To evaluate the income policy, LifeWorks, formerly known as Morneau Shepell, conducted an independent review assessing its ability to provide a lifetime income for Canadian retirees. The results of that review, which present LifeWorks’ views on its intended potential to provide a steady income for life, with a high potential to grow over time, are now available.
The review concluded that, as drafted, the longevity income policy will adjust distribution levels appropriately, even under the worst-case model, to ensure that it is life-saving. is adequately funded to continue paying income for
“We have created this fund with the idea of achieving results similar to a defined-benefit scheme, but have democratized the solution so that it is accessible to all. The fund’s ambitious goal is to not only give life-long income to retirees but to provide monthly income that is designed to increase over time, which will help protect investors from inflation,” said Fraser Stark, president of Longevity.
Prior to Longvity’s launch on June 1 last year, Purpose also worked with LifeWorks to conduct an actuarial review of the fund.
The results of that work validated the underlying assumptions that the fund could offer an initial lifetime earnings rate of 6.15% for 65-year-old investors. It also reaffirmed that the fund’s risk pooling structure and conservative assumptions for determining initial rates would ensure an increase in distribution levels over time in most cases.
