Sun Life Financial to offer TFSA investment solutions for individuals and employers

Advice is key to unlocking potential of new Tax-Free Savings Account

TORONTO, Sept. 4 2008 – Sun Life Financial today announced plans to offer its customers and group plan sponsors a number of opportunities to take full advantage of the new Tax-Free Savings Account (TFSA), available January 1, 2009. Sun Life Financial will offer the TFSA investment option to retail clients through accumulation annuities and GICs, and through its SunWise Elite suite of segregated funds. Employers with Sun Life Financial group plans can also choose to make TFSA options available to their employees.

“The TFSA is the most significant incentive for Canadians to save since the introduction of Registered Retirement Savings Plans (RRSPs),” said Dean Connor, President, Sun Life Financial Canada. “Every Canadian can benefit from this flexible account, from saving for a down payment on a home to providing additional income for retirement. With so many options for this account, working with a financial advisor is key to finding out how the TFSA best fits into your overall financial plan.”

Unlike an RRSP, a TFSA is not limited to a specific saving goal, and will appeal to a broad range of Canadians of all ages and income levels. For example, a baby boomer could use a TFSA to directly fund future health care costs or to pay future premiums for coverage such as personal health insurance, a retiree extended health care plan or long-term care insurance.

“According to our research, a significant number of Canadians said that they worry about paying for health care costs in retirement, but the majority of individuals have not planned for it,” said Connor. “We know the increasing cost of health care is a concern for Canadians, and the TFSA can be a powerful incentive to help people plan for health costs in retirement.”

The TFSA is a tax effective savings vehicle that can allow Canadians to save for future needs, including health care plan premiums and expenses. Sun Life Financial will offer clients a number of options for the upcoming TFSA, both at home and at work:

Individual Insurance and Investments

  • Sun Life Financial GICs offer competitive rates; short-term options from 30 days to 364 days; flexible maturity dates that allow you pick the exact redemption date; and a 45 day rate guarantee that lets you lock in your interest rate up to 45 days before you deposit your money.
    • Sun Life Financial is currently offering customers a promotional rate on short term GICs, to encourage customers to prepare for the TFSA.
  • Accumulation annuities are similar to GICs, but allow customers to invest with a lump sum or make periodic deposits at regular intervals or on a flexible payment basis. The value within the annuity grows as deposits are made and as it earns interest.
  • Investing in annuity contracts including segregated fund contracts, offered only by the insurance industry, provides the additional benefit of an insurance contract for estate planning. This includes designating a beneficiary, which can eliminate probate and estate fees.
  • SunWise Elite is a family of segregated funds, which are investments that combine growth with protective features of an insurance contract. The contracts are issued by Sun Life Assurance Company of Canada and managed by CI Investments Inc.

Group Retirement Services

  • Sun Life Financial will offer a TFSA product that employers can make available to their employees to complement their existing company sponsored retirement and savings program. The product will include investment choices tailored to the employer’s unique needs and aligned with their existing group plan.
  • Employees will be able to contribute to the account through automatic payroll deductions.
  • There will also be an option for individuals to continue making contributions to their account even after they leave the group plan.

Group Benefits

  • The TFSA will allow employees to tax-effectively save to fund their future health care expenses and health insurance premiums. For example, Sun Life Financial’s Extended Health Care Insurance for Retirees provides employers and employees with an affordable retirement health care solution. And it can be purchased without proof of good health if employees apply within 60 days of leaving their current health benefit plan.
  • Plan Sponsors with flexible benefit programs can add the TFSA account as on option providing employees with the ability to transfer unused flex credits into a TFSA.

Starting January 1, 2009, any Canadian resident over age 18 can contribute up to $5,000 each year into a TFSA. Interest is earned tax-free and funds are accessible at any time and not taxed on withdrawal.

About Sun Life Financial

Serving one in every five Canadians, Sun Life Financial is a leading international financial services organization providing a diverse range of protection and wealth accumulation products and services to individuals and corporate customers. Chartered in 1865, Sun Life Financial and its partners today have operations in key markets worldwide, including Canada, the United States, the United Kingdom, Ireland, Hong Kong, the Philippines, Japan, Indonesia, India, China and Bermuda. As of June 30, 2008, the Sun Life Financial group of companies had total assets under management of $413 billion.

Sun Life Financial Inc. trades on the Toronto (TSX), New York (NYSE) and Philippine (PSE) stock exchanges under ticker symbol SLF.