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 fund listed below, which is established as a segregated fund in accordance with the Insurance Companies Act (Canada).
MFS Investment Management Canada (MFS) will add a new target date fund to its LifePlan Target Date series (LifePlan). Effective July 13, 2021, the MFS LifePlan 2065 Target Date Segregated Fund (LifePlan 2065) will be available on the Sun Life Core investment platform.
We’ll automatically add LifePlan 2065 to plans that currently offer LifePlan to their members on July 13, 2021.
Investment managers periodically add new longer-dated funds to their target date series to match the time horizons of younger plan members. Plan members expecting to retire around the year 2065 may benefit from the new fund.
How will this affect you and your plan members?
You or your plan members don’t have to take any action. If you currently offer LifePlan to your members, we’ll automatically add LifePlan 2065 to your line-up on July 13, 2021.
We’ll post a notice about the LifePlan 2065 addition for your members who currently invest in the LifePlan 2055 or LifePlan 2060 funds. The notice is available in the Communications section at mySunLife.ca.
Before LifePlan 2065 addition, LifePlan 2055 and LifePlan 2060 were the funds with the longest maturity. Young plan members who joined your plan(s) recently might have defaulted into or selected LifePlan 2055 or LifePlan 2060. If they expect to retire around the year 2065, they may review and decide whether LifePlan 2065 is more appropriate for them.
As of June 2021, the asset mix of LifePlan 2055, LifePlan 2060 and LifePlan 2065 are identical. The asset mix is 90% equity, 0% fixed income and 10% listed real estate. The asset mix will not change until 25 years before the maturity. It means the asset mix of LifePlan 2055, LifePlan 2060 and LifePlan 2065 will start changing in year 2030, 2035 and 2040, respectively. If members investing in LifePlan 2055 or LifePlan 2060 move their money to LifePlan 2065, they may benefit from a higher asset growth potential. It’s because the LifePlan 2065 will have a higher equity allocation for a longer period compared to LifePlan 2055 and LifePlan 2060.
Plan members can still access the series of funds available within their plan through mySunLife.ca.
About the MFS LifePlan Target Date series
LifePlan combines a quantitative discipline with globally diverse investment strategies and risk management tools. This approach results in a glide path and asset allocation that seeks to:
- minimize behavioural biases
- grow members' assets during their working life
- preserve those assets as they enter retirement
MFS’ Quantitative Solutions team, led by portfolio managers Joseph Flaherty and Natalie Shapiro, manages the glide path and asset allocation for LifePlan.
Please contact your Sun Life Group Retirement Services representative.