Our Pension Funds

What is a Lifecycle Fund?

At Chamber Pension Plan our pension funds are called Lifecycle funds, and are based on your age and your projected retirement date. The reason we have different funds for different age groups is that as you age, your investment risk tolerance, portfolio time horizon, and investment goals normally change. Lifecycle Funds reflect your changing needs throughout your working life by automatically adjusting the combination of assets they invest in based on your age to reflect your evolving investment needs and goals.

Chamber Lifecycle Funds

Each of the Chamber Pension Plan’s six Lifecycle Funds available under the plan contains a mix of investments linked to a specific target retirement decade, and each target retirement decade corresponds to a specific investment time horizon.

The Chamber Pension Plan’s six classes are called Lifecycle Funds, because they are designed to match where you are in your work life – the amount of working time left before you will need to start using your savings and the way your investment goals are expected to change over time.

The six Chamber Pension Plan Lifecycle Funds are:

• Chamber 2060
• Chamber 2050
• Chamber 2040
• Chamber 2030
• Income Conservative
• Income Growth

Objective of the Chamber Pension Plan Lifecycle Funds

The Lifecycle Funds use professionally determined investment mixes that are tailored to meet investment objectives based on various time horizons. The objective is to strike an optimal balance between the expected return and risk associated with each fund.

Investment Strategy

The Chamber Pension Plan Lifecycle Funds’ strategy is to invest in an appropriate mix of equity and fixed income securities for a particular time horizon, or target retirement date. The investment mix of each Chamber Pension Plan Lifecycle Fund becomes more conservative as its target date approaches.

The strategy assumes that:

• Investments with higher expected returns (equities for example) also normally come with a higher risk of loss;  it is widely believed by investment experts however, that if you hold those investments for a long enough period, well-selected equities will deliver a higher total return.

• The greater the number of years you have until retirement, the more willing and able you should be able to tolerate risk (fluctuations) in your pension account value to pursue higher rates of return.

• For a given risk level and time horizon, there is an optimal mix of equity and fixed income securities that provide the highest expected risk-adjusted return.

Fund Composition

Each of the Chamber Pension Plan Lifecycle Funds has a target asset allocation. In other words, each is made up of the combination of equity and fixed income portfolios which maintain an optimal balance of investment risks and rewards for a particular time horizon.  Here is a graph representing the 2019 target allocations for the Chamber Pension Plan Lifecycle Funds:   

Lifecycle Funds Operation

When a Lifecycle Fund has reached its target date, its composition will be the same as the Income Growth Fund.

The Income Growth Fund:

• Focuses on capital preservation while providing a small exposure to equity securities in order to reduce inflation’s effect on your purchasing power
  
  
• Is designed to produce a higher level of income for participants who plan to start withdrawing from their pension account in the near future and for those who are already receiving annual payments from their account
  
  
• Has a set asset allocation that does not change over time (65% fixed income securities; 35% equity securities)
  
  
• The progression from a target date Chamber Lifecycle Fund to the Income Growth Fund is automatic – you don’t have to do anything

You may also make a one-time selection at any time to our most conservative fund, Income Conservative.  The investment mix of the Income Conservative Fund is maintained at 75% fixed income and 25% equity.

New Lifecycle funds will be added for distant target dates as they are needed. For instance, a Chamber 2070 Fund will be created in 2025 while at the same time the Chamber 2030 proportions will adjust to reflect the Income Growth Fund proportions.

Risks

When you invest in the Chamber Pension Plan Lifecycle Funds:

• You are subject to the investment risks associated with equity and fixed income securities.

• Your account is not guaranteed against loss, nor is it assured of any level of return. The Chamber Pension Plan Lifecycle Funds can have periods of gain and loss, just as the equity and fixed income markets.

Rewards

Pension Lifecycle Funds simplify fund selection. When you join the plan you are automatically allocated, based on your age, to the Lifecycle Fund representing your expected target retirement date.  To add some flexibility, at any time, you can move mandatory contributions to a more conservative Chamber Pension Plan Lifecycle Fund.

When you invest in the Chamber Pension Plan Lifecycle Funds:

• You can be sure that your pension account is broadly diversified and professionally managed.

• You don’t have to remember to adjust your investment mix or make any transfers as your target date approaches – it’s done for you.

• You don’t have to monitor your account to be sure you are not straying from your investment strategy — the Chamber Pension Plan Lifecycle Funds keep you on course.

Why Use the Chamber Pension Plan Lifecycle Funds for my Retirement Account?

Use the Chamber Pension Plan Lifecycle Funds if you are looking for a simple, low maintenance way of investing money in your pension account. The Chamber Pension Plan Lifecycle Funds make the investing process easy for you because you do not have to figure out how to diversify your account or how and when to re-balance.

The Chamber Pension Plan Lifecycle Funds are designed so that 100% of your pension account can be invested in the single Chamber Pension Plan Lifecycle Fund that most closely matches your working time horizon.

Six Funds Explained