Changes in the Sun Life Financial Voluntary Retirement Savings Plan (VRSP)

Maturity of the Sun Life 2025 Target Date Segregated Fund

The Sun Life 2025 Target Date Segregated Fund (“Sun Life 2025 Fund”) is approaching maturity.

When a typical target date fund reaches the year in its name, it will have generally reached its final, most conservative investment mix. This investment mix seeks to provide income and moderate long-term growth of capital for investors beginning to withdraw money.

The Sun Life 2025 Fund’s investment mix will stop evolving in July 2025. At that date, it will become identical to the Sun Life Retirement fund. Sun Life Global Investments (SLGI) will automatically merge the maturing Sun Life 2025 Fund into the Sun Life Retirement fund on July 16, 2025.

We will automatically direct future contributions to the Sun Life Retirement fund for anyone invested in the Sun Life 2025 Fund.

Tax impact

The fund merger does not have any tax implications for money held in the VRSP since this is registered (tax-deferred) money.

Sun Life adds the new 2065 fund to VRSP

We will add the Sun Life 2065 Target Date Segregated Fund to the Sun Life Target Date series to the VRSP on June 18, 2025.

From time-to-time, investment managers add new longer-dated funds to their target date series. These match the planned retirement years for younger employees. Employees expecting to retire around the year 2065 may benefit from this new fund.

About the Sun Life Target Date Segregated Funds

The Sun Life Target Date series provides employees with a simple solution that is well diversified and importantly, is designed to automatically becomes less risky over time. The funds are easy to understand with the target retirement year in the name, so employees can feel comfortable about their investment decisions. These funds are the default investment option for the VRSP, so members who don’t make an active investment selection will be automatically invested in the target date fund which most closely matches their target retirement age, based on their date of birth, and does not exceed the year they turn 65.  

Changes to Age 71 default

Starting December 31, 2025, we’re also changing the default income solution for plan members in the year they turn 71. This also applies to plan members who are 71 in 2025. Changing the default income solution provides plan members with greater flexibility, as they can access their savings at any time. In addition, plan members who want guaranteed lifetime income can still purchase an annuity with their savings whenever the time is right.

Currently, when age 71 plan members don't provide investment instructions for their tax-deferred registered savings accounts, we automatically default these funds into a Sun Life annuity. Starting December 31, 2025, the default income solution will change from an annuity to a Sun Life Registered Retirement Income Fund (RIF)/Life Income Fund (LIF), as follows:

• Less than $75,000 in assets. If the plan member has assets of less than $75,000, these will be rolled over to the Sun Life Granite Moderate Retirement Fund in a Group Choices RIF or LIF account. We’ll set required annual withdrawals to the minimum amount. The plan member can change their investment choice and withdrawal amount at any time.
• $75,000 or more in assets. If the plan member has assets of $75,000 or more, these will be transferred to Sun Life MyRetirement Income and held in a RIF or LIF account. We’ll set the maturity age at 95. The plan member can change the maturity age at any time. Sun Life MyRetirement Income is an automated solution that provides plan members with sustainable income until an age of their choosing. This gives them flexibility to withdraw additional savings at any time.

Sun Life will file an amendment with Retraite Quebec and will post the new plan text on the VRSP website – sunlife.ca/VRSP in mid-July 2025.

How will these changes impact plan sponsors and employees?

There is no action to take. Sun Life will communicate the changes to all VRSP members in May 2025.  You can view a copy of the member communication here.

Questions? We’re here to help.

Please contact your Sun Life Group Retirement Services representative.