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GLOSSARY OF PENSION TERMS Administration and Investment Management Fees: Charged for the administration and investment management of your Insurance Financial Institution Retirement Savings Plan. Administration fees are charged to your plan by Financial Institutions investment management fees are charged to Insurance Financial Institution's different segregated funds by our fund managers. For all of Insurance Financial Institution's segregated funds, investment management fees may reduce as the funds grow in size. Annual Returns: Measures a fund's performance on a year-to-year basis. Annualized Returns: Show the cumulative returns of a fund over a specific period of time (usually one, three, five and 10 years). Annualized returns level the short-term volatility of annual returns, giving a good indication of a fund's potential for long-term growth. Also known as annualized compound returns. Asset: Anything owned that is of monetary value. An investment fund's assets are the securities its Portfolio contains. Asset Mix: The distribution of investments among different types of assets. This distribution diversifies an investment portfolio. Diversification is an excellent Investment strategy. Bond: An interest-bearing certificate issued by either a corporation, the government, or a government agency. Interest is paid on a bond in a specific amount at a specific time until the bond matures. Some bonds require a portion of the principal to be repaid annually. Book Value: The value of your capital and accumulated interest to date based on the guaranteed Interest rate at which your funds were invested. You receive book value for your Guaranteed Interest Accounts on their maturity dates. CPP (Canada Pension Plan): A government program that provides retirement, death and disability benefits for Canadians who have worked 10 or more years In Canada. Both employees and employers contribute equally for the benefit of the employee. Capital Gain/Loss: The positive or negative difference between the sale price of an investment and its purchase price. If the difference is positive, it's a capital gain. If the difference is negative, it's a capital loss. Capital Growth: The increase in value from the original purchase price of an investment to its current market value. Also known as capital appreciation. Compound Interest: Earned on the original amount of money you've invested, as well as on the interest the investment has earned. Convertible: When an investment (bond, debenture or preferred share) may be exchanged for common stock of the company that issued it. Debenture: A promissory note backed by the general credit of a company. Debentures are not usually secured by any specific property. Dividends: Distributions of earnings to a company's shareholders. Diversification: An investment strategy that spreads money over several types of Investments. One example of diversification is to balance the risk of more aggressive market-based investments with the stability of the known returns of guaranteed investments in your retirement savings portfolio.

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