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

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.

For further information please contact:

Keera Hara

Keera.Hart@kaiserpartners.com

905-580-1257