified portfolio will lead to better risk-adjusted returns for our members.

Balanced Fund diversification


No matter if you invest with a pension plan like the CSS Pension Plan or a financial institution, you’ll pay fees to cover the cost of the investment management and operating expenses needed to offer the investment funds. By pooling all of our member assets together ($4.5 billion) – and because we do not have a sales force or distribution costs – we are able to acquire institutional investment management at fees materially below comparable investments in the retail market. For example, our Balanced Fund’s management expense ratio currently sits at 0.41% (for more information on the impact of fees, see fees information sheet).

Access to best-in-class investment consultants and managers

Working with leading global investment consultants and taking a long-term view of asset class risk and return expectations, we are able to create investment options that give our members the best chance of success. To help gauge performance of our funds, we use sophisticated computer modeling and scenario testing. This helps us examine how each asset class will perform over the long term, in a variety of possible market environments, and gives us a better idea of expected returns as well as risk metrics.

We also leverage the knowledge, expertise and experience of our consultants to evaluate and select top-performing active fund managers and investment strategies. We use time-tested due diligence processes and work with our investment consultant to evaluate the quality of our external fund managers, their investment team, their investment philosophy, investment process, portfolio construction and risk management. Once we have hired an investment manager, we continuously monitor their performance, key investment professionals and portfolio risk. The typical retail investor does not have access to this information or expertise, let alone the time or ability to evaluate its impact. We believe this leads to better long-term results.


Making the most of our retirement savings is not easy, but the ability to pool resources with other CSS members gives your Pension Plan the size necessary to access investment research, leading investment expertise, asset classes, investment managers and strategies that improve your probability of success in meeting your retirement goals over the long term. In short, you’ve got “strength in numbers.”

1 A legal obligation of one party to act in the best interest of another. The obligated party is typically a fiduciary, that is, someone entrusted with the care of money or property. Also called fiduciary obligation,

*Sources: BlackRock; Morningstar; Informa Investment Solutions; Dalbar. Returns based on performance between 1/1/1996-12/31/2015. Asset classes represented by the following indexes: US Stocks = S&P 500, 60/40 = balanced portfolio with 60% invested in the S&P 500 Index and 40% invested in the Bloomberg Barclays U.S. Aggregate Bond Index and rebalanced annually, US Bonds = Bloomberg Barclays U.S. Aggregate Bond Index, Average Investor = Dalbar’s average asset allocation investor return, which uses data from the Investment Company Institute (ICI), Standard & Poor’s and Barclays Index Products to compare mutual fund investor returns to an appropriate set of benchmarks. The study utilizes mutual fund sales, redemptions and exchanges each month as the measure of investor behavior. These behaviors reflect the “average investor.” Based on this behavior, the analysis calculates the “average investor return” for various periods. Index returns are for illustrative purposes only. Index performance returns do not reflect any management fees, transaction costs or expenses. Indexes are unmanaged and one cannot invest directly in an index. Past performance does not guarantee future results.

**Balanced Fund asset mix as at the time of publishing. The asset mix is subject to periodic adjustments.

Article from the fall 2019 issue of TimeWise.