Sun Life Financial report provides snapshot of group retirement landscape

Despite market volatility, Canadians thinking long-term when it comes to retirement savings

TORONTO, May 20 2009 – Employees who invest in their company’s group retirement and savings plans are paying more attention to their investments than ever before, according to Sun Life Financial’s InSight, a research report that provides information on issues that are relevant to the Canadian group retirement services industry. Although the recent economic downturn had many plan members contacting their plan providers looking for general education and investment advice, members were not moving their money any more than they were a year ago. For the most part, members were holding steady and not making emotional decisions.

Data from Sun Life Financial, the leading provider of defined contribution, group RRSP and Deferred Profit Sharing Plans in Canada, showed a marked increase in their Customer Care Centre and Plan Member Services website volume in the latter part of 2008 as employees became more focused on their savings. Not surprisingly, plan members in their 50s appeared to be the most engaged in terms of investment inquiries, but they also seemed to be the most comfortable using the web to find their answers. The report found that four times as many members in their 50s visited the Plan Member Services website as those in their 20s.

“While this economic downturn has had an impact on investments, it’s encouraging to see plan members taking a long-term approach and seeking assistance through our call centre and website when it comes to their savings,” said Claude Accum, Senior Vice-President, Group Retirement Services, Sun Life Financial Canada. “Taking advantage of savings programs at your workplace can play a significant role in a person’s overall financial plan.”

The report also detailed the economic impact on plan members’ investments. While the downturn has affected the performance of institutional and retail funds alike, many plan members are taking advantage of portfolios that utilize long-established investment mandates and strategies such as balanced or target date funds. Employees who have access to group saving plans at work can take advantage of the following benefits:

  • Contributions to employer-sponsored programs are made pre-tax through convenient payroll deduction
  • Fees can be significantly lower than retail mutual fund MERs because employers often receive a volume discount through group savings programs
  • Through their employer, employees gain access to a broad set of funds, many of which are usually only available to the high net worth market

“According to our Unretirement Index(TM), a study conducted last year, working Canadians of all ages are becoming more risk averse and are looking for investments that offer some guarantees. It’s not a surprise that plan sponsors are beginning to embrace the concept of guaranteed target date funds, such as Sun Life’s Milestone Funds(R),” said Accum.

Sun Life Financial Group Retirement Services is the leading provider of group retirement services in Canada serving almost one million plan members. As of December 31, 2008, Sun Life Financial Group Retirement Services had a 34 per cent share of defined contribution plans with CDN$31 billion in assets under administration.

About Sun Life Financial

Sun Life Financial is a leading international financial services organization providing a diverse range of protection, 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 December 31, 2008, the Sun Life Financial group of companies had total assets under management of CDN$381 billion.

Sun Life Financial Inc. trades on the Toronto (TSX), New York (NYSE) and Philippine (PSE) stock exchanges under ticker symbol SLF. For more information on Sun Life Financial, visit www.sunlife.ca.