Jarislowsky Fraser Fossil Fuel Free Segregated Funds closure and asset transfer

Sun Life regularly reviews the fund offerings in response to client interest and evolving fund offerings in the market.

On October 18, 2022, we’ll close the following segregated funds (“discontinued funds”):

• Jarislowsky Fraser Fossil Fuel Free Balanced
• Jarislowsky Fraser Fossil Fuel Free Bond
• Jarislowsky Fraser Fossil Fuel Free Canadian Equity
• Jarislowsky Fraser Fossil Fuel Free Global Equity

We have decided to close the discontinued funds due to lack of client interest in the divestment (negative-screened) funds. 

On October 18, 2022, we’ll transfer any money in – and any future contributions directed to - the discontinued funds to the replacement funds as listed below. 

The replacement funds use similar screens as the discontinued funds. They won’t invest in companies directly involved in the extraction, processing and transportation of coal, oil, or natural gas (fossil fuels).

The investment management fees for the replacement funds will be the same, or lower, than those for the discontinued funds.  

Your plan(s) may not currently offer the replacement fund(s) in the lineup. In that situation, we’ll automatically add the replacement fund(s) to the lineup before the asset transfer occurs.

Action may be required

The transfer will happen unless we explicitly receive different instructions from you (see next paragraph). 

You may want to transfer the money in the discontinued fund(s) into either:

• fund(s) currently in your line-up in a similar asset class, or
• an alternative on the Core investment platform which better suits your plan’s needs.

If you wish to select a different replacement fund(s) and/or asset transfer date, you need to make this selection and inform Sun Life of your decision by September 9, 2022. 

You don’t have to take any action if you are satisfied with the automatic replacement funds and date suggested above.

How will this affect your members?

On October 18, 2022, we’ll automatically transfer any money remaining in – and any future contributions directed to – the discontinued fund(s) to the replacement fund(s). When the changes take effect, plan members will see a sale of the discontinued fund(s) and the purchase of the replacement fund(s) 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 plan. 

Plan members with money in a non-registered plan will likely experience a capital gain or loss when we transfer the money to the replacement fund(s). The members must report capital gains or losses on their tax return in the year the transfer occurs. 

Plan members can move their money to any other funds offered in the plan. They can do so at any time before the transfer automatically takes place on October 18, 2022.

About the PH&N Fossil Fuel Free (FFF) segregated funds

PH&N investment teams use two layers of screening framework. The first screening removes companies on the Carbon Underground 200 list. The list ranks publicly-owned companies with coal, oil, and gas reserves by the carbon emissions embedded in their reserves. The second screening uses a proprietary FFF framework that RBC Global Asset Management (“RBC GAM”), PH&N’s parent company, developed with Sustainalytics.

The exclusions have only a small impact on the number of investable companies. The excluded companies make up about 6.9% of the FTSE Canada Universe Bond Index. 

The fund’s objective to reduce volatility will lead to a portfolio that already has very little exposure to fossil fuel companies. This is because the fossil fuel companies’ share prices are generally pro-cyclical and more volatile than the share prices of companies in the other sectors. Consequently, the fossil fuel screening has a smaller impact to the portfolio in comparison to a traditional Canadian equity strategy.

PH&N FFF Balanced Segregated Fund

The fund has a fund of funds structure that provides exposure to fixed income, global equity and emerging markets equity (excluding fossil fuel companies).  The fund does not invest in Canadian equity because Canadian equity market has a large exposure to fossil fuel companies. PH&N believes an allocation to a carbon intensive market provides a limited benefit to investors seeking FFF exposure. 

The fund’s asset mix is as follows.

Important information for CREs: Marketing will provide the member communication for only those following the recommended mapping. If your Client wants to map the assets to a fund other than the PH&N Funds and/or on a different date, you’ll need to submit a communication request through the Shared Services intake form, regardless of the sweep date. 

To ensure your client doesn’t receive the generic communication, please submit the unique mapping instructions to the email addresses below by no later than September 9, 2022.   

• GRS.Plan.Set.Up@sunlife.com 
  
• GRS.Seg.Fund@sunlife.com 
• SFManagement@sunlife.com 
• Jeff.Beltrano@sunlife.com
• Jessica.MacKinnon@sunlife.com 

Communications plan

This communication will be distributed as outlined in the communication plan below. Copies of this communication is available on the GRS Market Development Showcase under Sponsor Experience > SunINsight > Investment News > 2022. 

Questions?

Please contact your Sun Life Group Retirement Services representative.