Maturity of the MFS LifePlan^TM 2025 Retirement Segregated Fund

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).

If your members invest only in registered (non-taxable) plans, you don’t need to take any action as a result of this update. If you offer the MFS LifePlan^TM 2025 Retirement Segregated Fund in your non-registered (taxable) plans, please read this notice carefully on potential capital gains impact of the fund replacement and how they can manage their tax situation.

Plan members with money invested in the LifePlan 2025 Fund as part of a non-registered plan should consider the tax impact the fund maturity and merger into the retirement fund may have on their particular situation.

MFS Investment Management Canada Ltd. (MFS) has announced that the MFS LifePlan^TM 2025 Retirement Segregated Fund (“LifePlan 2025 Fund”) will mature at the end of October 2025. 

What happens to the LifePlan 2025 Fund at maturity?

In general, when a target date fund reaches the year identified in its name, it will have reached its most conservative investment mix. This investment mix of a LifePlan target date fund increasingly seeks more income and stability (e.g. fixed income exposure) as it approaches its target year.

The LifePlan 2025 Fund’s asset mix will stop evolving and will become identical to the MFS LifePlan^TM Retiree Segregated Fund (“LifePlan Retiree Fund”) in October 2025. The target allocation for the LifePlan Retiree fund is 29% equities and 71% fixed income.

Effective immediately, you will no longer be able to add the LifePlan 2025 Fund to your line-up if you don’t offer it already.

After November 25, 2025, member contributions (contributions or transfers-in) will no longer go into the LifePlan 2025 Fund. Sun Life will redirect all future member contributions in the LifePlan 2025 Fund to the LifePlan Retiree Fund.

Sun Life will close and merge the LifePlan 2025 Fund into the LifePlan Retiree Fund on June 17, 2026.

Plan members can keep their money in the LifePlan 2025 Fund until June 17, 2026. Sun Life will then move plan member money into the LifePlan Retiree Fund. Alternatively, plan members can move their money in the LifePlan 2025 Fund to the LifePlan Retiree Fund (or any other fund that meets their needs) any time before June 17, 2026.

For members who hold the fund in a non-registered plan, the merger of a maturing target date fund into a retirement fund is considered a taxable event in Canada.

Tax impact for Non-Registered plans

Plan members with money in a Non-Registered plan may experience a capital gain or loss when money is transferred from the LifePlan 2025 Fund to the LifePlan Retiree Fund. Members must report capital gains and losses in the year the transfer occurs. Sun Life will provide the applicable tax slip(s) that reflect all income from members’ Non-Registered investments. For tax planning purposes, members can choose to transfer their money our the LifePlan 2025 Fund in 2025 and/or before June 17, 2026.

We’ve provided more information about how capital gains/losses are generated and their impact here. We recommend that members talk with a tax professional for advice specific to their situation and taxable investments.

About the MFS LifePlan^TM Retirement Target Date Series

The MFS LifePlan^TM Target Date Series invests across various asset classes, investment styles and geographic regions. The series invests in approximately 20 underlying funds managed by MFS. The LifePlan funds provide exposure to the following asset classes:

• Canadian equities
• U.S. equities
• International equities (developed and emerging markets)
• Global equities, including small to medium capitalization
• ixed income (domestic and foreign)
• Global Real Estate Investment Trusts (REITs)

We recently communicated important enhancements to the strategic asset mix of the MFS LifePlan^TM Retirement Target Date Series that you can view here.

How will this affect you and your plan members?

You and your plan members do not need to take any action at this time. We’ll send an email to impacted members on or around October 20, 2025, and a reminder again in early May 2026. We will also post this member communication in the Message Centre on Sun Life’s secure member site. Here is a copy of a member message for your reference.

Questions?

Please contact your Sun Life Group Retirement Services representative*.

*In Quebec, registered as a Group annuity plans advisor.