We’re changing the default solution at age 71 for our registered retirement savings products
Plan members with registered retirement savings products are required to transfer their funds and begin drawing income by December 31 of the year they turn 71. Today, when no direction is given to Sun Life, we automatically transfer these funds into a Sun Life annuity.
What’s changing?
We recently announced our new target age retirement solution: Sun Life MyRetirement Income, a solution not available anywhere else in Canada. This new solution provides all the benefits plan members want with an easy transition from saving, to drawing income in retirement.
To provide a better experience and additional flexibility to Choices plan members, we’re changing the default solution at age 71 from an annuity to a Choices Registered Retirement Income Fund (RRIF) or Life Income Fund (LIF), where legislation allows and depending on account balances. This means that assets previously held in the savings vehicle will be move to the appropriate decumulation savings plan (ex: RRIF or LIF) either under MyRetirement Income or the Granite Retirement Fund. The amount held in the registered savings products will determine which default solution is chosen. For example:
- member A has 55 thousand dollars in a RRSP - follows existing processes
- member B has 90 thousand dollars in RRSP - will be defaulted to MyRetirement Income
- member C has 10 thousand dollars in a LIRA and 65K in RRSP - RRSP assets will be defaulted to MyRetirement Income
This change will be effective December 2024.
What you need to do
There is no action required for you at this time as this update is available through Choices. This update won't affect your clients that aren't invested in Choices.
How we’ll be notifying plan members
Plan members that will have turned 71 years of age by year-end 2024 will have received 4 communications advising them of the requirement to move their money into another savings vehicle, as well as their options. They will also receive a final notice letting them know that if no action is taken their assets will be moved to a RRIF or LIF contingent on the product and invested amount.
In early October, the third communication was sent to plan members. In it, MyRetirement Income was referenced both to Choices members as well as to members still invested in their employer-sponsored plans erroneously. We’re sending an updated final notice to these members in early November letting them know what their options are. For members already invested in Choices, there is no impact as they received an accurate communication.
A sample of the member communication can be found here.
A detailed flyer on plan member options can be found here.
Questions? We’re here to help.
Contact your Sun Life Group Retirement Services representative.