CPP Investment Board says 2014-15 had best return in fund’s history + MORE May 21st

TORONTO – The fund that manages investments for the Canada Pension Plan says it just had the best year in its history.
The CPP Fund’s portfolio had a net return of 18.3 per cent in the 12 months ended March 31, the highest one-year return since it started 16 years ago.
Assets grew by $45.5 billion to $264.6 billion at the end of its 2015 financial year.
Only $4.9 billion of the increase came from contributions while $40.6 billion came from investments.
The CPP Investment Board says the strong performance was due to growth in stock markets, bonds, private assets and real estate holdings.
The value of its investments also got a $7.8-billion boost from a decline in the Canadian dollar against certain currencies.
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At the most recent meeting of the Decumulation Institute (see decumulation.ca), consultant Don Ezra unveiled a useful concept called “wealth zones.”
He showed a simple drawing of an ordinary detached home, with a basement, three stories and an attic. The labels he attached to each of these levels is a good way for near-retirees to start thinking about the inevitable transition they’ll have to make from wealth accumulation to wealth decumulation.
In the basement is something Ezra calls pre-annuitized wealth, which are the normal employer DB pensions or government pensions that most people don’t usually view as wealth. But of course once you start to draw down on CPP, OAS or in some cases the GIS, these are sources of regular income that become wealth once they’re in your hands.
The ground floor Ezra terms the essentials zone, although he adds that in some cases this too may actually turn out to be below the surface. The essentials zone refers to a level of wealth that is merely enough to annuitize or support life’s essentials: food, heat and utilities, rent or mortgage, etc…

(Getty Images / shapecharge)
Q: With $560,000 in RRSPs between my wife and I, $37,500 in TFSAs and another $120,000 in savings, is it wise to stop working now or continue to 65? I am currently collecting $870 from the Canada Pension Plan (CPP), but also working. I am on track to earn $100,000 or more. My wife will collect $600 per month from CPP when she starts to collect. We are both 63 and cannot decide when to stop working. I am trying to sort the tax problems of working too long before spending.
—Don
A: There is a fine balance between work and retirement, Don. Many people who are still working want to be retired. Some who are retired miss working. But as you approach retirement, you owe it to yourself to try to figure out if you’re ready to retire financially as well as from a lifestyle perspective.
First, Don, let’s do some number crunching.
In addition to your CPP retirement pensions, you should both likely be entitled to Old Age Security (OAS) pensions of up to $564 per month each at 65…

CPPIB concerned about high asset prices

HARTFORD, Conn. – A state board has ruled that Newtown must pay long-term disability to a police officer who developed anxiety and depression after responding to the 2012 shooting rampage at Sandy Hook Elementary School.
Thomas Bean, 38, has been out on disability with post-traumatic stress disorder and hasn’t worked since the massacre, which left 20 first-graders and six educators dead.
The Hartford Courant (http://cour.at/1cQ7ujx ) reports the State Board of Mediation and Arbitration ruled the police contract requires the town to pay Bean half his salary until retirement, an amount that will total more than $380,000. Newtown’s insurance company is paying 50 per cent of his salary through June.
“The union is happy with the decision. Not only is it a victory for the union, but a victory for the integrity of the collective bargaining agreement,” union President Scott Ruszcyk said in a statement. “Tom was not looking for a handout, he was simply looking for the town to live up to its contractual obligations…