Semi-Portability From November: Sun Life Sees Slow Start, No Price War

This article is a rewrite of a report from October 2012.

Semi-portability — the Employee Choice Arrangement — launches on November 1, and the first MPF comparison most members will run is whether to switch at all. Sun Life Financial expects a slow start: most employees will watch and wait rather than move en masse in the first six months, and trustees will hold their fire on deep price cuts.

Why so relaxed?

Wait and see. Sun Life’s retirement and group insurance senior vice-president said that once competition opens next month, contributors would rather survey offers across providers before deciding. The MPFA, citing Australian experience, expects about 10% of employees — over 230,000 of 2.35 million — to switch initially, but most will bide their time.

What is Sun Life’s edge?

Performance, not price. The executive outlined three plays: keep funds beating the peer median by 1–2 percentage points (a better deal for members than a 0.1–0.2 point fee cut); lift all 14 MPF funds into the top half rather than relying on one star; and upgrade the digital platform — its wholly owned administrator’s online fund-performance hub already drew 200+ daily visits.

What is “auto-navigation”?

Age-based equity-bond rebalancing. Sun Life’s auto-navigation system adjusts each member’s equity-bond mix by age to cut risk. With over 170,000 clients — more than 100,000 of them preserved accounts (to be renamed personal accounts in November) — over 10,000 members already used the system.

What is the lesson from 2012?

The opening shot was service, not price. At semi-portability’s 2012 launch, the expected price war never materialised; the big players competed on performance, platforms and automation instead. For members the takeaway stands: use the new choice, compare trustees on service and track record, and shop around.