Sun Life Financial and CI Investments Inc. are revamping their segregated fund line-up to ensure the products meet the needs of clients throughout their lifetime, the two firms said Wednesday.

Effective July 31, Sun Life and CI will implement increases in the insurance fees and limit certain premium deposits for their seg fund line-up. Price increases will vary by asset class, guarantee type, rider options, and risk of funds.

For fees charged to seg funds, the increases will range from no change to 0.30%. In addition, the Guaranteed Minimum Withdrawal Benefit (GMWB) rider fee increase on SunWise Elite Plus will be 0.10 to 0.30%. There are no changes to fees for other riders.

New premium deposits will no longer be accepted for certain segregated fund products, including:
• SunWise Elite Full Guarantee Option (Class A – 100% deposit maturity / 100% death benefit);
• SunWise Elite Plus Full Guarantee Option (Class A GWB – 100% deposit maturity / 100% death benefit)
• SunWise; and
• Clarica Portfolio.

Clients who currently have a pre-authorized chequing plan or systematic transfer plan for their premium deposits can continue to make these types of contributions to existing investment options, the companies add.

“With the backdrop of the current market environment, we have reviewed the options available within our segregated fund products,” says Dean Connor, president, Sun Life Financial Canada. “These changes balance our commitment to providing products that meet the needs of our clients throughout their lifetime, with the strong risk management focus that has put Canadian insurers in a position to weather these turbulent markets.”

New contracts and premium deposits will continue to be accepted for SunWise Elite and SunWise Elite Plus Combined Guarantee Option (Class B – 75% deposit maturity / 100% death benefit) and Basic Guarantee Option (Class C – 75% deposit maturity / 75% death benefit). New contracts will be required to have at least 30% of the value of the portfolio allocated to fixed-income investments.

The principal protection guarantees (deposit maturity and death) and GMWBs associated with current investments, which are provided by Sun Life Assurance Co. of Canada, remain in place and continue to protect clients’ investments, the companies say.

“We continue to be committed to the segregated fund market and believe that products such as SunWise Elite and SunWise Elite Plus are market-leading products that play an important role in an investor’s overall financial plan,” adds Connor.

“During the recent challenging markets, our segregated funds clearly demonstrated their value to investors,” says Peter Anderson, CEO, CI Investments. “SunWise Elite Plus continues to offer a compelling combination of benefits to Canadians, including principal protection and an income for life that is guaranteed, no matter what happens in financial markets.”

“Certain funds in the SunWise Elite, SunWise and Clarica Portfolio lineups will be closed to new investments, including transfers from other funds,” the companies say.

Sun Life and CI investments say that full details of these changes are expected to be communicated to advisors and affected clients in the coming weeks.

IE