Purpose Investments Releases Longevity Pension Fund Income Policy on How the Fund Manages Income-for-Life Payments to Retirees
22 Feb 2022.
Purpose Investments Inc. (“Purpose”) is happy to announce that an independent review prepared by LifeWorks (formerly known as Morneau Shepell) that assesses the Longevity Pension Fund’s (“Longevity” or “the Fund”) ability to provide income for life to Canadian retirees is now available.
The Longevity Pension Fund is the world’s first income-for-life mutual fund to provide lifetime income to Canadian retirees. Before Purpose launched Longevity on June 1, 2021, the Toronto firm worked with LifeWorks, a leader in retirement consulting services, to conduct an Actuarial Review on the Fund. The results of that review validated Purpose’s underlying assumptions that the Fund could achieve initial lifetime income rates starting at 6.15% for 65-year-old investors, and that Longevity’s distribution levels should increase over time in the majority of cases as a result of the Fund’s risk pooling structure and the conservative assumptions used to set the initial rates.
“We created Longevity to solve one of the biggest social challenges we’re facing in Canada: income insecurity among retirees. To achieve this and fulfill our mission to empower retirees, we took time to design Longevity’s structure thoughtfully and precisely. Today, we are excited to share the third-party review by LifeWorks of our Fund’s income policy, which details how our community of investors will achieve income security so they can live the lives they aspire to in retirement,” said Som Seif, founder and CEO of Purpose Investments.
To demonstrate Longevity’s ability to carry out its objectives, Purpose developed an Income Policy statement to clarify how, when, and by how much distribution levels will be modified, based primarily on market returns and the rate at which investors exit the Fund over the years (either voluntarily or through death). LifeWorks was hired to review this Income Policy and provide its commentary on Purpose’s ability to meet the Fund’s objectives to provide income for life to investors and maintain stable income levels that have a high probability of increasing over time.
The review by LifeWorks of Longevity’s Income Policy shows that with the Policy as drafted, even under the worst-case scenarios modelled, the Fund would adjust the distribution levels to ensure it is adequately funded to continue to pay income for life.
“We built this Fund with the idea of achieving outcomes similar to a defined-benefit plan, but democratized the solution so that it’s accessible to everyone. The Fund’s ambitious goal is to not just give retirees income for life, but to provide monthly income that’s designed to increase over time, which would help insulate investors from inflation,” says Fraser Stark, President of Longevity. “We have more than just good intentions for the Fund—that’s why we had the experts at LifeWorks scrutinize the Fund’s structure prior to launch, and then examine our Income Policy to make sure the Longevity Pension Fund can truly do what we set out to do: redefine retirement with income for life.”
For more information on Longevity’s Income Policy and the LifeWorks Report on the Fund, please visit www.retirewithlongevity.com/fund/performance-distributions.
About Longevity Pension Fund
The Longevity Pension 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 redefine retirement with income for life, please visit https://www.retirewithlongevity.com/en.
About Purpose Investments
Purpose Investments is an asset management company with approximately $14 billion in assets under management. Purpose has an unrelenting focus on client-centric innovation, and offers a range of outcome-focused products. Purpose Investments is led by well-known entrepreneur Som Seif and is a division of Purpose Financial, an independent technology-driven financial services company. For more information, please visit www.purposeinvest.com.
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Income in the form of Fund distributions is not guaranteed, and the frequency and amount of distributions 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. You can always access the lesser of unpaid capital (initial value of your investment less any income payments made) or your net asset value. Fees may apply. Commissions, trailing commissions, management fees and expenses all may be associated with the Longevity Pension Fund. This communication is not investment advice, nor is it tailored to the needs or circumstances of any specific investor. Talk to your investment advisor to determine if the Longevity Pension Fund is suitable for you and always read the prospectus before investing. There can be no assurance that the full amount of your investment in a fund will be returned to you. Investments in the Fund are not guaranteed, investment values in the Fund change frequently and past performance may not be repeated.
Certain statements in this document 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 Investments believe to be reasonable assumptions, Purpose Investments 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.