One Year of Income for Life
Fraser Stark
.1 Jun 2022
.4 mins
Today we’re celebrating one year of income for life with Longevity!
On June 1, 2021, we launched the Longevity Pension Fund, the world’s first lifetime income mutual fund. This fund addresses one of the largest concerns facing retirees – income insecurity – and empowers retirees to live their lives to the fullest. To achieve this, we took the concept of longevity risk pooling, typically found within the security of a DB pension plan, and incorporated it into a mutual fund so that every Canadian retiree has the opportunity to achieve their post-work goals.
Today marks 12 months since the fund’s launch, and it’s been a tremendous first year. Over that time, we’ve welcomed hundreds of members to the Longevity family, building out all five Decumulation cohorts as well as adding members in the Accumulation class. Our earliest investors have now received 12 monthly income distributions, funding their retirement expenses and giving them confidence to live out their retirement as they dream it.
Over the past year, we assembled an experienced Longevity Advisory Committee consisting of world-renowned thought leaders and experts within the retirement and pension landscape. We’re eager to continue to work with this accomplished group as our retirement platform grows, and feel confident that their counsel on critical decisions puts the fund in solid hands.
Additionally, the Longevity Pension Fund became a component of several employer retirement programs in Canada. The number of plans that Longevity is included in will continue to grow in the coming months, providing Canadian employees with a retirement solution that helps them save during their working years, and receive income for life when they are retired.
Encouraging institutions and employers to adopt Longevity as a DC plan component for employees is a top priority for us, because we believe earning and saving money is only one side of the retirement planning coin. In a world where people are living longer than ever, the problem of decumulation—that is, how to appropriately draw down savings in retirement without risking running out—has shifted to the forefront. We believe the Longevity Pension Fund solves this problem, and deserves a place in many investors’ portfolios.
Another highlight from the past year has been working with LifeWorks (formerly known as Morneau Shepell) to define and publish the way we’ll evaluate and adjust the fund’s distribution levels* annually through our Income Policy. After carefully reviewing the Funding Levels of each cohort, we were pleased to share earlier this year that we formally held distribution levels level for every Decumulation investor in 2022, despite dealing with a challenging market environment.
We also partnered with the Canadian Association of Retired Persons (C.A.R.P.), a non-profit organization committed to advocating for the healthcare and financial security of seniors. After spending time reviewing our fund and understanding how it works, C.A.R.P began formally recommending the Longevity Pension Fund to its more than 300,000 members.
Now that the fund is a year old, we can also share performance metrics, which demonstrate how Longevity has withstood the recent market downturn, and lived up to its objective of generating returns with minimal volatility. The importance of having a portfolio that is structured with diversity across geographies, asset classes, and strategies has never been more apparent than in the current environment of rising rates, high inflation, and market swings.
The NAV per unit corresponds with Accumulation Class F.
On a personal note, our team has grown to 7, as we’ve welcomed Clayton Brown, our designated CFP® and Retirement Income Planner; Omer Poroy, our Product Analyst; Javid Alimirzoev, our Product Specialist; and Thiago Silva, our Digital Marketing Manager.
Being able to continue to innovate in the retirement space continues to energize us and we’re proud of the interest Longevity continues to receive around the world. Check out these articles in Forbes, The Globe & Mail, and the Toronto Star for examples of some of the coverage our fund has received.
Going forward, we’ll continue finding innovative solutions to problems that complicate what we believe should be some of the best years of our lives. Areas we are looking into include providing solutions for unlocking home equity, improving the education surrounding retirement planning, and providing broader access to the Longevity Pension Fund to retirees outside of Canada. As we grow our retirement platform, our motivation remains the same: we’re here to help people retire from work, not life.
*To better understand the potential outcome of distribution levels from the Fund, the Income Policy was reviewed by LifeWorks (formerly Morneau Shepell) and put to the test against their Economic Scenario Generator that simulates 2,000 potential future paths of economies and financial markets.
Commissions, trailing commissions, management fees and expenses all may be associated with investment fund investments. The prospectus contains important detailed information about the investment fund. Please read the prospectus before investing. There is no assurance that any fund will achieve its investment objective, and its net asset value, yield, and investment return will fluctuate from time to time with market conditions. If the securities are purchased or sold on a stock exchange, you may pay more or receive less than the current net asset value. Investment funds are not guaranteed, their values change frequently and past performance may not be repeated. The Fund has a unique mutual fund structure. Most mutual funds redeem at their associated Net Asset Value (NAV). In contrast, redemptions in the decumulation class of the Fund (whether voluntary or at death) will occur at the lesser of NAV or original purchase price less distributions paid.
The indicated rate of return is the historical annual compounded total return including changes in share/unit value and reinvestment of all distributions and does not take into account sales, redemption, distribution or optional charges or income taxes payable by any securityholder that would have reduced returns. Investment funds are not guaranteed, their values change frequently and past performance may not be repeated.
The Longevity Pension Fund is managed by Purpose Investments Inc. The document is not investment advice, nor is it tailored to the needs or circumstances of any investor. Talk to your investment advisor to determine if the Longevity Pension Fund is right for you and always read the prospectus before investing. Nothing on this document shall be considered a solicitation to buy or an offer to sell, or a recommendation for, a security, or any other product or service, to any person in any jurisdiction where such solicitation, offer, recommendation, purchase or sale would be unlawful under the laws of that jurisdiction. No securities commission or similar regulatory authority has reviewed this document and any representation to the contrary is an offence. Information contained in this document is believed to be accurate and reliable, however, we cannot guarantee that it is complete or current at all times. The information provided is subject to change without notice.