Purpose unveils world’s first income-for-life mutual fund

June 1, 2021

“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,” said 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.”

While the Longevity Pension Fund can be held in regular account, a registered retirement plan, or a tax-free savings account, Stark said it can also be a useful solution for defined-contribution and group plans.

The fund will aim to provide a lifetime income payment of approximately 6.15% annually for individuals who are at least 65 years old, with the hope that payouts will increase significantly over time. Due to their shorter life expectancies, investors who are already well into their retirement years can get a higher initial distribution level in line with what those in the younger cohort could get as they reach those ages.

“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 said.

Over time, Purpose plans to release other retirement solutions to complement the Longevity Pension Fund as part of a new holistic retirement solutions platform.