Peter's story

“My wife, Danielle, and I have already been planning our cycling tour of Europe,” says Peter, 57, smiling. “We’re planning an extended trip when I retire in about three years. Including what I’ll receive from the Canada Pension Plan, my funds in the CSS Pension Plan and our RRSPs, we’re pretty close to reaching our retirement savings goal. We’ll get by fine as long as we can hang on to what we’ve got.” 

Peter checklist

Peter’s use of the online Risk Tolerance Estimator leads him to the conclusion that he is a conservative investor and is provided with the recommendation that he invest 55% in the Bond Fund and 45% in the Balanced Fund.

Peter has been a member of the CSS Pension Plan for almost 36 years and has been logging into myCSSPEN regularly to check his account balance and use the pension projection calculator. He does not want to manage his investments in retirement and feels more comfortable taking a CSS monthly pension, which provides a guaranteed income for life. This will eliminate his exposure to the ups and downs of the markets.

“I’m not interested in managing investments when I retire, and I would have to stay invested in the markets if I chose an option like Variable Benefit (VB) payments or a RIF at a financial institution,” Peter explains. “I also know that my monthly pension payment will be based on the amount of my accumulated pension funds when I retire. I’d hate to take a loss at this late date because I’d have little time for the markets to recover before I intend to start my monthly pension.”

After attending a CSS Retirement Income Options (RIO) workshop, Peter booked an appointment with a CSS Pension Plan Consultant to talk about moving into the Plan’s lower-risk investment funds over the next three years. The Pension Plan Consultant suggested two different strategies that could meet Peter’s objective.

“First, she indicated that I could re-allocate my pension funds to the Money Market Fund if I wanted to minimize my risk of suffering a short-term loss, but this strategy may not help me achieve any more growth in my portfolio.

Second, she suggested that it might be better to allocate my pension funds to the Bond Fund, since I am specifically intending to take a monthly pension,” says Peter. “The Consultant explained that although bond prices can go up and down, bond prices generally tend to go up when long-term interest rates fall. This could provide us with some protection against an increase in the cost of my pension over the next three years if long-term interest rates go down. I’m going to discuss these two risk reduction strategies with my better half and then make a decision. Right now, I’m thinking that a gradual shift to bonds might work best for us.”


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