1. University of Northern BC Investment Presentation

2. Agenda Defined Benefit vs Defined Contribution Plan
Mutual funds vs Segregated funds
What is risk?
Relationship between risk & return
Investment management styles
Choosing your funds
Investment tools
Sun Life Financial services

3. DB vs. DC- What’s the difference?
Defined Contribution Pension Plan (DCPP):
One of the more popular pension plans in Canada
The contributions are “Defined” known today – we know how much you contribute to the plan
The sum of money you will have in retirement will depend on much is contributed and how you choose to invest the money
Defined Benefit Pension Plan (DBPP):
The benefit you receive at retirement is based on a formula so the benefit at retirement is “Defined”
The dollars to fund the retirement can vary based on how the money is invested
The investments are managed by the sponsor of the plan

4. DB vs. DC- What’s the difference?
Unpredictable; based on DC account value and interest or investment returns after retirement
Pension Benefit
Predictable; based on defined formula
Company Contributions
Variable
Defined % of employee pensionable earnings
Investment Decisions
Made by company
Made by employee
Investment Risk
Company assumes risk
Employee assumes risk
Termination
Lump sum value of earned pension
Value of retirement account

5. Mutual funds vs. Segregated funds
Segregated Funds are typically investment options available through insurance companies
Mutual funds and segregated funds combine money from a large number of investors and these assets are invested and controlled by a professional money manager
The monies in the segregated funds offered in your plan are pooled together and invested in the underlying mutual fund
Segregated funds are held in trust for you and are kept separate from the insurance company's assets

6. What is risk?

7. Determining your risk profile
Risk tolerance is the degree to which you are comfortable with:
Volatility of annual returns
Likelihood and size of negative returns
In the long term:
Higher returns typically come from taking more risk, but
Need to be able to sleep comfortably at night?
The risk required to achieve your goals:
What is my investment time horizon?
What are my retirement income expectations?
What is the value of additional sources of potential retirement income?

8. Two different risks need to be managed
Volatility of short term performance
Assess your “risk tolerance”
Diversify your portfolio to address market risk
and
2. Longevity Risk
Risk of failing to accumulate sufficient assets to build desired pension
Not having sufficient assets to pay your desired pension for life

9. When to re-evaluate your risk tolerance
Major life events such as:
Marriage or divorce,
Children are born, go to university, leave home, (return home?)
Debt levels change or net worth changes considerably
Inheritances
Death of a spouse
As your investment time horizon to retirement shortens
If your tolerance for risk changes for any other reason

10. 65 91 95 Longevity risk Retirement 50% chance one spouse will
live to age 91 95
25% chance
one spouse will
live to age 95
Source: Canadian Institute of Actuaries – 1994 Uninsured Pensioner Mortality Table Projected to 2020.

11. Investments – Risk vs. Return
Canadian, US, & Foreign Equities
Guaranteed
Guaranteed interest during fixed term
Less long-term growth potential
High
Money Market
Government treasury bills (T-Bills)
Less long-term growth potential
“Balanced Funds”
Bonds (Fixed Income)
Promise to repay debt
Pays a rate of interest
Government and corporate
Return
Equities (Stocks)
Share in company profits
Canadian, U.S. or Foreign
Greater long-term growth potential
Bonds
Money Market
Balanced Funds
“One-stop” shopping
Automatic diversification
Low
Guaranteed Funds
Low
High
Risk 11

12. Growth of $10,000 (June 1995 – June 2010) $ 34,583 $ 28,893 $ 17,120
$50,000
$40,000
$ 34,583
$ 28,893
$30,000
$20,000
$ 17,120
$ 13,291
$10,000 $0
Jun 95
Jun 96
Jun 97
Jun 98
Jun 99
Jun 00
Jun 01
Jun 02
Jun 03
Jun 04
Jun 05
Jun 06
Jun 07
Jun 08
Jun 09
Jun 10
Consumer Price Index
DEX 91 -
Days T -
Bill Index
DEX Universe Bond Index
S&P/TSX Composite Index

13. Investing in volatile markets
Be patient and don’t panic
Corrections are a normal part of the market. Markets eventually recapture losses, reaching and surpassing former levels. This can present opportunities for long-term investors
Work with your Financial Advisor
Working with an advisor who is focused on helping you achieve lifetime security. Consumers with well-balanced, disciplined investment plans, who have taken the risk of market volatility into account when creating their investment plans, should have minimal impact on long-term goals
Diversify
A diversified portfolio with a variety of investments, can carry less risk
During market volatility, members with proper asset allocation and disciplined investment plans will be impacted less by short-term events

14. Diversify your investments
Diversification: holding different types of investments in your portfolio
Lower your overall risk by: not putting all of your eggs in one basket
Asset Class
Manager
Style
Sector
Foreign
Markets
Ways you can diversify
Diversification means:
Lowering your overall investment risk by investing in a variety of:
Asset classes (guaranteed funds and money market, bonds, equities)
Management styles, or
Countries or regions
Choosing a variety of investments can reduce your risk of loss and increase your potential for higher investment returns. Diversifying your portfolio by different fund categories, referred to as an "asset allocation" strategy, is a key part of your investment decision.
Allowed 100% foreign content

15. The cycle of market emotions financial opportunity
Point of maximum
financial risk
Euphoria
Thrill
Anxiety
Denial
Excitement
Fear
Optimism
Desperation
Optimism
Investors naturally react differently with different market cycles. When you begin investing for your retirement it’s usually with a sense of optimism and excitement. You’ve taken the time to assess your own personal tolerance to investment risk and carefully selected your investment funds that you believe are going to help you reach your retirement goal.
When markets perform strongly and investment returns are positive there’s a sense of thrill and euphoria amongst investors. Some investors will react by buying into the markets during peak times which goes against the philosophy of buying low and could cause the investor to be exposed to investment risk as markets decline.
During market turmoil it‘s natural for investors to have a sense of fear or concern when they begin to see negative returns on their investments. This feeling can leave some investors scared, prompting them to move to more conservative investments at the wrong time. Which means they sell when their unit values are low so they experience investment loss.
Weathering the storm and staying the course is imperative in order to achieve the long term gains that most investors are looking for when they entered the market.
Let’s take a look at the market returns during some troubling times and see how they react over the long term….
Panic
Relief
Capitulation
Hope
Despondency
Depression
Point of maximum
financial opportunity
Source: Westcore Funds / Denver Investment Advisers LLC

16. Investment Styles

17. Investment Manager approaches
Active
Objective is to outperform a market index based on research of current market conditions and company prospects (actively buys and sells securities in individual funds)
Passive/Index
Simply buys and sells assets to match characteristics of an index, fund performance should be similar to the index, i.e. S&P TSX
Fund Manager applies an investment “style” to their approach
Fund Management Fees tend to
be lower than an Active Fund Manager

18. Investment styles Value Growth
Focuses on stocks that a fund manager thinks are currently undervalued in price and will eventually have their worth recognized by the market
Growth
Believes that the single most important thing driving stock prices is rapidly rising corporate earnings -- and that's what they look for
If the manager is right, the stock
will increase in price as others
in the market recognize the
true value of the stock
If the manager is right, the company’s
stock will increase in price as the
company achieves business and
earnings growth

19. not allow any one style overweight the other
Investment styles
GARP
Growth at a reasonable price
- looks for stocks of growth companies that they can buy for a reasonable price
Core
Fund manager includes both growth and value styles
– objective is to
not allow any one style overweight the other
This is a combination of value
and growth investing
By not allowing one style to
overweight they maintain
a neutral position

20. Choosing your funds

21. my money- Investment Risk Profiler
Assess your personal risk tolerance by completing the investment risk profiler:
online
paper-based version

22. Investment Risk Profiler
Example:
A score of 36 to 85 points = Moderate
15%
International Equity
10%
Money Market
15%
U.S. Equity
40%
Fixed Income
20%
Canadian Equity
Once you have completed all 8 questions, you will be directed into the appropriated asset allocation model based on your risk tolerance.
Think of it as a quiz that matches your personality with your money. You’ll have a better understanding of how much risk you’re willing to take when it comes to investing. You’ll know the percentage of assets that should be invested in each investment category – and by using the fund information for your plan through Morningstar Canada, found under investment reports, you can pick the individual funds you want to invest in.

23. Your investment fund choices
* Fund Management Fees as at August 31, FMF for this plan are expressed as an annualized percentage, and exclude applicable sales tax as of July 1, 2010
Asset Class
Fund Name
Risk
Management
Style
FMF*
Guaranteed/
Money Market
Sun Life Financial Money Market
Sun Life Assurance 1,3,5 Year Guaranteed
Low
Core
N/A
0.39%
N/A
Bonds
BlackRock Bond Index
PH&N Bond
Low – Moderate
Universe
0.44%
0.66%
Balanced
Bonavista Balanced
Beutel Goodman Balanced
McLean Budden Balanced Growth
Moderate
Value
Growth
1.55%
0.73%
0.64%
Canadian Equity
BlackRock S&P/TSX Composite Index
Beutel Goodman Canadian Equity
McLean Budden Canadian Equity Growth
McLean Budden Canadian Equity
Beutel Goodman Small Cap
Moderate – High
High
Core-GARP
Value
Growth
0.45%
0.73%
0.64%
0.65%
0.74%
U.S. Equity
BlackRock U.S. Equity Index
CI American Value
McLean Budden U.S. Equity
Moderate – High
Core-GARP
Value
0.45%
1.25%
0.71%
Foreign Equity
McLean Budden Global Equity
Moderate – High
Core-GARP
0.67%

24. Rebalance to match your risk tolerance Back to target asset mix
Current Asset Mix
Back to target asset mix
40%
25%
20%
30%
15%
25%
20%
30%
20%
25%
Sell Bonds
Buy Equities
Rebalancing strategy 24

25. Investment Tools

26. Getting information about your funds (Morningstar®)
Morningstar can be accessed by selecting Investment Performance from the Accounts menu
Morningstar is a leading provider in investment news and information. The investment reports you can access through Morningstar provides you with top-rated online investment information and analyses. Tracking the performance of your plan’s investment funds have never been so easy and comprehensive.

27. Getting information about your funds (Morningstar®)
Investment Information
Capital market performance
Individual fund performance
Investment style, fund and manager updates
Portfolio X-Ray
Analyze different combinations of funds as a single portfolio; including the effect of asset allocation changes to the portfolio
Fund Compare
Compare and analyze funds in your plan with the full list of available funds
Performance Reports
Generate investment performance reports for your plan’s funds
On the plan member website, you have access to Morningstar, where you can view capital market performance, individual fund performance, investment style factors, fund and manager updates and much more under investment information.
Through the Portfolio X-ray you can analyze different combinations of funds as a single portfolio, including the effect of asset allocation and fund changes to your portfolio.
Get to know Morningstar. You can link directly to Morningstar by selecting the Investment Reports links from the Quick Links section of my info café, or by going to the Accounts drop-down menu and selecting Investment Reports. Select the Morningstar link or logo to access the investment information.

28. Investment Information
On the plan member website, you have access to Morningstar, where you can view capital market performance, individual fund performance, investment style factors, fund and manager updates and much more under investment information.
Through the Portfolio X-ray you can analyze different combinations of funds as a single portfolio, including the effect of asset allocation and fund changes to your portfolio.
Get to know Morningstar. You can link directly to Morningstar by selecting the Investment Reports links from the Quick Links section of my info café, or by going to the Accounts drop-down menu and selecting Investment Reports. Select the Morningstar link or logo to access the investment information.

29. Morningstar Portfolio X-Ray
On the plan member website, you have access to Morningstar, where you can view capital market performance, individual fund performance, investment style factors, fund and manager updates and much more under investment information.
Through the Portfolio X-ray you can analyze different combinations of funds as a single portfolio, including the effect of asset allocation and fund changes to your portfolio.
Get to know Morningstar. You can link directly to Morningstar by selecting the Investment Reports links from the Quick Links section of my info café, or by going to the Accounts drop-down menu and selecting Investment Reports. Select the Morningstar link or logo to access the investment information.

30. Morningstar Fund Compare
On the plan member website, you have access to Morningstar, where you can view capital market performance, individual fund performance, investment style factors, fund and manager updates and much more under investment information.
Through the Portfolio X-ray you can analyze different combinations of funds as a single portfolio, including the effect of asset allocation and fund changes to your portfolio.
Get to know Morningstar. You can link directly to Morningstar by selecting the Investment Reports links from the Quick Links section of my info café, or by going to the Accounts drop-down menu and selecting Investment Reports. Select the Morningstar link or logo to access the investment information.

31. Performance Reports

32. Sun Life Financial Tools & Services

33. my money Retirement Planner
If you’re not sure how much money you need to set aside for your desired
lifestyle in retirement, the my money Retirement Planner can help
The planner lets you determine how much you need to save now to provide you with your desired income level in retirement. You can adjust a number of variables as they change over time by updating your calculations in the retirement planner.
Statements are mailed to your home address, but remember that they are also available on the Sun Life Financial Plan Member Services web site.
**The Retirement Planner is one of many tools that you can use, in planning for your retirement, it does not take the place of a real financial planner/advisor**

34. Additional on-line tools to help
Planning Tools
Withdrawal Calculator
Capital Gains vs. RRSP Calculator
Mortgage vs. RRSP Calculator
RRSP Loan Calculator
Non Resident Tax Calculator
Retirement Tools
Annuity Premium Calculator
Old Age Security Calculator
Registered Retirement Income Fund (RRIF) Calculator

35. Keeping you involved Internet Customer Care Centre www.mysunlife.ca
Internet
24 hour automated phone account access
Representatives available every business day (8 am to 8 pm ET)
Account updates
150 languages supported
Receive up-to-date account balances
View transaction history
Make investment changes
Link directly to investment reports
View online member statements

36. Keeping you involved Quarterly Mailed to your home Available online
Read your personal statements
Quarterly
Mailed to your home
Available online
Easy to read
Personal rates of return
Summary of all plans
Transaction history

37. Your action plan
Use the Investment Risk Profiler to determine your recommended portfolio allocation
Determine your investment approach
Use the Retirement Planner to determine your required savings level to meet your retirement goals
Make your investment decisions
Monitor your savings and investments
Talk to a Financial Advisor

38. Thank-you!