2018

July 13, 2018

The Group Choices Retirement Income Plan is getting a new fee structure

On Aug. 1, 2018, Sun Life is introducing a new fund management fee (FMF) approach for the Group Choices Retirement Income Plan. The new approach includes a tiered fee structure based on a client's account balance at the time they opened their income plan. Existing clients won't see a fee increase because of this change and some client's FMFs will decrease. New and existing Group Choices Retirement Income Plan clients have already been notified.

The Group Choices Retirement Income Plan is changing to a new, tiered fee structure. There will be four tiers and the fund management fees (FMFs) a client pays will be based on their account balance at the time they opened their account.

How will the new tiered structure work?
When a client opens a Retirement Income Plan, we'll place them in one of four FMF tiers based on their account balance. Clients can also qualify for lower fees by transferring money from other institutions to their income plan at any time. A client's FMFs will not increase as they continue making regular income withdrawals.

The table below outlines the tiers and corresponding fee reductions:

Tier Retirement Income Plan opening account balance Maximum fee reduction*
1 $0 - $74,999.99 ---
2 $75,000 - $299,999.99 0.05%
3 $300,000 - $999,999.99 0.50%
4 $1,000,000+ 0.60%

*The fee reductions you see in this table are the maximums available under the Group Choices Retirement Income Plan. The reduction applies to all of the funds in a client's Retirement Income Plan except Guaranteed Interest Accounts (GIAs) and some composite funds, which are not subject to FMFs. The actual fee reduction a client receives will depend on the individual investment funds in their Retirement Income Plan account.

How does this change impact existing Group Choices Retirement Income Plan clients?
We'll map existing clients to the appropriate tier based on their account balance at the time they opened their Retirement Income Plan. If the FMFs a client is currently paying are lower than the tier we map them to, they'll continuing paying the lower fees. This ensures that there's no negative impact and that all existing clients' FMFs stay the same or decrease starting on Aug. 1, 2018.As well, for clients with savings in both the Group Choices Retirement Income Plan and a Group Choices savings plan, we'll use their combined balance to determine their tier.

Why are we making this change?
The goal of this change is to ensure that the Group Choices Retirement Income Plan remains competitive, while also creating a consistent and transparent fee structure that's fair for all clients. By creating a tiered structure, we're giving clients the opportunity to qualify for lower fees automatically by transferring money into their income plan with Sun Life. The change also creates consistency between the Group Choices Savings plans and Retirement Income Plans.

Communication plans
We'll be communicating this change to plan sponsors on July 16 2018. New and existing Group Choices Retirement Income Plan clients have already been notified.

Questions?
Please contact your Sun Life Financial Group Retirement Services representative.