[Updated: March 12, 2020]
The UBC Faculty Pension Plan (FPP) has expanded its investment options to include a UBC FPP Fossil Fuel Free Equity and Bond Fund. This fund will be available to members on April 1, 2020. The following is important information about the fund as well as instructions on how members can make allocations on April 1, 2020.
Key features of the UBC FPP Fossil Fuel Free Equity and Bond Fund
Fees
Differences between the UBC FPP Fossil Fuel Free Equity and Bond Fund and the UBC FPP Balanced Fund
How to make an investment allocation to the fund on or after April 1, 2020
Key features of the UBC FPP Fossil Fuel Free Equity and Bond Fund
The UBC FPP Fossil Fuel Free Equity and Bond Fund will be a fund composed of three fossil fuel free funds (Canadian Bonds, Canadian Equity and Global Equity). The target asset mix is 45% Canadian Bonds, 15% Canadian Equity and 40% Global Equity. The fund excludes investments in fossil fuel companies and its carbon footprint is actively managed to deliver a materially reduced emission intensity in comparison to the benchmark. The UBC FPP Fossil Fuel Free Equity and Bond Fund will be managed by Jarislowsky Fraser, the same manager managing the fossil fuel free mandate for the UBC Endowment Sustainable Future Pool.
Members are encouraged to review the detailed fund sheet which has a full description of the fund portfolio, benchmark and record of performance.
Fees
Jarislowsky Fraser’s investment management fees will be calculated based on total UBC assets, including those in the UBC Endowment Sustainable Future Pool. The fee schedule is such that increases in the overall asset base result in a decrease in the overall fee rate, which is expected as assets grow via member contributions and market growth. Initially, the Fund Management Fee (FMF) for the UBC FPP Fossil Fuel Free Equity and Bond fund is 0.55%, which includes investment and administration fees.
Differences between the UBC FPP Fossil Fuel Free Equity and Bond Fund and the UBC FPP Balanced Fund
The UBC FPP Fossil Fuel Free Equity and Bond Fund will have a much lower allocation to the energy sector than the benchmark and the UBC FPP Balanced fund. Therefore, if there is a major event that affects this sector, members will need to be aware of the potential impact on their returns. There could be a meaningful difference in returns between the UBC FPP Fossil Free Fuel Equity and Bond Fund, the UBC FPP Balanced fund, and the benchmark. The following table shows the key differences between the two funds:
| UBC FPP Fossil Fuel Free Equity and Bond Fund | UBC FPP Balanced Fund |
| Utilizes a screening process to significantly lower the carbon footprint versus the benchmark | Does not screen out any sectors |
| Does not have a real estate allocation | Has a real estate allocation |
| Has only one active manager (an active strategy) | Has multiple managers (combination of active and passive strategies) |
| One strategy per asset class | Multiple strategies for each asset class |
| FMF of 0.55% | FMF of 0.44% as at February 29, 2020* |
*Due to an addition of a new Real Estate manager, fees are expected to increase mid-year by approximately 0.04%.
How to make an investment allocation to the fund on or after April 1, 2020
The UBC FPP Fossil Fuel Free Equity and Bond Fund will be available on April 1, 2020 at 5 a.m. PT. Members can make investment allocations and allocate ongoing contributions through their online account at mysunlife.ca/ubcfpp. Please note that any allocations made on April 1, 2020 to the UBC FPP Fossil Fuel Free Equity and Bond Fund will be shown in member transaction history details at mysunlife.ca/ubcfpp on April 2.
As with any investment choice, members are responsible for their investment decisions and they should understand what their risk tolerance is. Members should review their investments periodically to ensure their portfolio is aligned with their tolerance to risk, as both can change over time. The Investment section contains detailed information about the UBC FPP investment options as well as member resources and tools.
Recommended Reading
The following is past communication regarding the new UBC FPP Fossil Fuel Free Equity and Bond Fund as well as links to the March 2019 member survey results and the two education articles that were published in the February 2019 Faculty Pension Plan Update newsletter.
New Fossil Fuel Free Balanced Fund Option Update
Member Survey Results: Potential Fossil Fuel Free Balanced Fund Option
Environmental, Social, and Governance Investing and the UBC Faculty Pension Plan
Potential Fossil Fuel Free Balanced Fund option and member survey