Changes are coming for members of Western’s Retirement Income Fund (RIF), as the Board of Governors approved Sun Life Financial as the university’s preferred external provider. The move to discontinue the Western RIF, in favour of a group RIF program with an external provider, comes after months of consultation between Sun Life, Western and stakeholders including 380 Western RIF members, mainly comprised of retirees and former employees.
‘This is great news for current Western RIF members and future retirees,” said Jane O’Brien, associate vice-president (Human Resources). “This decision means we can offer an outstanding option to those who are seeking an income flow from their Western pension savings. Sun Life’s plan offers the best value – high-quality investment management, and an excellent client-service model.”
The 10-year agreement includes two additional five-year renewals at the university’s option. Western receives no payment from the agreement, but used its size and bargaining power to strike a deal that would be difficult for an individual to negotiate on their own in the retail market.
The agreement will allow Western investment staff to maintain a strong voice with Sun Life on investment funds and fund managers, and also have a seat during discussions on client services. The university will also work with the company on on-campus education programs.
Based in Toronto, Sun Life Financial, is a Canada-based financial services company that manages nearly $698 billion in investment assets across the globe.
The negotiated fees are the same or lower than those currently paid by Western RIF members, and dramatically lower than ones offered to ‘walk-in’ customers, O’Brien said. Those joining during the 10-year agreement will be guaranteed the same fee structure as quoted in the 2014 proposal, for their lifetime.
Despite the change, Western investors will see a replication of the existing investment funds, and will also be able to choose from funds currently only available to the University Pension Plan members and some new selections as well.
Western will soon be contacting members and begin providing more information.
“We know some of our members are anxious to take advantage of this opportunity. We anticipate people may begin enrolling as early as May 1, with more opportunities before the end of 2015. We want to support people as they consider their options and give them ample time to make decisions,” O’Brien said.
Members will continue to have the option to move their funds to another provider of their choice at any time.
“The Western RIF was a great service to our retirees when it was established, but the quality of products now available to retirees has changed dramatically,” O’Brien continued.
Western exits the RIF after its ability to offer services and investments to retiring faculty and staff became more limited over the years.
“We’re not a financial institution, and so we face limitations that other providers don’t face,” O’Brien continued, citing the university being limited in the investments and advice it could offer members.
Western was the first – and only – Ontario University to offer a RIF program using the same investment structure as their pension plan.
“We know some members expressed concern that the RIF would no longer be fully controlled by Western. We want to assure them that, in choosing Sun Life as a preferred provider, we believe our retirees will have access to high-quality of investments and services,” O’Brien concluded.
