Good news. The FTQ Solidarity Fund will be reestablished as of 1er June 2024, contributions to your RRSP in a lump sum amount, i.e. from the start of the next financial year 2024-2025. Finally!
It will be almost three years since most small savers have been able to contribute a single payment to the RRSP of the Fonds FTQ.
Under the pretext that the ceiling for contributions to the FTQ Fund has been reached annually since January 2021, only contributions through regular deductions from salaries are permitted, until the end of the current fiscal year on May 31.
As an alternative over the last three years, small savers interested in also benefiting from the attractive tax credits offered by the two levels of government (15% from Quebec, 15% from the federal government) have been “forced” to invest their RRSP in single payment into Fondaction de la CSN.
Important fact to note: RRSP contributions by single payment for the current year are still permitted at Fondaction.
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Contributions to the two workers’ funds are limited to a total amount of $5,000 per year, which gives entitlement to $1,500 in tax credits ($750 from Quebec, $750 from Ottawa).
Over the last 10 financial years ended May 31, the FTQ Fund provided its 766,000 shareholders with an annualized return of 6.9%. During this same period, Fondaction de la CSN provided its 214,000 shareholders with an annualized return of 4.8%.
This is obviously not an easy task. But with tax credits, the return is improved. The Fondaction and Fonds FTQ portfolios are made up of a significant portion of Quebec SMEs, including fixed income securities (bonds). This is also what explains why shareholders benefit from the attractive tax credits offered by the two governments.
During this 10-year period, the Canadian Stock Exchange (S&P/TSX) reported an annualized return of 7.6%, the American Stock Exchange (S&P 500) a return of 15.1% and the world markets (MSCI World except USA ) a yield of 7.4%. Returns are all in Canadian dollars.
Archive photo, Joël Lemay
THE PRICE REVISION
Thanks to a superb rise in the stock market in November, our two workers’ funds have just had a narrow escape with regard to their 1er semester ended on November 30.
During the month of November alone, the Toronto Stock Exchange barometer, the S&P/TSX, climbed 7.5% and the main index of the American Stock Exchange, the New York S&P 500, did better with a gain of 9.6% in one month.
The knock-on effect of this sharp stock market rise on the portfolios of the FTQ Solidarity Fund and CSN Fondaction will probably allow them to complete the first half (from 1er June to November 30) in positive territory. And thus avoid having to revise the price of their shares downward.
I remind you that the two workers’ funds review the price of their respective shares twice per financial year, i.e. at the end of their first semester on November 30 and at the end of their second semester on May 31.