My employment situation changed recently and as part of the compensation package, I was offered RRSP (Registered Retirement Savings Plan) match on ongoing contributions. This sounds great, but the annoying part has been the fact thatthe plan is administered by an insurance company, and I need to pick from their segregated funds – all of which have exorbitant management fees.
So that I don’t leave money on the table, I decided to sign up and will be making regular contributions on a bi-weekly basis.
Of the funds available, nothing looked great – but I had to pick atleast one. So after a lot of debating, I decided to simply go 50-50 on US Equity Index and International Equity Index funds. Both these funds use Toronto-Dominion’s (I am already a TD shareholder — so, good to see my holding offering competitive products 
) mutual funds as the underlying funds.
) mutual funds as the underlying funds.- The US Equity Index Fund is essentially a S&P 500 tracker and has an MER of 0.383%
- The International Equity Index Fund tracks developed market companies ex-North America; and has an MER of 0.491%
Those MER rates are high for essentially an index fund (The other funds had even higher MERs!), but like I said – I had to pick some investment to take advantage of the employer matching.
These are front load funds – so, the charges are applied up front and I can sell them whenever I want. Upon further querying the plan administrator, I found that I get one free sale per year and all subsequent sales will incur a $50 admin fee penalty. For now, I will let the funds collect and grow. I will probably revisit in a year and possibly sell to move the funds to my self-directed RRSP investment account in order to avoid compounding of the management fees.
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