Strong fund returns come at a cost

Looking at PEPP’s annualized returns – which is the average return over a specific number of years – you’ll see the funds performed better than the benchmarks. As a PEPP member, these returns mean your PEPP account is growing over time.

In the last two decades, PEPP’s strong fund performance is due, in part, to its diversified investment structure. This includes the addition of alternative investments.

Alternatives include real estate, private equity, and infrastructure.

The goal of any investor is to balance lower risk or volatility against the desire for higher returns. If you follow the markets, you know how tricky this can be.

The investment time horizon for alternatives is often 10 years or more – making them ideal for pension plans. And the range of investments allows investors to access superior returns with less risk.

Alternatives need greater expertise to manage. With that, comes higher management fees.

This means you can expect investment fees to increase gradually in the next few years. The boost in returns should outweigh the rise in fees.

PEPP has always been upfront about its fees. The Plan does not generate a profit. Rather, fees reflect the actual costs for running the Plan and investing the Plan’s assets.

To review PEPP’s Fund Fact Sheets or the monthly Performance Bulletins, go to the About the Fund section on the PEPP website.