Sun Life Financial Canada has announced that in 2018 it will introduce a new target date solution aimed at improving the retirement outcomes of group savings plan members. The insurer says this solution will be a first for the Canadian market.

The new solution, to be created in partnership with investment manager Dimensional Fund Advisors, will “focus members on a retirement income target, give them actionable choices to help close their income gap, and personalize their investment experience to reflect a broad range of factors beyond traditional considerations of just age and risk tolerance,” explained the company in an announcement July 5. It will also take into account salary levels, savings rates, accumulated savings, and other pensions and savings.

Well received in other markets

This “next-generation target date solution” has been well received in other markets, including the U.S., South Africa and Australia, says Sun Life.

"We're helping Canadians plan for a retirement income based on three key decisions: how much income is needed, how much can they save each pay period, and at what age they want to retire," said Thomas Reid, Senior Vice-President, Group Retirement Services, Sun Life Financial Canada. "This solution customizes the investments for the plan member, automatically adapting as their personal needs and circumstances change, and manages income risk as they approach retirement."