Purpose Investments Launches Longevity Pension Fund, the World’s First Income-for-Life Mutual Fund

By Purpose Investments01 Jun 2021
5 Min Read

Longevity Pension Fund was designed to address the growing social challenge around income security in retirement for Canadians

Purpose Investments Inc. (“Purpose”) is thrilled to announce the launch of the Longevity Pension Fund (“Longevity” or the “Fund”), the first income-for-life mutual fund designed for Canadians in retirement. The Fund seeks to help all Canadians feel financially secure in retirement and have the freedom to enjoy their post-work years as they choose. Similar in design to a defined-benefit pension, the Fund distinguishes itself from other mutual fund products by incorporating longevity risk pooling in order to provide lifetime income to Canadian retirees, while also providing investors with the flexibility to redeem or invest more into the Fund at any time.

The launch of the Fund comes at an important time for all Canadians, but especially for those aged 55+, who have been struggling to find sustainable retirement solutions. According to a new survey from Purpose and Angus Reid, half of Canadians aged 55+ are not confident that they will have enough money to last them in retirement. And the pandemic has only intensified these fears, with one-in-five Canadians aged 55+ claiming they have had to withdraw funds, delay retirement, or stop contributions to their retirement savings due to the pandemic. Meanwhile, according to Statistics Canada, over 1,000 Canadians turn 65 every day, while at the same time the number of Canadians covered by a defined-benefit pension plan has steadily decreased over the past 30 years, creating a major social challenge around income security for Canadian retirees.

But finally, Purpose is proud to have innovated an important solution that tackles the issue of long-term income security.

Purpose Investments CEO and Founder, Som Seif, explains, “The financial services sector can be very good at helping people accumulate and save. But as life expectancies increase and corporate pension plans disappear, our industry has ignored the development of real solutions to support people in retirement and give them the financial security and confidence to know they will be okay.” Seif continues, “With Longevity, we want to solve this problem and democratize retirement by offering everyone a defined-benefit-like product, so they know a paycheque is coming for as long as they live.”

“Longevity combines the lifetime income model of an annuity with the flexibility and ease of use of a mutual fund, so Canadians no longer need to choose between having regular distributions and financial flexibility,” says Fraser Stark, President of the Longevity Retirement Platform at Purpose Investments. “The flexibility of Longevity means that an investor doesn’t have to make a decision at the start of their retirement that they can’t get out of if circumstances change in their lives.”

After working closely with Canadian securities regulators through a full review of the disclosure documents on a confidential pre-file basis, the Fund’s prospectus was issued a final receipt on May 31, 2021. The Fund is designed as a single-ticket solution for both segments of a person’s life – “accumulation” and “decumulation” periods. Although Longevity’s most significant innovation is the income-for-life decumulation feature that provides monthly lifetime distributions when investors are 65 years old or older, the Fund can also help investors younger than 65 years old save money pre-retirement. When an investor younger than 65 years old invests in the Fund, in the month following their 65th birthday, the transition between saving (accumulation) and receiving a lifetime income (decumulation) happens automatically and is not expected to trigger a taxable event.

Like any mutual fund, the Fund is available for every Canadian investor to own and can be held in both registered and non-registered accounts.

Longevity will also help revolutionize workplace defined-contribution and group plans by providing plan sponsors with a core decumulation option for their employees upon retirement.

“We see the Fund not only as a tool to empower investors but also a great solution for workplace defined-contribution and group plans,” says Stark.

Lifetime income targets will vary based on the class purchased. “Our hope with Longevity is that people will have a happier retirement because they will know that their income will last as long as they do regardless of whether they live 10 years or 40 years post retirement,” Seif concludes.

The Fund is the first product released as part of a new holistic retirement solutions platform launched by Purpose. To learn more about the Fund and Purpose’s mission to help Canadians embrace retirement with income for life, please visit www.retirewithlongevity.com.

About Purpose Investments Inc.

Purpose Investments is an asset management company with more than $11 billion in assets under management. Purpose has an unrelenting focus on client-centric innovation, offering a range of managed and quantitative investment products. Purpose is led by well-known entrepreneur Som Seif and is a division of Purpose Financial, an independent, technology-driven financial services platform which is reshaping the industry by connecting and creating opportunities across asset management, wealth management and small business financial services.

*Survey Methodology

An online survey of 1,503 Canadians was completed in May 2021, using Angus Reid’s online panel. For comparison purposes, a probability sample of this size has an estimated margin of error (which measures sampling variability) of +/- 2.4%, 19 times out of 20.

For further information please contact:

Keera Hart
Keera.Hart@kaiserpartners.com
905-580-1257


Commissions, trailing commissions, management fees and expenses all may be associated with investment fund investments. Please read the prospectus and other disclosure documents before investing. Investment funds are not covered by the Canada Deposit Insurance Corporation or any other government deposit insurer. There can be no assurance that the full amount of your investment in a fund will be returned to you.  Investment funds are not guaranteed, their values change frequently and past performance may not be repeated. Distributions are not guaranteed, and distribution levels may increase or decrease. 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 the initial investment amount less any distributions received.

Certain statements in this communication are forward-looking. Forward-looking statements (“FLS”) are statements that are predictive in nature, depend on or refer to future events or conditions, or that include words such as “may,” “will,” “should,” “could,” “expect,” “anticipate,” intend,” “plan,” “believe,” “estimate” or other similar expressions. Statements that look forward in time or include anything other than historical information are subject to risks and uncertainties, and actual results, actions or events could differ materially from those set forth in the FLS. FLS are not guarantees of future performance and are by their nature based on numerous assumptions. Although the FLS contained in this document are based upon what Purpose believes to be reasonable assumptions, Purpose cannot assure that actual results will be consistent with these FLS. The reader is cautioned to consider the FLS carefully and not to place undue reliance on the FLS. Unless required by applicable law, it is not undertaken, and specifically disclaimed, that there is any intention or obligation to update or revise FLS, whether as a result of new information, future events or otherwise.

The content of this document is for informational purposes only, and is not being provided in the context of an offering of any securities described herein, nor is it a recommendation or solicitation to buy, hold or sell any security. The information is not investment advice, nor is it tailored to the needs or circumstances of any investor. Information contained on this document is not, and under no circumstances is it to be construed as, an offering memorandum, prospectus, advertisement or public offering of securities. 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 and neither Purpose Investments Inc. nor is affiliates will be held liable for inaccuracies in the information presented.