Sun Life BlackRock Canadian Balanced Segregated Fund closure and asset transfer
Plan sponsors may wish to consider whether this investment news has any implications for the investment options available within their plans. Sun Life Assurance Company of Canada purchases units of the funds listed below, which are established as segregated funds in accordance with the Insurance Companies Act (Canada).
Sun Life Global Investments (SLGI) recently completed a comprehensive review of its product offering. Following the review, SLGI has decided to consolidate some products. The goal is to increase efficiency and ensure their investment team can focus on producing strong performance for other investment strategies.
As part of the consolidation, SLGI will merge the Sun Life BlackRock Canadian Balanced fund with another fund available only to their retail Clients. The fund is not available on Sun Life Group Retirement Services’ (“GRS”) Core investment platform.
Because of SLGI’s decision, GRS will have to close the Sun Life BlackRock Canadian Balanced Segregated Fund (“discontinued fund”) on June 5, 2020. We will transfer the money in the discontinued fund to the TDAM Canadian Balanced Index Segregated Fund (“replacement fund”) on June 5, 2020. The replacement fund has the same investment style (passive). It also invests in the same asset classes as the discontinued fund. We expect the investment management fees for the replacement fund to be the same, or lower, than those for the discontinued fund.
The consolidation does not affect the following funds:
- Sun Life Granite and Milestone Target Date series,
- Sun Life Granite Target Risk series, and
- Other segregated funds managed by SLGI currently offered in the Core investment platform.
Action may be required
The transfer will happen, unless we explicitly receive different instructions from plan sponsors currently offering the discontinued fund.
You may want to transfer your plan’s assets into a different fund already available within your lineup. In that case, you will need to make this selection and inform Sun Life of your decision by May 8, 2020. If you are satisfied with the replacement fund suggested, you don’t have to take any action at this time.
Your plan may not currently offer the replacement fund. In that situation, Sun Life will automatically add the replacement fund to your lineup before the asset transfer occurs.
How will this affect your members?
On June 5, 2020, we will automatically transfer any assets remaining in – and any future contributions directed to – the discontinued fund to the replacement fund. When the changes are implemented, plan members will see a sale of the discontinued fund and the purchase of the replacement fund reflected in their accounts. This change will not result in a taxable capital gain or loss for plan members, if their money is invested in a registered product. Plan members with money in a non-registered product will likely experience a capital gain or loss when we transfer the money to the replacement fund. The members must report capital gains in the year the transfer occurs. Plan members can move their money at any time before the transfer automatically takes place on June 5, 2020.
We will provide communications to your members that include details about:
- the discontinued fund’s closure,
- the replacement fund, and
- what will happen to their money on the date of closure.
If you wish to have us provide a custom message to your members, please contact your Group Retirement Services representative by May 8, 2020.
About the replacement fund
The TDAM Canadian Balanced Index Segregated Fund seeks to earn a moderate income and capital appreciation through investment in TDAM’s index funds. TDAM’s Quantitative Strategy team adjust the Fund’s asset allocation on quarterly basis to reflect the average asset allocation of pooled pension funds in Canada. As of December 31, 2019, the Fund’s performance of 6.55% on a 5-year annualized basis tracked the performance of its benchmark.
TD Asset Management Inc. (TDAM) is a wholly-owned subsidiary of The Toronto-Dominion Bank, and a member of the TD Bank Financial Group. As of December 31, 2019, TDAM managed $ 182.9 billion of assets in passive and active investment strategies across markets and asset classes.
Please contact your Sun Life Group Retirement Services representative.