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).

In April 2021, Sun Life discovered that incorrect fund returns were calculated by MFS and submitted to Morningstar®.  The funds affected were the MFS Conservative Allocation Segregated Fund and MFS LifePlan Retiree Segregated Fund (the Funds).  The incorrect returns were as of March 2021 month-end.  They would have been visible in all reports downloaded from Morningstar® between April 15, 2021, and April 30, 2021.

The miscalculation was the result of an administrative error at MFS’ Custodian, State Street Canada (“the Custodian”).  The Custodian failed to accurately reflect the required distributions for the Funds.

Due to the miscalculation, both Funds’ monthly returns were understated by approximately 51 basis points as of March 31, 2021.  This also affected all longer-term and annualized returns in the Morningstar rate of return reports.

In order to correct this error, Sun Life restated the Funds Net Asset Values as of April 1, 2021, increasing the April 2021 returns by approximately 51 bps.

For all transactions during the period where member accounts would have been negatively impacted, Sun Life would have compensated the account.  For transactions where accounts benefitted, the accounts would have kept the benefit.  There were no instances where member accounts were negatively impacted.  So no adjustments were required for member`s accounts due to the error. 

MFS takes these errors very seriously and quickly addressed this with the Custodian.  To ensure the error does not reoccur, the Custodian has implemented three new procedures:

  1. Retraining of internal employees (completed April 2021)
  2. An additional peer-review for quarter-end (completed ahead of June 30, 2021, income distributions)
  3. Re-communication of the MFS Net Asset Value Error Policy internally (completed April 2021)

How does this affect you and your plan members?

Revised Fund returns are available on the Plan Sponsor website and on Morningstar.  

Questions?

Please contact your Sun Life Financial Group Retirement Services representative.