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Group Tax Free Savings Account (TFSA) for Telesat

Group Tax Free Savings Account (TFSA) for Telesat. Agenda. Background and Telesat HR policy Your TFSA Choosing your investments Support Next Steps. Telesat TFSA Background and Framework. BCE ESP ended November 1, 2007 Telesat elected to replace BCE ESP with a Group TFSA

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Group Tax Free Savings Account (TFSA) for Telesat

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  1. Group Tax Free Savings Account (TFSA) for Telesat

  2. Agenda • Background and Telesat HR policy • Your TFSA • Choosing your investments • Support • Next Steps

  3. Telesat TFSA Background and Framework • BCE ESP ended November 1, 2007 • Telesat elected to replace BCE ESP with a Group TFSA • BCE ESP participants who were contributing at the time that benefit ceased are eligible • Plan is non-contributory; optional contributions permitted

  4. Telesat TFSA Background and Framework • Telesat contributions: • Equal to contribution level in BCE ESP at time benefit ended • Subject to achievement of EBITDA for previous year and active employment status at time Telesat contribution made to Group TFSA • Calculated based on period of active employment during previous calendar year • Taxable income reported on T4

  5. TFSAs • "After" tax dollars • Contribution limit of $5,000 per year • Carried forward indefinitely • Tax-free growth • Contributions are not tax deductible • Withdrawals are tax-free

  6. Annual Contribution Limit • All Canadians 18 or older get $5,000 annual TFSA contribution limit • Annual limit not tied to income • Annual limit increases based on inflation rate • Indexing is constantly applied to initial $5,000 • Attribution rules on earned income do not apply

  7. Contribution LimitsContribution Room Example/Carry Forward $7,000 $8,000

  8. Re-Contribution Example $13,000

  9. TFSA vs. RRSP

  10. TFSA vs. RRSP

  11. no difference! TFSA vs. RRSP Constant Marginal Tax Rate

  12. Contributions Your employer You Equivalent to employer contribution under BCE ESP at time of termination of benefit Not subject to employee contribution to Group TFSA Optional Up to your limit Transfers-in from other plans

  13. Take Advantage of Your Plan • Employer contributions (not subject to employee contribution) • Convenient • No sales charges • Lower fees • Admin fee – $5 a month • Investment fees – 0.12% to 0.85% • Transfers-in from other plans permitted

  14. Fees Assumptions • Age at hire – 45 • Initial balance – 0 • Annual contribution - $5,000 • Annual inflation – 2% • Salary increase – 2.0%

  15. Choosing Your Investments

  16. Equity Balanced Fixed income Money market Understanding Investing Return Risk

  17. Choosing Your Investments Age 35 Age 45 Age 55 Retirement Horizon Age 65 Return Risk

  18.   • Fill in the • questionnaire Determine your investor profile Choose your investments Choosing Your Investments

  19. Choosing Your Investments  Select your own combination of funds • Various investment options including 6 multi-management funds • Requires more investment knowledge and regular monitoring

  20. Multi-Management Funds 100 80/20 65/35 50/50 35/65 Return 20/80 Fixed income Equity Risk

  21. Fund Information – www.dfs.ca

  22. Choosing Your Investments   Select your own combination of funds Select a lifecycle path • Various investment options including 6 multi-management funds • Requires more investment knowledge and regular monitoring • Three lifecycle paths available • Based on your age and risk tolerance • Asset mix automatically changes, reducing risk over time

  23. Secure Moderate Secure Path Balanced Balanced Path Growth Energetic Speculative Growth Path Determine Your Lifecycle Path Investor Profile Lifecycle Path

  24. Select a Lifecycle Path Your path towards achievement of personal financial objectives Your investor profile Your age Secure Path As you age, the asset allocation of the path becomes more conservative

  25. Support

  26. Customer Care Centre • Human touch services • Specialized agents • Transactional services • Changes to your plan • Assistance on choice of investments

  27. Participant Website Array of tools to help you plan your future financial security www.dfs.ca/participant • Simple and complete transactional services • Information on your account • Changes to your plan

  28. On Target Retirement Planning Tool

  29. Your Statement • Account summary • Asset allocation • Investment directions • Personalized rate of return • Available online

  30. Your Next Steps • Read through your Setting Sail for the Future kit • Determine your investor profile, consult your financial advisor as appropriate and make your investment choices • Ask questions • Complete the enrolment form • Send the form to Telesat Human Resources by November 1st 2010.

  31. Thank you!

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