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).

In March 2020, we designated BlackRock Active Canadian Equity Segregated Fund (“BlackRock ACE”) as Suggested For Removal due to concerns on the strategy’s long-term viability. Please refer to the GRS Matters article here.

One of our concerns was the lack of expertise in the Canadian markets following Vincent Roy and Mark Wiseman’s departures. In Q2 2020, Julie Ducharme, Canadian-based investment strategist who supported the strategy, also departed BlackRock. We met with BlackRock in July 2020 to discuss our concerns about the strategy. The meeting did not alleviate our main concerns.

Sun Life GRS has decided to close BlackRock ACE in October 2021, as detailed below. We made the decision due to the ongoing concerns about the strategy’s long-term viability. In addition, we have lost long-term confidence in the strategy. 

 

Action may be required

Sun Life’s governance activities on BlackRock ACE (“discontinued fund”) will end on September 30, 2021. On or about October 6, 2021, we’ll transfer the money in – and any future contributions directed to - the discontinued fund to BlackRock S&P/TSX Composite Index Segregated Fund (“replacement fund”). 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 into either:

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

In that case, you need to make this selection and inform Sun Life of your decision by June 30, 2021. If you are satisfied with the default replacement fund suggested above, you don’t have to take any action at this time.

Your plan may not currently offer the replacement fund. In that situation, Sun Life will automatically add the replacement fund to your lineup before the asset transfer occurs. 

 

How will this affect your members?

On or about October 6, 2021, we will automatically transfer any assets remaining in – and any future contributions directed to – the discontinued fund to the replacement fund. When we make the changes, plan members will see a sale of the discontinued fund and the purchase of the replacement fund reflected in their accounts. These changes won’t result in a taxable capital gain or loss for plan members with money in a registered product.

Plan members with money in a non-registered product will likely experience a capital gain or loss when the transfer occurs. The members must report the capital gain or loss on their tax return in the year the transfer occurs. We recommend plan members talk with a qualified tax specialist for advice specific to their situation. Plan members can move their money at any time before the transfer automatically takes place.

We’ll provide communications to your members in August 2021.

 

About the replacement fund

The BlackRock S&P/TSX Composite Index Segregated Fund seeks to track the return and risk profile of its benchmark (S&P/TSX Composite index). The Fund invests in all securities included in the index. The Fund’s allocation in each security closely track those in the index.  BlackRock’s Index portfolio management team manage the Fund.

 

Questions?

Please contact your Sun Life Group Retirement Services representative.