Sun Life recently discovered that TD Asset Management (TDAM) submitted incorrect benchmark returns to Morningstar®. The errors occurred between June 30, 2016, and December 1, 2020, for the TDAM Hedged U.S. Market Index Segregated Fund (the Fund).
Effective June 30, 2016, TDAM changed the benchmark for the fund. It changed from the S&P 500 Hedged Total Return Index (C$) to a blended benchmark. The new benchmark is a blend of 85% S&P 500 Hedged Total Return Index (C$) and 15% S&P 500 Hedged Price Index (C$). TDAM updated the benchmark description to reflect the change in Morningstar®. They inadvertently continued to report the old benchmark returns to Morningstar®.
TDAM corrected the error on December 1, 2020. The returns found in Morningstar® now correctly reflect the previous benchmark returns until June 30, 2016, and the new benchmark returns afterwards. The revised benchmark is approximately 0.30% lower than the original benchmark per year, on average, over the last four years.
During an internal investigation at TDAM, they identified why the error occurred. It was because a separate group at TDAM provided the benchmark performance reporting. They have now fixed the reporting issue by centralizing the oversight for benchmark and fund performance reporting.
How does this impact you and your plan members?
It is important to note that the Fund’s returns have always been reported correctly; only the Fund’s benchmark returns were revised. Revised benchmark returns are available on the plan sponsor and plan member services website and on Morningstar®.
You or your plan members don’t have to take any action because of this update.
Questions?
Please contact your Sun Life Group Retirement Services representative.
