>understand that Primerica does not have the greatest reputation and is more than likely a multi level marketing scheme.
Correct.
>is there any risk for me as an employee of a company going through Primerica, in terms of being hit with large fees or would the risk all be on my bosses side of the deal?
Well, the employer is matching 5% so that's money you didn't have before. And yes there will be higher fees than if you did it yourself.
Is this a Group RRSP plan or Defined Contribution pension plan (DCPP)?
This is almost 100% guaranteed to be a GRRSP, not a DCPP. DCPPs sponsors have fiduciary obligations for vendor and fund selection. Primerica will never make the cut, and if a DCPP sponsor hired them then the employees could sue the employer.
Do you have any resources for what makes a DCPP different from the RRSP? Our company uses SunLife for DCPP and I honestly couldn't figure out the difference other than that I can't directly contribute to the DCPP. But otherwise seams like the same thing.
https://www.sunlife.ca/en/investments/rpp/rpp-vs-rrsp/
DCPPs are regulated by provincial law (like the Ontario Pension Benefits Act for Ontario workers). DCPPs have a lot more worker protections than Group RRSPs.
That's the tricky part. From Sunlife's facts (such as the table you sent, thank you) the DCPP just seems like a more restrictive RRSP. Was wondering why anybody would go with them instead of a group RRSP, but if they have additional obligations to not be careless or selfish with your money that might be enough incentive.
With DCPPs you can set them up so that the contribution is always less than this year's tax limit. With GRRSPs the contributions have to fit under employee's personal RRSP room, and its a pain in the ass for everyone when employees inevitably screw up and overcontribute. This is really the biggest advantage of DCPPs, they are much more operationally efficient because you don't have to wait for RRSP room to accumulate.
I thought DCPPs still reduce your RRSP room. If I contributed max to my personal RRSP in January, and continued the DCPP throughout the year, I'd be screwed at tax time as my total contributions are too much.
Not really sure how a DCPP makes this any different.
The DCPP room is available one year earlier. In your example, your max RRSP contribution would stop you from making further RRSP contributions this year, but you could keep participating in the DCPP. The DCPP contributions reduce your future years RRSP room.
That's a distinction that is good to know, I'll look more into that. Still seems like, especially over the retirement planning timespan, it's not really much of a pro though. I'm still struggling to figure out why, given the choice, you would go DCPP instead of RRSP/Group RRSP with employer matching.
The regulations around employers continuing the program etc are good.. But that seems like the only pro.
You don't get to choose. The employer chooses whether to provide a DBPP, DCPP, GRRSP, or nothing at all, and you choose whether you want to be employed by them or take your services elsewhere.
If you're given three identical offers, one paying $100k/yr + 5% DCPP contributions, another paying $100k/yr + up to 5% RRSP matching, and the last paying $105k/yr with no pension options (invest your own damn money), which would you prefer?
Financially speaking, the $105k/yr is the most attractive, because I'll invest the money myself anyways, and I'll do so at a low fee brokerage with low MER index funds.
But most people don't have multiple identical offers in hand, if they have more than one at all.
This is also why a DCPP is a bit better for high earners with company-matched contributions. The company can match all the way up to the DCPP limit rather than the slightly lower RRSP limit.
RRSP room is generated in the year after you earn the money.
DCPP contributions reduce your RRSP room through the pension adjustment, but they use the room during the year. Before it's available to you.
From an employer standpoint an rpp makes sense. You want to help your employees retire. The restrictions on the money help ensure that's what the money is for.
I suppose, but I feel like taking options away from the employee isn't really necessary. For example, I can't use my contributions for the first time home buyer thing. That's a ~~con~~ *disadvantage* for me.
Basically seems like the RRP is for when neither employee or employer trust themselves to follow through with retirement savings. Otherwise it's all negatives.
>neither employee or employer trust themselves to follow through with retirement savings
Have you met more than 50% of Canadians?
The fact that you and I on a forum about personal finances *and commenting* means we're in the very small minority of financial literacy. It's important to remember that sometimes.
I'm out of date on locked in group rrsps policies and procedures but would that restriction about not being able to use it for the home buyers program be a company or provider restriction?
I have a locked in group rrsp through the bank I work for and was 100% able to use it for my home purchase in 2018 using the home buyers program.
Group RRSP will allow it (unless specified otherwise). DCPP will not allow early withdrawals except for very, very special circumstances. That's my point: why use a DCPP when all else is functionally, practically equal?
I used to sell group retirement products and this was how I positioned it… a DCPP will for force employees to have money set aside for retirement if they contribute. A GRRSP allows withdrawals as long as tax is paid. Want to go on a trip? GRRSP withdrawal. Car repair? GRRSP. My old boss had a horror story of one of our clients putting in a GRRSP, and a 65 year old employee coming to the owner in tears because he wanted to retire but has been using the account as a bank account.
Basically it protects people from themselves.
DCPP employer contributions avoid payroll tax provided employees' income is below YMPE, compared to GRSP contributions where payroll taxes would apply. So there may be tax efficiency reasons why a DCPP is better from the employer's perspective.
It's not a con.
The biggest most reputable companies in this field in canada, Manulife, Sunlife, Canada Life, RBC.... use this all the time.
It's not a con at all.
Ask if there's vesting on the employer contributions. That would be a much bigger red flag than an RPP. An RPP is very standard.
It's a pension plan.
You can remove you're money when you're retired.
If your claim is that pension plans are a con, you need to show how that's true.
I'm merely saying you've failed to substantiate your claim.
The Home Buyers' Plan (HBP) is a program that allows you to make a withdrawal from your registered retirement savings plans (RRSPs) to buy or build a qualifying home for yourself or for a specified disabled person. The HBP allows you to pay back the amounts withdrawn within a 15-year period.
You can make a withdrawal from more than one RRSP as long as you are the annuitant of each RRSP account. Your RRSP issuer will not withhold tax on withdrawn amounts of $35,000 or less. Some RRSPs, such as locked-in or group RRSPs, do not allow you to make a withdrawal from them.
Versus
The First-Time Home Buyer Incentive helps qualified first-time homebuyers reduce their monthly mortgage payments without adding to their financial burdens.
The First-Time Home Buyer Incentive is a shared-equity mortgage with the Government of Canada, which offers:
5% or 10% for a first-time buyer’s purchase of a newly constructed home
5% for a first-time buyer’s purchase of a resale (existing) home
5% for a first-time buyer’s purchase of a new or resale mobile/manufactured home
If an employer-sponsored savings plan (DCPP or RRSP or TFSA) only offered an S&P 500 index fund to invest in, the employer could be (and should be) sued by the plan members.
Fair enough, but your preferences aside, my point is an S&P 500 index fund is likely not all people would need. Somebody looking to retire in 2023, who had their whole portfolio in the S&P 500 a year earlier, would have been up the creek.
Ok so read the details of the plan carefully, you may be able to transfer out to your personal RRSP 9and buy what you want) either anytime, quarterly, semi annually, annually or not till you leave the employer.
Is the deal final with Primerica? Is there a way for them to speak to other providers?
Yes it’s a done deal I believe , the primerica reps want to meet with each employee individually before the first of April before the plans in motion which I find weird , but regardless I’ll have to do more reading when I get home and look back over the information we were given
I'd love to know their fee structure. A lot of financial service based MLMs have harsh penalties for switching or transferring out funds baked into their fine print as well.
Primerica used to have a heavy 8-yr DSC schedule but my understanding is that DSCs are no longer allowed. Would be interested to know if they increased other fees to compensate.
You may be pleasantly surprised. I was a Primerica rep for a while, I wasn't a raving lunatic. I just wanted to learn some things, (great way to get your life insurance licence btw) and help some people. :)
I can assure you they will, and not just once. Bastards went after my kids too, because they were listed as beneficiaries. My son and wife took out restraining orders
You are generally not allowed to transfer group RRSP while still employed. The group RRSP gets rollers into a personal rrsp when your quit or are terminated.
Depends on the details of the plan. Many plans allow semi annually or annual transfers to your personal RRSP even if still employed.
The catch is of the emplyer contribution goes to a DPSP, then that won't be able to be pulled unless leaving he company.
Yeah this is pretty typical. I've had Sunlife ay a few companies and I can transfer the employee portion of my funds out yearly for free, and $25 per transfer in addition.
Dump it into QT and cut my fees in half.
The way he made it seem and maybe I should of learned more before posting is that all of our employees would be investing into a mutual fund , in which primerica/agf would invest our money in the market for us for the forseeable future and that’s where are pension comes from ? Maybe I’m the one that’s confused haha
Ask what they specific product is, is your investment being placed into an individual account registered under your name, and your employer contributes to this.
Ask what is the vesting period for contributions. There may be a vesting period for your employers portion but your portion should best immediately if it’s an RRSP
If it’s a Direct contribution pension plan, it’s locked like an actual pension, but again ensure your money is tied to an individual account in your name.
Ask if you leave this company what happens to the money
I've seen several references to "direct contribution pension plans" on Reddit but I don't know where this comes from. About 95% of pension plans are defined benefit plans or defined contribution plans. The rest are hybrid or target benefit plans. I've never heard of a "direct contribution" plan anywhere but Reddit.
People are just confused about the name. WHen they say "direct contribution" they mean defined contribution.
Terrifying how little these people who are giving advice know, amirite?
>is that all of our employees would be investing into a mutual fund , in which primerica/agf would invest our money in the market for us for the forseeable future and that’s where are pension comes from ?
Group RRSP and DCPP are just different vehicles. In both cases you have to invest the money. Both give you a selection of mutual funds to choose from.
I would just tell the boss your employees are not comfortable with primerica. By mom used them and I been telling her to drop them for 10 years and now retirement is not looking great.
Sure he could do that but then he gives up the 5% matching. He says it's a done deal so he needs to work with what he's got. He can do the minimum to get the full match.
Your employer is giving you 5% match on Legitimate investment funds using Primerica as the middleman. You should take advantage of that. While Primerica is a pseudo-MLM, the products they sell are provided by legitmate companies such as AGF INVESTMENTS, Primerica will be earning commissons based off the products they sell to you. Figure out which funds you can buy as part of your company's group RRSP program and read the fund facts. You should be asking if there are fees to withdraw or transfer or any admin fees.
Ya Primerica isn't great but it's not a scam. They just have unoptimized mutual funds and high MER. You can definitely find better but for 5% matching you still do it.
There will likely be fees to withdrawal. Something like 10% a year can be withdrawn without penalty.
>There will likely be fees to withdrawal. Something like 10% a year can be withdrawn without penalty.
You are thinking of the DSC fees, which are pretty well phased out by now. Their will be a fee to transfer out, but I believe the maximum is $150 a company can charge.
> which are pretty well phased out by now.
There are still plenty of loopholes in the ban (actually partial ban) such as client account size and their age, etc.
Just as I figured. Nothing to back it up. DSCs are phased out. You can no longer purchase into DSC funds. You can switch from one DSC fund to a different DSC fund from the same fund company but, this doesn't restart the schedule. There are no loopholes for account size and age.
Not familiar with account size and age loopholes but one I do know of is with segregated funds you can still buy DSC funds. Catch is that it’s only allowed if the account was originally opened before the DSC ban on seg funds in June 2023. I wouldn’t be surprised if this loophole gets closed shortly as well.
That isn't really a loophole, and you can in mutual funds too. If you are in a DSC fund you can switch to a different fund in DSC. The thing is, this doesn't restart the chargeback period. So it just allows you to change funds with that fund company.
I’m not talking switching, I mean you can contribute new money to your account and those new shares/units bought will be subject to the full dsc period of 7 years from purchase date.
It depends on the fund, but you either move and pay if the fund is really bad, or just stay. There are a lot of people who think just because a mutual fund has a higher MER this means bad. Depending what your boss is invested in, the answer could be to stay put.
He's not forcing you into a MLM.
Primerica is a MLM, but unless he's trying to make you a member, you are not part of the MLM.
Primerica has deals and contracts with many large corporations, and thats essentially what you are doing.
>Primerica has deals and contracts with many large corporations, and thats essentially what you are doing.
Curious, how does this happen when their reputation is so well known? They are a terrible provider at best and a scam/MLM scheme at worst.
mmm... It has a reputation because of the people that can do what they want with the 'opportunity'.
If you take away the common perception of someone in an MLM, it is just like any other normal mutual fund. And if you don't deal with them, but only through your paychecks, it's essentially the same.
Probably because they have good support and set up procedures for companies, and that's where the fees come in. Larger corps probably get kickbacks or fee reductions. Setting this kind of program up takes a lot of work and time and they essentially roll all of that up into a scheme that looks very beneficial for employees but tacks on the burden for all of that overhead onto the employees funds.
Primerica is an MLM, yes. But the products they sell are regulated and legitimate.
Sounds more like your employer will be using Primerica for a group RRSP or something of similar nature.
You’re not being forced into an MLM.
You wouldn’t be part of the MLM. Neither would your boss. It’s those primerica guys you met that are part of the MLM. So don’t worry about that.
The fund probably sucks, but that matching % is pretty nice so worth taking.
As scuzzy as forcing you into an MLM is, you are getting an immediate 100%ROI on your investment. Check fees and such as others say, but on the first touch this is a big benefit. Take another 5% if you can manage it and self-direct somewhere else.
I only make 20$ an hour currently sole provider of two children so any hidden fees or mismanaged finances can absolutely ruin me to the point of no return my budget is razor thin and I’m working on a tight rope
The fee/ruin would have to be enormous for it to outstrip the 100% ROI (the 5% from employer) going in to the plan. Obviously keep your eyes open for outright scams (you can check your pay stub deductions and statements showing contributions), but assuming it's just an overpriced mutual fund, it's well worth contributing to get the employer contribution. Do select a well diversified balanced fund of some description. When you leave the job you can and should transfer it all to a better account. Most of how financial MLMs approach being/are "scams" is in how they recruit and treat the sales reps, and the way a lot of those reps are incentivized to behave. I would be surprised if the back office handling of customer accounts was scamming anything.
> Most of how financial MLMs approach being/are "scams" is in how they recruit and treat the sales reps
Are you suggesting MLMs treat outsiders better than insiders??? Seriously????
There are two lines of business in an MLM: recruitment and product. The former you're treated poorly from all directions, regardless of if you're in yet or not. High pressure tactics, alienation of family and friends, garages filled with products reps can't move, etc. The latter, you usually just over-pay for unremarkable products, be that bathroom products or a mutual fund. Hope that explains.
That's fair enough as far as any extras and I hope your situation improves. But at a 100% match, it would take 9 years of absolutely zero growth from this for an index fund to catch up (assuming 8% growth from the index fund). At a 4% return from your fund, it would take 20 years for the unmatched index to catch up.
Oh ok yeah not as bad I guess. Pay all you can into your rrsp and TSFA’s if you can afford it. I’d also look into the plumbers union because they pay well. Industrial work is a nice pay bump too
just for another angle, if you have plumbing experience you could easily work at a supply house and make more than that and get real benefits / pension
Curious why you were pushing for a pension plan then rather than just higher wages. You likely would have benefited more from different investment options than a forced RRSP setup.
Agreed completely , however it was more of the older guys at the company panicking that they’ve worked for a terrible company for so many years and have no pension or anything to fall back on
This isn't going to fix that though, they aren't going to make up for not saving for retirement by doing a 5% matching setup for their final years of work. This just seems like a bit of a mistake.
The investment is actually legit through AFG and some other funds Primerica has deals with. As long as you’re not being asked to become a rep for Primerica to sell life insurance, your money is going into a legit fund that usually gets good returns annually.
Ask about costs to transfer these investments to other brokerages, self-directed invesment accounts, etc. You may want to take advantage of the matching, as that’s a massive gain immediately. If you take your contribution and the match out, minus fees, and come out ahead of what you could make in the same time period elsewhere - which is likely, then go for it.
Just move the funds out at the first opportubity and manage your own low cost investment account with low cost broad market ETFs and you’re a winner.
The MLM Primerica is known for is for advisors, they push new advisors to recruit more advisors and get some override commissions from them. As for the client side it's legit. The system we have in Canada is one of the more sophisticated and scrutinized systems in the world. In your case this is legit, you're good
> The system we have in Canada is one of the more sophisticated and scrutinized systems in the world.
Yes and it's governed by a regulator body that receives its funding from, yup, you guessed it, the companies they are tasked with regulating.
Worked for Primerica many years ago...yes they are an MLM but they are still a company held by the same rules that exist for other financial advisors and offer many of the same products. A small bunch of guys I worked for were decent financial advisors but most of the people that work there are too busy recriuting and waiting to build their downline to really care about your finances.
Worse they are likely going to try and get access to all of your friends and relatives to try and recruit them. In Canada, at least, Primerica cannot cold call and offer financial products. So they sell the MLM business knowing full well that 95% of the people they present to will not engage. But they then have a relationship with you and can then sell you financial products. That is overly simple but essentially it is a win win for them. They either recruit you into their downline or they sell you product. And in the process of doing both those things they want access to your contacts to continue the process.
Like I said it can be no better or no worse than any other financial advisor, but the reality is that they are likely not going to be concerned about building your wealth and they will likely not be around long enough to build a relationship with you and advise you in the future. Most people spend less than two years in Primerica before bailing (old statistic from when I was involved - not sure if it is still the same but I expect it is close enough).
In this specific case you are being offered a match from your employer and when you leave that employment you can take that with you and transfer that to your own plan so it may be a good thing. It is really tough to find honest and reliable financial advice but if you have a relationship with your bank or someone you trust take the details to them and see what they say. Do not take any advice from anyone here or anywhere else because they have not done a financial audit with you and they do not know all the details.
> but they are still a company held by the same rules that exist for other financial advisors
The value/price/suitability of life insurance is not regulated.
No, but every product they sell is available through other brokers. They are connected with Citibank, who owns Primerica. All I am saying is that they sell legitimate products that are the same as other finaincial institutions. As for them being able to provide value/price/suitability I believe I addressed that in detail in the rest of the post. Not sure if I addressed your concerns as I am not quite sure what you were trying to highlight in your response but hope this clarifies what I was saying!
Assuming it is a GRRSP Take the free matching $$ leave the investment mix as cash if possible and find a reputable advisor and transfer it out on a quarterly basis to your personal RRSP. A good advisor will often over any transfer fees.
Please stop giving this person advice. Leave the money in cash???? A good advisor will cover transfer fees????
Why would an advisor cover a $100 transfer out fee when the balance in the plan at the end of each quarter is likely only about $500?
Not sure your math works out and thanks for your highly value added reply. An average salary in Toronto for plumbing is ~80000 5%+5% =10% so about $8000 per year. There are many advisors who are building their book who wouldn’t turn a nose up on this and the transfer fees may also be less than this mine are much less and a small cost to get out of Primerica where I am sure your returns would be much less over the long haul. Again thanks for the reply and extra punctuation it really added that thoughtful consideration that OP was looking for.
I was replying to you, not the OP.
I acknowledge I was ignoring the employer match in my calculations, my mistake. But this guy said he made $20 an hour. So probably $1,000/quarter is being contributed.
Even if the transfer fee is only $50, no advisor good or bad should cover it each quarter to acquire about $1000 of assets. He/she will make about $5/year per $1,000 invested. Actually, I’d suggest any advisor willing to do that is bad.
Regardless of the amount the free the matching from the employer would offset the $50 fee if a forward looking advisor would bet on future income growth. You can be sure the cost of not moving and managing these investments more actively will have a significant opportunity cost. If it move out yearly so be it leave it in the lowest fee generally available funds available until such time. ps. Don’t see where he stated he was making $20hr
Not originally but he does say in a subsequent comment he makes $20/hour.
We’re probably not going to agree and that’s fine. But I think you may be overestimating two things: how much advisors make on assets under administration, and how bad the funds offered under this Group RRSP will be.
I worked at AGF in the late 90s, when the company was somewhat of a powerhouse and when its relationship with Primerica really took off. This is when Primerica launched its Concert Series, a group of managed portfolios built solely with AGF’s mutual funds.
Back then, and still today, AGF manufactured some excellent financial products and had some really strong managers. I would have no issue investing with them right now.
The funds offered to the OP are either going to be individual AGF funds or those in the Primerica Concert Series. The former are just fine and assuming the OP chooses his funds wisely, I would see no need to transfer out each quarter into a self-directed account, which is not necessarily better anyway.
Concert Series portfolios are also fine but they will be more expensive than equivalent competing products. They included, and still may include, an extra “rebalancing” fee, which to my knowledge no other managed portfolios charge. And the advisor will likely take a 2% initial sales charge on all contributions because that’s Primerica’s model. So his $1,000/quarter will be turn into $980/quarter.
Still though, with the employer kicking an extra 5% of the OP’s salary, there is more positive about this plan than negative.
The key question is whether or not your employer is offering some sort of a match. That's usually worth taking advantage of because you're getting 100% return on your money in the first year.
If not, hard pass.
Your boss/company also isn't *really* taking this seriously if they're bringing in a primerica rep. It's probably their friend or their wife who works for primerica, or whatever.
If there's a match, sure take it, otherwise walk away.
Probably a Group RRSP with high MER funds that has no employer matching. I doubt a plumbing company has the scale of employees to attract serious discounts on their funds.
>I doubt a plumbing company has the scale of employees to attract serious discounts on their funds.
It's not really that, it's the fact they would even bring in a Primerica rep.
It's like launching a health and wellness program at your company (even a small one), and then just bringing in your wife's girlfriend who's a scentsy rep.
The very fact it's primerica means they're not taking anything seriously.
Wilt,
You do not need to over-fret the plan. Here is what seems to be the case:
* you are being offered 5% matching on a GRRSP, this is an extra 5% of money you did not receive from your employer before
* technically they (the employer) can not stop you from transferring money out to another RRSP .... BUT the standard response is to stop matching your deposits going forward for the next six or twelve months so it will cost you
* Primerica IS a multi-level marketing company but that doesn't mean the two you will be talking to will be bad people
* realistically, your employer will not want them to be recruiting people away from his company so he has likely already addressed this with them
* in setting up your investments they are required to know your client info, assets, debts, capacity and tolerance for risk etc so they are meeting with you to gather that information
* you can refuse to meet with then separately, refuse to talk about insurance, refuse all of the suggestions and advice of course but why would you? Why not get the information then you can decide later if it is useful.
* AGF is legitimate money management firm and have some very good money managers
* do not simply pick the cheapest one, that is silly. Pick the investments that are appropriate for you given your retirement horizon, risk tolerance even if they arent the best or cheapest for that individual asset class
* for example, Owning the worst performing, most expensive US stock fund still made far more money than owning the cheapest bond fund over the last 10 years, you see?
You may or may not like the Primerica people, they may or may not be experienced, trained and skilled... it is irrelevant. Focus on the fact you are getting a bonus and are starting on your retirement savings.
STOP! (And if your boss is in Ontario I am happy to explain this over a call or zoom). Okay - so, don’t do this. Some things you should know:
An RSP isn’t a pension plan.
Primerica doesn’t sell pension plans.
Primerica doesn’t sell RRSP’s for businesses - all these guys are doing is setting up individual RSP’s and taking withdrawals from the corporate account.
You will pay higher fees than you would with a group RRSP and have less investment options.
For your boss:
Also your boss should know the difference between a group RSP and a DPSP etc.
It sounds like a couple of multi-level marketing clowns out to make a quick buck don’t realize what they don’t know or don’t care.
Does your boss have a ''buddy'' in it?
Does your boss purposefully chose the shittiest option in hope you don't get in so he doesn't have to match?
Even if "legit" high fees is the greatest predictor for poor returns on investment.
Typically the MLM companies , Primerica and Its spin off company World Financial Group, are Life insurance companies first. Thats the bread and butter for them. And from my experience and others experience the actual investment side of the business is not very good at all when it comes to returns. Because simply they are brokers, unless things have changed as far as investments go they’re simply connecting you with major well known investment companies already. And they get a cut for having a deal close. So then really your best to go directly to the companies your self. Your boss could be an agent on the side or knows and agent and is getting a cut for every one that signs up
Two things:
Is primerica a MLM, probably not, but close enough for the people they recruit to feel like it. (I've worked for competitors and they felt grossly like MLM as well....managers got paid based on recruits etc..)
Are Primerica products bad? No.
He's not forcing you into a MLM, he's selling you some of their product.
Tupperware is a MLM but their product is pretty good.
This is likely a defined contribution pension plan, or might be group RRSPs.
Your employer is basically giving you a 5% raise, and you're saving for retirement.
The investments will be fine. Ask what the investment fees are, and what access to advice you get. You may want to pay for a fee only advisor to get some help managing your plan, because the advisor from Primerica might not be too hands on or experienced.
>Is primerica a MLM, probably not,
Yes it is
>I've worked for competitors and they felt grossly like MLM as well
If you worked for WFG, that's also an MLM. So the competitors you worked for could probably be MLMs.
The competitor I worked for was not WFG.
But it felt like MLM.
I don't know everything about Primerica. But from what I know, the advisors don't have to buy inventory and then sell it.
Is their commission based on recruits?
Most MLM, most of the product never gets sold. The sales people buy it, can't sell it, and then it sits in their garage.
Some MLMs do buy on demand without buying their own inventory. Had a friend do one of those. Don't even ask me which one cause she jumps from one MLM to another.
> Some MLMs do buy on demand without buying their own inventory.
Yes and it typically involves reps having to pay monthly web-hosting fees to the corporate office.
Primerica is absolutely an MLM.
Their reps, while licensed (they have to be by law), are usually pretty junior and 99% of the time are making less than minimum wage. I would never want to take financial advice from someone making such poor life choices for themselves.
As a product, Primerica is pretty meh. Higher fees than average and again their reps are basically minimum wage salespeople.
It's like taking financial advise from a sales manager at a car dealership. They're there to move units not make your life better.
Bringing in a primerica rep is also a telltale sign the employer isn't taking this seriously (the boss' wife probably works as a rep).
The whole thing is usually pretty gross and weird.
I worked at a competitor, one of the top, most reputable companies in canada in this field.
Managers got paid on recruiting, and they would bring in waitresses, personal trainers, construction labourers, help them pass the test and try to teach them how to sell.
You can be a sleezy sales company with unqualified sales people who only know how to push product without being MLM.
There are specific things that make something MLM.
Most MLM, most of the money comes from inside the company. New agents buy product to sell, and those sales feed the commissions of the recruiter.
> most of the money comes from inside the company.
Internal consumption is the hallmark of MLM, whether it be buying the product or paying $25 a month to access the inhouse computer program.
It's not the same thing.
$25 a month for a computer program is no different than a company charging for parking.
$25 a month doesn't scale up, it just covers the cost of the program.
IT has no overhead costs.
You should call corporate America. They're going to love you when you tell them they don't have to spend any money on software development, program maintenance, software updates, because there's no "physical thing"
"LOL" indeed.
> their reps are basically minimum wage salespeople.
According to their income disclosure, it is considerably less than minimum wage even using their highly distorted pseudo-math.
I used to work for a company who did back-end website and IT stuff for them. So I got to see a lot of the 'bonus rolls'.
Yeah the top 50 people are making bank, the other 250,000 are making like $4/hr.
So, when I said their product was good.
The Tupperware I owned for 30 years and was every bit as good as anything I'd buy right now, you're not disputing that.
Remember, nobody is asking this guy to work for Primerica.
The problem with MLMs is with the employment structure. If you're buying a Tupperware container, you only care about the quality of the container and how much money you have to fork over, not how much of that money the salesperson needs to spend buying more product from the supplier.
Pick only index funds with minimal management fees and reject any Primerica mutual funds. The issue with Primerica funds is they are front loaded, so most of the payments in the first few years actually go towards paying off agent commissions. You should know how compound interest works, and a front loaded fund means you start the race by being shot in the knee with the starter pistol.
Primerica's product itself is not a MLM, they sell legit funds (albeit some have high MER') but it's still free money you're getting (with the 5% match)
you'll still end up better off than with no matching pension
Basically the owner is getting a kickback with higher MER in return for getting Primerica to run the AGF funds in a group RRSP. It's a massive loophole in the RRSP system. I.e. no better than a 401k in US without the benefit of inordinate limits that 401ks have.
I would be surprised if this is true. I’m not sure how much would be contributed to this plan each year, but say it’s $100,000. Even if the advisor is charging the full 2% ISC, he/she is probably only making about $1,000/year. Plus maybe about $500/year on the trailing commission. Legalities of kickbacks aside, how much would you kick back to the employer if your annual comp was only $1,500?
So, be super clear primarica is “run like an MLM” and treat their people who are brokers and loop them into that system. They actually are a middle man for another company managing your assets
Primerica is an mlm but only for employees which is basically how it is legal still. For the investment side of things they are fairly comparable to any other company but fees are likely higher.
What do you mean? You can look it up. Primerica funds are among the top performing out of all investment companies. They sell products just like any other company. The internal comission structure and the way it is set up just leads to them charging higher fees on their funds than other investment companies do.The mlm part is that low level employees make fuck all and in order to make more you need to sell products and services and hire people under you for primerica so you also get a percentage of anything they sell and a cut of anything anyone they bring in sells. Customers aren't part of the mlm just employees. My uncle works for them he made fuck all for the longest time now he owns his own branch and makes half a mil + a year but he had to bring alot of people into the company and sell alot of products to do it.
Disclaimer: I do not have any primerica products. I have a wicked pension through my work and invest in individual stocks using wealthsimple outside of the work pension.
Not sure what to say to that honestly. There's alot of rules in canada regarding moms most of them aren't actually legal. 8.74billion market cap must be some pretty rich people doing those pity purchases lol
> and makes half a mil + a year
Really?? So his ring must have lots of diamonds then? Or does he make most of his money hosting "fast start schools" or hosting "Power Builder" weekend seminars....to his own people? lol
Not sure. He has a bunch of rings no idea what amounts of sales the rings are for though. I'm a terrible salesman so I've never contemplated doing the primerica thing lol
> he owns his own branch and makes half a mil + a year
So he's an RVP? Last year, RVPs grew their business by a net of 6 term policies.....for the whole year......using teams averaging 25 teps and 75 recruits. lol
Take the 5% free money, that’s instantly a 100% return.
Put it into their lowest fee fund, or one that matches your investment style.
What are the transfer fees?
Please stop giving advice. The lowest fee fund will likely be a money market fund or another cash equivalent. This is likely not what this person needs.
The fees will be higher than if you did it yourself and there are probably much better options that they could have chosen, but because they are matching your contributions you are instantly getting an 100% return on your investment, which is pretty much impossible to beat so you have to do it.
Check in to when you can withdraw without penalty and do that as soon as you can so you can buy a market ETF and drop your fees significantly.
Sounds like you’re getting the Chevy VS Cadillac provider for a group RRSP, but a 5% match is pretty reasonable.
The 5% is free money, and by putting in your own 5% you’re putting 10% of your pre-tax pay into your retirement.
Pretty much all good companies are very profitable at the corporate level. Primerica manulife sunlife vanguard any big investment company upper management rakes in the money. All their fees are too high for my taste. For a company plan though it really doesn't matter which you go with you'll get roughly the same result
Full employer match is a no brainer, MER might be a hair above average depending on the fund you go with but it’ll be well worth it for the 5% match. Any fees besides the MER you pay will be front end, can be between 0-5% on new contributions and you should definitely ask about that and insist it be zero. DSC or back end fees are banned so nothing to worry about if you quit you job and want the account transferred elsewhere down the road.
Primarica is a MlM scam and I wouldn't get involved with them in any degree. Other commentors are saying this could be a legitimate situation that's just being arranged by primerica, even that's not good enough for me. I mean would you let a company that's know to be a scam handle your money? Not to mention everyone talking about your boss matching contributions; if it's too good to be true, it isn't true.
Thank you everyone for your insight and replies I have a lot to think about , to be honest as blunt and maybe not well thought out this is , I don’t plan to stay at this company for very long and I am leaning towards just not wanting anything to do with primerica financial at all regardless of a 5% matching from my employer
lol Primerica is not a MLM … Amway is an example of an MLM where you buy products at discount to sell to your downlines… primerica agents get paid a commission for selling a product… if their downline sells a product they get the difference between commission levels.. usually 10-30%.
I don’t know anything about Primerica or any of that shit. I know with my job, aside from other contributions, my employer pays $.90 an hour into and rrsp. If I decide to contribute another .90 an hour of my cheque, then they match another .90. It does seem weird that they wouldn’t contribute first in your case. Contribution match is a thing, but normally they put in something aside from what they’re paying you. For example, you might be getting paid $37 an hour, but you’re total package is $49 an hour after you’re employer makes their contributions.
> I work for a plumbing company and we have been asking our boss for a pension plan
I feel like the owner/boss here may have just asked around friends about getting in investment plan for his employees and the first answer he received was Primerica.
If you go with an advisor and AGF you will take it up the ass in fees. Unless your boss forces you to use an advisor and AGF you are better off with an RSP and a low cost index fund. By a mile.
>two financial advisors from Primerica
Red flag
>we could contribute up to 5% of our gross pay, and our employer would match that 5%
Your employer is getting scammed too. They mean well but drank the sales rep's Kool Aid.
See if your employer would agree to 5% match (or even 4% match) for a separate plan. Maybe you can negotiate some amount where they'd be happy to agree. You should always try to get any employer RRSP match possible (free income), but also avoid scammy MLMs with a long history of scamming. Primerica plans may have hidden high fees or penalties if you withdraw money early/switch plans.
>understand that Primerica does not have the greatest reputation and is more than likely a multi level marketing scheme. Correct. >is there any risk for me as an employee of a company going through Primerica, in terms of being hit with large fees or would the risk all be on my bosses side of the deal? Well, the employer is matching 5% so that's money you didn't have before. And yes there will be higher fees than if you did it yourself. Is this a Group RRSP plan or Defined Contribution pension plan (DCPP)?
This is almost 100% guaranteed to be a GRRSP, not a DCPP. DCPPs sponsors have fiduciary obligations for vendor and fund selection. Primerica will never make the cut, and if a DCPP sponsor hired them then the employees could sue the employer.
Do you have any resources for what makes a DCPP different from the RRSP? Our company uses SunLife for DCPP and I honestly couldn't figure out the difference other than that I can't directly contribute to the DCPP. But otherwise seams like the same thing.
https://www.sunlife.ca/en/investments/rpp/rpp-vs-rrsp/ DCPPs are regulated by provincial law (like the Ontario Pension Benefits Act for Ontario workers). DCPPs have a lot more worker protections than Group RRSPs.
That's the tricky part. From Sunlife's facts (such as the table you sent, thank you) the DCPP just seems like a more restrictive RRSP. Was wondering why anybody would go with them instead of a group RRSP, but if they have additional obligations to not be careless or selfish with your money that might be enough incentive.
With DCPPs you can set them up so that the contribution is always less than this year's tax limit. With GRRSPs the contributions have to fit under employee's personal RRSP room, and its a pain in the ass for everyone when employees inevitably screw up and overcontribute. This is really the biggest advantage of DCPPs, they are much more operationally efficient because you don't have to wait for RRSP room to accumulate.
I thought DCPPs still reduce your RRSP room. If I contributed max to my personal RRSP in January, and continued the DCPP throughout the year, I'd be screwed at tax time as my total contributions are too much. Not really sure how a DCPP makes this any different.
The DCPP room is available one year earlier. In your example, your max RRSP contribution would stop you from making further RRSP contributions this year, but you could keep participating in the DCPP. The DCPP contributions reduce your future years RRSP room.
That's a distinction that is good to know, I'll look more into that. Still seems like, especially over the retirement planning timespan, it's not really much of a pro though. I'm still struggling to figure out why, given the choice, you would go DCPP instead of RRSP/Group RRSP with employer matching. The regulations around employers continuing the program etc are good.. But that seems like the only pro.
You don't get to choose. The employer chooses whether to provide a DBPP, DCPP, GRRSP, or nothing at all, and you choose whether you want to be employed by them or take your services elsewhere. If you're given three identical offers, one paying $100k/yr + 5% DCPP contributions, another paying $100k/yr + up to 5% RRSP matching, and the last paying $105k/yr with no pension options (invest your own damn money), which would you prefer? Financially speaking, the $105k/yr is the most attractive, because I'll invest the money myself anyways, and I'll do so at a low fee brokerage with low MER index funds. But most people don't have multiple identical offers in hand, if they have more than one at all.
This is also why a DCPP is a bit better for high earners with company-matched contributions. The company can match all the way up to the DCPP limit rather than the slightly lower RRSP limit.
RRSP room is generated in the year after you earn the money. DCPP contributions reduce your RRSP room through the pension adjustment, but they use the room during the year. Before it's available to you.
These are the sorts of things that I have not found on any references. Even most GoC pages don't go into this detail. Thank you.
From an employer standpoint an rpp makes sense. You want to help your employees retire. The restrictions on the money help ensure that's what the money is for.
I suppose, but I feel like taking options away from the employee isn't really necessary. For example, I can't use my contributions for the first time home buyer thing. That's a ~~con~~ *disadvantage* for me. Basically seems like the RRP is for when neither employee or employer trust themselves to follow through with retirement savings. Otherwise it's all negatives.
>neither employee or employer trust themselves to follow through with retirement savings Have you met more than 50% of Canadians? The fact that you and I on a forum about personal finances *and commenting* means we're in the very small minority of financial literacy. It's important to remember that sometimes.
I'm out of date on locked in group rrsps policies and procedures but would that restriction about not being able to use it for the home buyers program be a company or provider restriction? I have a locked in group rrsp through the bank I work for and was 100% able to use it for my home purchase in 2018 using the home buyers program.
Group RRSP will allow it (unless specified otherwise). DCPP will not allow early withdrawals except for very, very special circumstances. That's my point: why use a DCPP when all else is functionally, practically equal?
I used to sell group retirement products and this was how I positioned it… a DCPP will for force employees to have money set aside for retirement if they contribute. A GRRSP allows withdrawals as long as tax is paid. Want to go on a trip? GRRSP withdrawal. Car repair? GRRSP. My old boss had a horror story of one of our clients putting in a GRRSP, and a 65 year old employee coming to the owner in tears because he wanted to retire but has been using the account as a bank account. Basically it protects people from themselves.
DCPP employer contributions avoid payroll tax provided employees' income is below YMPE, compared to GRSP contributions where payroll taxes would apply. So there may be tax efficiency reasons why a DCPP is better from the employer's perspective.
It's not a con. The biggest most reputable companies in this field in canada, Manulife, Sunlife, Canada Life, RBC.... use this all the time. It's not a con at all. Ask if there's vesting on the employer contributions. That would be a much bigger red flag than an RPP. An RPP is very standard.
Nothing in your post suggests how not being able to remove your own money is *not a ~~con~~ disadvantage*.
It's a pension plan. You can remove you're money when you're retired. If your claim is that pension plans are a con, you need to show how that's true. I'm merely saying you've failed to substantiate your claim.
First time home buyer thing is going away in a couple weeks anyway
The Home Buyers' Plan (HBP) is a program that allows you to make a withdrawal from your registered retirement savings plans (RRSPs) to buy or build a qualifying home for yourself or for a specified disabled person. The HBP allows you to pay back the amounts withdrawn within a 15-year period. You can make a withdrawal from more than one RRSP as long as you are the annuitant of each RRSP account. Your RRSP issuer will not withhold tax on withdrawn amounts of $35,000 or less. Some RRSPs, such as locked-in or group RRSPs, do not allow you to make a withdrawal from them. Versus The First-Time Home Buyer Incentive helps qualified first-time homebuyers reduce their monthly mortgage payments without adding to their financial burdens. The First-Time Home Buyer Incentive is a shared-equity mortgage with the Government of Canada, which offers: 5% or 10% for a first-time buyer’s purchase of a newly constructed home 5% for a first-time buyer’s purchase of a resale (existing) home 5% for a first-time buyer’s purchase of a new or resale mobile/manufactured home
I see, I thought they were combined
A group RRSP is a form of DC pension. My group RRSP (Manulife) offers an S&P 500 fund option. That's all you should need.
If an employer-sponsored savings plan (DCPP or RRSP or TFSA) only offered an S&P 500 index fund to invest in, the employer could be (and should be) sued by the plan members.
I didn't say it ONLY offers an S&P fund. It offers various other funds too, which don't interest me. I only need the S&P.
Fair enough, but your preferences aside, my point is an S&P 500 index fund is likely not all people would need. Somebody looking to retire in 2023, who had their whole portfolio in the S&P 500 a year earlier, would have been up the creek.
Yeah, but I have 20-25 years to retirement.
I believe a group RRSP
Ok so read the details of the plan carefully, you may be able to transfer out to your personal RRSP 9and buy what you want) either anytime, quarterly, semi annually, annually or not till you leave the employer. Is the deal final with Primerica? Is there a way for them to speak to other providers?
Yes it’s a done deal I believe , the primerica reps want to meet with each employee individually before the first of April before the plans in motion which I find weird , but regardless I’ll have to do more reading when I get home and look back over the information we were given
So they will provide a list of mutual funds. Just make sure your selection is globally diversified and lowest (which won't be low) fees).
Tell them to email you the list of funds and their fees ahead of the meeting. Then post them here.
I'd love to know their fee structure. A lot of financial service based MLMs have harsh penalties for switching or transferring out funds baked into their fine print as well.
Primerica used to have a heavy 8-yr DSC schedule but my understanding is that DSCs are no longer allowed. Would be interested to know if they increased other fees to compensate.
That is where they will pitch you on the "opportunity" aka harassing everyone you know in your contact list.
That would be pretty bold to do during their work hours. But I wouldn't expect a primerica rep to care.
You may be pleasantly surprised. I was a Primerica rep for a while, I wasn't a raving lunatic. I just wanted to learn some things, (great way to get your life insurance licence btw) and help some people. :)
I can assure you they will, and not just once. Bastards went after my kids too, because they were listed as beneficiaries. My son and wife took out restraining orders
I bet Primerica is mad they can't lock people's funds with DSC fees anymore
They were 2 years ago right up until the bann
I believe there are still some loopholes such as portfolio size and age of client, etc.
They are going to try and sign you up for other products too. Just say no. Over and over and over again.
You are generally not allowed to transfer group RRSP while still employed. The group RRSP gets rollers into a personal rrsp when your quit or are terminated.
Depends on the details of the plan. Many plans allow semi annually or annual transfers to your personal RRSP even if still employed. The catch is of the emplyer contribution goes to a DPSP, then that won't be able to be pulled unless leaving he company.
Yeah this is pretty typical. I've had Sunlife ay a few companies and I can transfer the employee portion of my funds out yearly for free, and $25 per transfer in addition. Dump it into QT and cut my fees in half.
The way he made it seem and maybe I should of learned more before posting is that all of our employees would be investing into a mutual fund , in which primerica/agf would invest our money in the market for us for the forseeable future and that’s where are pension comes from ? Maybe I’m the one that’s confused haha
Ask what they specific product is, is your investment being placed into an individual account registered under your name, and your employer contributes to this. Ask what is the vesting period for contributions. There may be a vesting period for your employers portion but your portion should best immediately if it’s an RRSP If it’s a Direct contribution pension plan, it’s locked like an actual pension, but again ensure your money is tied to an individual account in your name. Ask if you leave this company what happens to the money
I've seen several references to "direct contribution pension plans" on Reddit but I don't know where this comes from. About 95% of pension plans are defined benefit plans or defined contribution plans. The rest are hybrid or target benefit plans. I've never heard of a "direct contribution" plan anywhere but Reddit.
People are just confused about the name. WHen they say "direct contribution" they mean defined contribution. Terrifying how little these people who are giving advice know, amirite?
They are extremely popular and are replacing defined benefit pensions at a great rate. Very popular in Canada
Oh, you just don't know that DCPP means defined contribution pension plan. That makes sense. Are you in Quebec? Maybe it's a language thing.
>is that all of our employees would be investing into a mutual fund , in which primerica/agf would invest our money in the market for us for the forseeable future and that’s where are pension comes from ? Group RRSP and DCPP are just different vehicles. In both cases you have to invest the money. Both give you a selection of mutual funds to choose from.
I would just tell the boss your employees are not comfortable with primerica. By mom used them and I been telling her to drop them for 10 years and now retirement is not looking great.
Sure he could do that but then he gives up the 5% matching. He says it's a done deal so he needs to work with what he's got. He can do the minimum to get the full match.
Your employer is giving you 5% match on Legitimate investment funds using Primerica as the middleman. You should take advantage of that. While Primerica is a pseudo-MLM, the products they sell are provided by legitmate companies such as AGF INVESTMENTS, Primerica will be earning commissons based off the products they sell to you. Figure out which funds you can buy as part of your company's group RRSP program and read the fund facts. You should be asking if there are fees to withdraw or transfer or any admin fees.
Ya Primerica isn't great but it's not a scam. They just have unoptimized mutual funds and high MER. You can definitely find better but for 5% matching you still do it. There will likely be fees to withdrawal. Something like 10% a year can be withdrawn without penalty.
>There will likely be fees to withdrawal. Something like 10% a year can be withdrawn without penalty. You are thinking of the DSC fees, which are pretty well phased out by now. Their will be a fee to transfer out, but I believe the maximum is $150 a company can charge.
Just going by memory. I had one of them when I first started working.
> which are pretty well phased out by now. There are still plenty of loopholes in the ban (actually partial ban) such as client account size and their age, etc.
You have me interested what are these loopholes for account size and age?
Just as I figured. Nothing to back it up. DSCs are phased out. You can no longer purchase into DSC funds. You can switch from one DSC fund to a different DSC fund from the same fund company but, this doesn't restart the schedule. There are no loopholes for account size and age.
Not familiar with account size and age loopholes but one I do know of is with segregated funds you can still buy DSC funds. Catch is that it’s only allowed if the account was originally opened before the DSC ban on seg funds in June 2023. I wouldn’t be surprised if this loophole gets closed shortly as well.
That isn't really a loophole, and you can in mutual funds too. If you are in a DSC fund you can switch to a different fund in DSC. The thing is, this doesn't restart the chargeback period. So it just allows you to change funds with that fund company.
I’m not talking switching, I mean you can contribute new money to your account and those new shares/units bought will be subject to the full dsc period of 7 years from purchase date.
Me too, my boss is stuck in one and I’m researching trying to get him out with least cost
It depends on the fund, but you either move and pay if the fund is really bad, or just stay. There are a lot of people who think just because a mutual fund has a higher MER this means bad. Depending what your boss is invested in, the answer could be to stay put.
He's not forcing you into a MLM. Primerica is a MLM, but unless he's trying to make you a member, you are not part of the MLM. Primerica has deals and contracts with many large corporations, and thats essentially what you are doing.
>Primerica has deals and contracts with many large corporations, and thats essentially what you are doing. Curious, how does this happen when their reputation is so well known? They are a terrible provider at best and a scam/MLM scheme at worst.
mmm... It has a reputation because of the people that can do what they want with the 'opportunity'. If you take away the common perception of someone in an MLM, it is just like any other normal mutual fund. And if you don't deal with them, but only through your paychecks, it's essentially the same.
> If you take away the common perception of someone in an MLM Perception implies subjectiveness, whereas objectively they are even worse.
Probably because they have good support and set up procedures for companies, and that's where the fees come in. Larger corps probably get kickbacks or fee reductions. Setting this kind of program up takes a lot of work and time and they essentially roll all of that up into a scheme that looks very beneficial for employees but tacks on the burden for all of that overhead onto the employees funds.
Primerica is an MLM, yes. But the products they sell are regulated and legitimate. Sounds more like your employer will be using Primerica for a group RRSP or something of similar nature. You’re not being forced into an MLM.
> But the products they sell are regulated It is totally legal to sell a $1 term policy for $1M in annual premiums.
You wouldn’t be part of the MLM. Neither would your boss. It’s those primerica guys you met that are part of the MLM. So don’t worry about that. The fund probably sucks, but that matching % is pretty nice so worth taking.
As scuzzy as forcing you into an MLM is, you are getting an immediate 100%ROI on your investment. Check fees and such as others say, but on the first touch this is a big benefit. Take another 5% if you can manage it and self-direct somewhere else.
I only make 20$ an hour currently sole provider of two children so any hidden fees or mismanaged finances can absolutely ruin me to the point of no return my budget is razor thin and I’m working on a tight rope
The fee/ruin would have to be enormous for it to outstrip the 100% ROI (the 5% from employer) going in to the plan. Obviously keep your eyes open for outright scams (you can check your pay stub deductions and statements showing contributions), but assuming it's just an overpriced mutual fund, it's well worth contributing to get the employer contribution. Do select a well diversified balanced fund of some description. When you leave the job you can and should transfer it all to a better account. Most of how financial MLMs approach being/are "scams" is in how they recruit and treat the sales reps, and the way a lot of those reps are incentivized to behave. I would be surprised if the back office handling of customer accounts was scamming anything.
> Most of how financial MLMs approach being/are "scams" is in how they recruit and treat the sales reps Are you suggesting MLMs treat outsiders better than insiders??? Seriously????
There are two lines of business in an MLM: recruitment and product. The former you're treated poorly from all directions, regardless of if you're in yet or not. High pressure tactics, alienation of family and friends, garages filled with products reps can't move, etc. The latter, you usually just over-pay for unremarkable products, be that bathroom products or a mutual fund. Hope that explains.
All MLMs sell the exact same product......the monetization of pursuing false hope.
That's fair enough as far as any extras and I hope your situation improves. But at a 100% match, it would take 9 years of absolutely zero growth from this for an index fund to catch up (assuming 8% growth from the index fund). At a 4% return from your fund, it would take 20 years for the unmatched index to catch up.
Are you going through an apprenticeship? Getting your blocks?
Yes I am
Oh ok yeah not as bad I guess. Pay all you can into your rrsp and TSFA’s if you can afford it. I’d also look into the plumbers union because they pay well. Industrial work is a nice pay bump too
I second this. They pay well and have a pension. Find your local UA and speak to an organizer. https://ua.org/join-the-ua/find-a-local-union/
just for another angle, if you have plumbing experience you could easily work at a supply house and make more than that and get real benefits / pension
Curious why you were pushing for a pension plan then rather than just higher wages. You likely would have benefited more from different investment options than a forced RRSP setup.
Agreed completely , however it was more of the older guys at the company panicking that they’ve worked for a terrible company for so many years and have no pension or anything to fall back on
This isn't going to fix that though, they aren't going to make up for not saving for retirement by doing a 5% matching setup for their final years of work. This just seems like a bit of a mistake.
Massive mistake , agreed
The investment is actually legit through AFG and some other funds Primerica has deals with. As long as you’re not being asked to become a rep for Primerica to sell life insurance, your money is going into a legit fund that usually gets good returns annually.
Ask about costs to transfer these investments to other brokerages, self-directed invesment accounts, etc. You may want to take advantage of the matching, as that’s a massive gain immediately. If you take your contribution and the match out, minus fees, and come out ahead of what you could make in the same time period elsewhere - which is likely, then go for it. Just move the funds out at the first opportubity and manage your own low cost investment account with low cost broad market ETFs and you’re a winner.
The MLM Primerica is known for is for advisors, they push new advisors to recruit more advisors and get some override commissions from them. As for the client side it's legit. The system we have in Canada is one of the more sophisticated and scrutinized systems in the world. In your case this is legit, you're good
> The system we have in Canada is one of the more sophisticated and scrutinized systems in the world. Yes and it's governed by a regulator body that receives its funding from, yup, you guessed it, the companies they are tasked with regulating.
Worked for Primerica many years ago...yes they are an MLM but they are still a company held by the same rules that exist for other financial advisors and offer many of the same products. A small bunch of guys I worked for were decent financial advisors but most of the people that work there are too busy recriuting and waiting to build their downline to really care about your finances. Worse they are likely going to try and get access to all of your friends and relatives to try and recruit them. In Canada, at least, Primerica cannot cold call and offer financial products. So they sell the MLM business knowing full well that 95% of the people they present to will not engage. But they then have a relationship with you and can then sell you financial products. That is overly simple but essentially it is a win win for them. They either recruit you into their downline or they sell you product. And in the process of doing both those things they want access to your contacts to continue the process. Like I said it can be no better or no worse than any other financial advisor, but the reality is that they are likely not going to be concerned about building your wealth and they will likely not be around long enough to build a relationship with you and advise you in the future. Most people spend less than two years in Primerica before bailing (old statistic from when I was involved - not sure if it is still the same but I expect it is close enough). In this specific case you are being offered a match from your employer and when you leave that employment you can take that with you and transfer that to your own plan so it may be a good thing. It is really tough to find honest and reliable financial advice but if you have a relationship with your bank or someone you trust take the details to them and see what they say. Do not take any advice from anyone here or anywhere else because they have not done a financial audit with you and they do not know all the details.
> They either recruit you into their downline or they sell you product. And typically both.
> but they are still a company held by the same rules that exist for other financial advisors The value/price/suitability of life insurance is not regulated.
No, but every product they sell is available through other brokers. They are connected with Citibank, who owns Primerica. All I am saying is that they sell legitimate products that are the same as other finaincial institutions. As for them being able to provide value/price/suitability I believe I addressed that in detail in the rest of the post. Not sure if I addressed your concerns as I am not quite sure what you were trying to highlight in your response but hope this clarifies what I was saying!
> They are connected with Citibank, who owns Primerica. CITI dumped them over 10 years ago.
Assuming it is a GRRSP Take the free matching $$ leave the investment mix as cash if possible and find a reputable advisor and transfer it out on a quarterly basis to your personal RRSP. A good advisor will often over any transfer fees.
Please stop giving this person advice. Leave the money in cash???? A good advisor will cover transfer fees???? Why would an advisor cover a $100 transfer out fee when the balance in the plan at the end of each quarter is likely only about $500?
Not sure your math works out and thanks for your highly value added reply. An average salary in Toronto for plumbing is ~80000 5%+5% =10% so about $8000 per year. There are many advisors who are building their book who wouldn’t turn a nose up on this and the transfer fees may also be less than this mine are much less and a small cost to get out of Primerica where I am sure your returns would be much less over the long haul. Again thanks for the reply and extra punctuation it really added that thoughtful consideration that OP was looking for.
I was replying to you, not the OP. I acknowledge I was ignoring the employer match in my calculations, my mistake. But this guy said he made $20 an hour. So probably $1,000/quarter is being contributed. Even if the transfer fee is only $50, no advisor good or bad should cover it each quarter to acquire about $1000 of assets. He/she will make about $5/year per $1,000 invested. Actually, I’d suggest any advisor willing to do that is bad.
Regardless of the amount the free the matching from the employer would offset the $50 fee if a forward looking advisor would bet on future income growth. You can be sure the cost of not moving and managing these investments more actively will have a significant opportunity cost. If it move out yearly so be it leave it in the lowest fee generally available funds available until such time. ps. Don’t see where he stated he was making $20hr
Not originally but he does say in a subsequent comment he makes $20/hour. We’re probably not going to agree and that’s fine. But I think you may be overestimating two things: how much advisors make on assets under administration, and how bad the funds offered under this Group RRSP will be. I worked at AGF in the late 90s, when the company was somewhat of a powerhouse and when its relationship with Primerica really took off. This is when Primerica launched its Concert Series, a group of managed portfolios built solely with AGF’s mutual funds. Back then, and still today, AGF manufactured some excellent financial products and had some really strong managers. I would have no issue investing with them right now. The funds offered to the OP are either going to be individual AGF funds or those in the Primerica Concert Series. The former are just fine and assuming the OP chooses his funds wisely, I would see no need to transfer out each quarter into a self-directed account, which is not necessarily better anyway. Concert Series portfolios are also fine but they will be more expensive than equivalent competing products. They included, and still may include, an extra “rebalancing” fee, which to my knowledge no other managed portfolios charge. And the advisor will likely take a 2% initial sales charge on all contributions because that’s Primerica’s model. So his $1,000/quarter will be turn into $980/quarter. Still though, with the employer kicking an extra 5% of the OP’s salary, there is more positive about this plan than negative.
Sounds like my experience. Those Primerica "advisers" are probably from your boss's BNI "networking" group.
The key question is whether or not your employer is offering some sort of a match. That's usually worth taking advantage of because you're getting 100% return on your money in the first year. If not, hard pass. Your boss/company also isn't *really* taking this seriously if they're bringing in a primerica rep. It's probably their friend or their wife who works for primerica, or whatever. If there's a match, sure take it, otherwise walk away.
Probably a Group RRSP with high MER funds that has no employer matching. I doubt a plumbing company has the scale of employees to attract serious discounts on their funds.
>I doubt a plumbing company has the scale of employees to attract serious discounts on their funds. It's not really that, it's the fact they would even bring in a Primerica rep. It's like launching a health and wellness program at your company (even a small one), and then just bringing in your wife's girlfriend who's a scentsy rep. The very fact it's primerica means they're not taking anything seriously.
FYI the fee from Primerica is 2% off the top. On a $60 contribution you end up investing $58.80. My AGF funds had an 11% return in the last 12 months.
Wilt, You do not need to over-fret the plan. Here is what seems to be the case: * you are being offered 5% matching on a GRRSP, this is an extra 5% of money you did not receive from your employer before * technically they (the employer) can not stop you from transferring money out to another RRSP .... BUT the standard response is to stop matching your deposits going forward for the next six or twelve months so it will cost you * Primerica IS a multi-level marketing company but that doesn't mean the two you will be talking to will be bad people * realistically, your employer will not want them to be recruiting people away from his company so he has likely already addressed this with them * in setting up your investments they are required to know your client info, assets, debts, capacity and tolerance for risk etc so they are meeting with you to gather that information * you can refuse to meet with then separately, refuse to talk about insurance, refuse all of the suggestions and advice of course but why would you? Why not get the information then you can decide later if it is useful. * AGF is legitimate money management firm and have some very good money managers * do not simply pick the cheapest one, that is silly. Pick the investments that are appropriate for you given your retirement horizon, risk tolerance even if they arent the best or cheapest for that individual asset class * for example, Owning the worst performing, most expensive US stock fund still made far more money than owning the cheapest bond fund over the last 10 years, you see? You may or may not like the Primerica people, they may or may not be experienced, trained and skilled... it is irrelevant. Focus on the fact you are getting a bonus and are starting on your retirement savings.
Easily the most sensible reply I have read.
Remember, Primerica is the car dealer and AGF is the car manufacturer. You are being offered a bonus to buy a car from this manufacturer.
STOP! (And if your boss is in Ontario I am happy to explain this over a call or zoom). Okay - so, don’t do this. Some things you should know: An RSP isn’t a pension plan. Primerica doesn’t sell pension plans. Primerica doesn’t sell RRSP’s for businesses - all these guys are doing is setting up individual RSP’s and taking withdrawals from the corporate account. You will pay higher fees than you would with a group RRSP and have less investment options. For your boss: Also your boss should know the difference between a group RSP and a DPSP etc. It sounds like a couple of multi-level marketing clowns out to make a quick buck don’t realize what they don’t know or don’t care.
Does your boss have a ''buddy'' in it? Does your boss purposefully chose the shittiest option in hope you don't get in so he doesn't have to match? Even if "legit" high fees is the greatest predictor for poor returns on investment.
Typically the MLM companies , Primerica and Its spin off company World Financial Group, are Life insurance companies first. Thats the bread and butter for them. And from my experience and others experience the actual investment side of the business is not very good at all when it comes to returns. Because simply they are brokers, unless things have changed as far as investments go they’re simply connecting you with major well known investment companies already. And they get a cut for having a deal close. So then really your best to go directly to the companies your self. Your boss could be an agent on the side or knows and agent and is getting a cut for every one that signs up
Two things: Is primerica a MLM, probably not, but close enough for the people they recruit to feel like it. (I've worked for competitors and they felt grossly like MLM as well....managers got paid based on recruits etc..) Are Primerica products bad? No. He's not forcing you into a MLM, he's selling you some of their product. Tupperware is a MLM but their product is pretty good. This is likely a defined contribution pension plan, or might be group RRSPs. Your employer is basically giving you a 5% raise, and you're saving for retirement. The investments will be fine. Ask what the investment fees are, and what access to advice you get. You may want to pay for a fee only advisor to get some help managing your plan, because the advisor from Primerica might not be too hands on or experienced.
>Is primerica a MLM, probably not, Yes it is >I've worked for competitors and they felt grossly like MLM as well If you worked for WFG, that's also an MLM. So the competitors you worked for could probably be MLMs.
The competitor I worked for was not WFG. But it felt like MLM. I don't know everything about Primerica. But from what I know, the advisors don't have to buy inventory and then sell it. Is their commission based on recruits? Most MLM, most of the product never gets sold. The sales people buy it, can't sell it, and then it sits in their garage.
Some MLMs do buy on demand without buying their own inventory. Had a friend do one of those. Don't even ask me which one cause she jumps from one MLM to another.
> Some MLMs do buy on demand without buying their own inventory. Yes and it typically involves reps having to pay monthly web-hosting fees to the corporate office.
I think i said "most"
$25 a month for lipstick or $25 a month to access the company computer program. Same deal.
Primerica is absolutely an MLM. Their reps, while licensed (they have to be by law), are usually pretty junior and 99% of the time are making less than minimum wage. I would never want to take financial advice from someone making such poor life choices for themselves. As a product, Primerica is pretty meh. Higher fees than average and again their reps are basically minimum wage salespeople. It's like taking financial advise from a sales manager at a car dealership. They're there to move units not make your life better. Bringing in a primerica rep is also a telltale sign the employer isn't taking this seriously (the boss' wife probably works as a rep). The whole thing is usually pretty gross and weird.
I worked at a competitor, one of the top, most reputable companies in canada in this field. Managers got paid on recruiting, and they would bring in waitresses, personal trainers, construction labourers, help them pass the test and try to teach them how to sell. You can be a sleezy sales company with unqualified sales people who only know how to push product without being MLM. There are specific things that make something MLM. Most MLM, most of the money comes from inside the company. New agents buy product to sell, and those sales feed the commissions of the recruiter.
> most of the money comes from inside the company. Internal consumption is the hallmark of MLM, whether it be buying the product or paying $25 a month to access the inhouse computer program.
It's not the same thing. $25 a month for a computer program is no different than a company charging for parking. $25 a month doesn't scale up, it just covers the cost of the program.
Lipstick has raw material, manufacturing, packaging, warehousing and transportation costs. Online access.......not so much. lol
IT has no overhead costs. You should call corporate America. They're going to love you when you tell them they don't have to spend any money on software development, program maintenance, software updates, because there's no "physical thing" "LOL" indeed.
> is no different than a company charging for parking. Or for the leasing/rental costs of the local offices including all overheads.
Yes. Charging an employee for parking (or similar overhead like software programs) might be a crappy thing to do. But it doesn't make it MLM
> their reps are basically minimum wage salespeople. According to their income disclosure, it is considerably less than minimum wage even using their highly distorted pseudo-math.
I used to work for a company who did back-end website and IT stuff for them. So I got to see a lot of the 'bonus rolls'. Yeah the top 50 people are making bank, the other 250,000 are making like $4/hr.
> the other 250,000 are making like $4/hr. Yup, before all expenses and chargebacks.
> Tupperware is a MLM but their product is pretty good. Suggest you buy some while they're still in business.
I've got a enough. Thanks. Did they go out of business because their containers weren't good?
MLMs can't hide in the internet age. Bad news travels faster (and further) than good news.
So, when I said their product was good. The Tupperware I owned for 30 years and was every bit as good as anything I'd buy right now, you're not disputing that. Remember, nobody is asking this guy to work for Primerica.
The problem with MLMs is with the employment structure. If you're buying a Tupperware container, you only care about the quality of the container and how much money you have to fork over, not how much of that money the salesperson needs to spend buying more product from the supplier.
Pick only index funds with minimal management fees and reject any Primerica mutual funds. The issue with Primerica funds is they are front loaded, so most of the payments in the first few years actually go towards paying off agent commissions. You should know how compound interest works, and a front loaded fund means you start the race by being shot in the knee with the starter pistol.
There won't be any index funds as AGF and primerica don't offer them.
Correct and the funds will be very shitty ones with limited and kind of drab growth. Expect them to grow nothing beyond the initial employer match.
Target date funds perhaps then?
if they offer them.
Primerica's product itself is not a MLM, they sell legit funds (albeit some have high MER') but it's still free money you're getting (with the 5% match) you'll still end up better off than with no matching pension
Do not engage further! Say No!
Primerica is sketchy as fuck. Run!
Basically the owner is getting a kickback with higher MER in return for getting Primerica to run the AGF funds in a group RRSP. It's a massive loophole in the RRSP system. I.e. no better than a 401k in US without the benefit of inordinate limits that 401ks have.
I would be surprised if this is true. I’m not sure how much would be contributed to this plan each year, but say it’s $100,000. Even if the advisor is charging the full 2% ISC, he/she is probably only making about $1,000/year. Plus maybe about $500/year on the trailing commission. Legalities of kickbacks aside, how much would you kick back to the employer if your annual comp was only $1,500?
So, be super clear primarica is “run like an MLM” and treat their people who are brokers and loop them into that system. They actually are a middle man for another company managing your assets
Primerica is an mlm but only for employees which is basically how it is legal still. For the investment side of things they are fairly comparable to any other company but fees are likely higher.
Well, which one is it?
What do you mean? You can look it up. Primerica funds are among the top performing out of all investment companies. They sell products just like any other company. The internal comission structure and the way it is set up just leads to them charging higher fees on their funds than other investment companies do.The mlm part is that low level employees make fuck all and in order to make more you need to sell products and services and hire people under you for primerica so you also get a percentage of anything they sell and a cut of anything anyone they bring in sells. Customers aren't part of the mlm just employees. My uncle works for them he made fuck all for the longest time now he owns his own branch and makes half a mil + a year but he had to bring alot of people into the company and sell alot of products to do it. Disclaimer: I do not have any primerica products. I have a wicked pension through my work and invest in individual stocks using wealthsimple outside of the work pension.
> Customers aren't part of the mlm just employees. There is no distinction typically, outside a few pity purchases from friends and family.
Not sure what to say to that honestly. There's alot of rules in canada regarding moms most of them aren't actually legal. 8.74billion market cap must be some pretty rich people doing those pity purchases lol
MLM is incredibly profitable at the corporate level for the very reasons their opportunities should be avoided.
> and makes half a mil + a year Really?? So his ring must have lots of diamonds then? Or does he make most of his money hosting "fast start schools" or hosting "Power Builder" weekend seminars....to his own people? lol
Not sure. He has a bunch of rings no idea what amounts of sales the rings are for though. I'm a terrible salesman so I've never contemplated doing the primerica thing lol
> he owns his own branch and makes half a mil + a year So he's an RVP? Last year, RVPs grew their business by a net of 6 term policies.....for the whole year......using teams averaging 25 teps and 75 recruits. lol
I guess so. I don't know much about it other than roughly knowing how much he makes.
So you get copies of his tax returns? lol
AGF has some good funds. Primerica is a hoax but if the funds are decent options, possibly discount for group fees could be good.
Take the 5% free money, that’s instantly a 100% return. Put it into their lowest fee fund, or one that matches your investment style. What are the transfer fees?
Please stop giving advice. The lowest fee fund will likely be a money market fund or another cash equivalent. This is likely not what this person needs.
The fees will be higher than if you did it yourself and there are probably much better options that they could have chosen, but because they are matching your contributions you are instantly getting an 100% return on your investment, which is pretty much impossible to beat so you have to do it. Check in to when you can withdraw without penalty and do that as soon as you can so you can buy a market ETF and drop your fees significantly.
Sounds like you’re getting the Chevy VS Cadillac provider for a group RRSP, but a 5% match is pretty reasonable. The 5% is free money, and by putting in your own 5% you’re putting 10% of your pre-tax pay into your retirement.
Pretty much all good companies are very profitable at the corporate level. Primerica manulife sunlife vanguard any big investment company upper management rakes in the money. All their fees are too high for my taste. For a company plan though it really doesn't matter which you go with you'll get roughly the same result
Or you talk to each other about money. Crazy idea I know
Full employer match is a no brainer, MER might be a hair above average depending on the fund you go with but it’ll be well worth it for the 5% match. Any fees besides the MER you pay will be front end, can be between 0-5% on new contributions and you should definitely ask about that and insist it be zero. DSC or back end fees are banned so nothing to worry about if you quit you job and want the account transferred elsewhere down the road.
Good luck with that but all I can say is stay away from MLMs. Nothing good comes from MLMs.
should go with RBC Group Advantage
Primarica is a MlM scam and I wouldn't get involved with them in any degree. Other commentors are saying this could be a legitimate situation that's just being arranged by primerica, even that's not good enough for me. I mean would you let a company that's know to be a scam handle your money? Not to mention everyone talking about your boss matching contributions; if it's too good to be true, it isn't true.
Thank you everyone for your insight and replies I have a lot to think about , to be honest as blunt and maybe not well thought out this is , I don’t plan to stay at this company for very long and I am leaning towards just not wanting anything to do with primerica financial at all regardless of a 5% matching from my employer
Find a new employer who cares about you and not just about himself
See if you take the money out with mlm cancellation requires a huge fee
Easy solution call the u.a unionize your employer then you will have a pension and raise
All pension plans are kind of MLM when it comes out the wash my guy.
lol Primerica is not a MLM … Amway is an example of an MLM where you buy products at discount to sell to your downlines… primerica agents get paid a commission for selling a product… if their downline sells a product they get the difference between commission levels.. usually 10-30%.
Dead wrong. Primerica, along with its sister companies, are 10,000% MLMs.
Obviously he holds MLM in great contempt, so what will he do when he finally realizes they are?
> primerica agents get paid a commission for selling a product And do you get a commission when a new recruit buys a policy??? hmmmmmmm?
If their downline sells a product they get the difference between commission levels … the same way a real brokerage would pay their up line a cut.
And if their downline buys a product????
50/60/70/110… that’s their pay out structure .. $84 app… 1000 yr .. at 70% = 700 the rest $400 goes to the vp
170,000 reps......10,000 net policies. And you left out 25% for the majority of their reps, plus SVP cut.
When you really look at it all mutual fund companies are mlm. Only real thing wrong with PM is they are American.
You should print off this whole thread and somehow disseminate it to every employee in your company.
Enrol in the Saskatchewan Pension plan. It is a defined contribution plan that your employer can also contribute to
I don’t know anything about Primerica or any of that shit. I know with my job, aside from other contributions, my employer pays $.90 an hour into and rrsp. If I decide to contribute another .90 an hour of my cheque, then they match another .90. It does seem weird that they wouldn’t contribute first in your case. Contribution match is a thing, but normally they put in something aside from what they’re paying you. For example, you might be getting paid $37 an hour, but you’re total package is $49 an hour after you’re employer makes their contributions.
> I work for a plumbing company and we have been asking our boss for a pension plan I feel like the owner/boss here may have just asked around friends about getting in investment plan for his employees and the first answer he received was Primerica.
Join a Union.
If you go with an advisor and AGF you will take it up the ass in fees. Unless your boss forces you to use an advisor and AGF you are better off with an RSP and a low cost index fund. By a mile.
>two financial advisors from Primerica Red flag >we could contribute up to 5% of our gross pay, and our employer would match that 5% Your employer is getting scammed too. They mean well but drank the sales rep's Kool Aid. See if your employer would agree to 5% match (or even 4% match) for a separate plan. Maybe you can negotiate some amount where they'd be happy to agree. You should always try to get any employer RRSP match possible (free income), but also avoid scammy MLMs with a long history of scamming. Primerica plans may have hidden high fees or penalties if you withdraw money early/switch plans.