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My latest MoneySense Retired Money column looks at several Longevity-oriented retirement income products available in Canada or the U.S. Click on the hypertext here for the full MoneySense column: In planning for Retirement, worry about Longevity rather than dying young.
The focus of the column is on the Purpose Longevity Pension Fund (LPF), which I recently initiated a small position in my personal RRIF.
It also touches on tontine products like Guardian Capital’s GuardPath Funds, as well as several longevity-oriented investment income funds recommended by some U.S. advisors and retirement experts. However, Guardian closed its GuardPath Funds a year ago and are effectively no longer a tontine pioneer.
That leaves LPF as the lead Longevity Fund pioneer in the Canadian market and to some extent the world. Fraser Stark, Global Business Leader for Toronto-based Purpose Investments Inc., says LPF has accumulated about $18 million since its launch almost five years ago, with roughly 500 investors in either the Accumulation or Decumulation classes.
As the MoneySense column summarizes, Purpose doesn’t use the precise term tontine to describe LPF but it does more or less aim to do what traditional Defined Benefit pensions do: in effect those who die earlier than expected end up subsidizing the lucky few who live longer than expected. LPF deals with the dreaded Inflation by gradually raising distribution levels over time. It recently announced it was boosting LPF distributions by 3% for most age cohorts in 2026.
Two classes of Purpose Longevity Pension Fund
Age is a big variable here. Purpose created two classes of the Fund: an “Accumulation” class for those under age 65, and a “Decumulation” class for those 65 or older. The latter promises monthly payments for life; at the same time the structure is flexible enough to allow for either redemptions or additional investments in the product; something that traditional life annuities do not usually provide. When moving from the Accumulation to the Decumulation product at age 65, the rollover is free of capital gains tax consequences.
The brochure describes six age cohorts, 1945 to 1947, 1948 to 1950 etc., ending in 1960. Yield for the oldest cohort as of September 2025 is listed as 8.81%, falling to 5.81% for the 1960 cohort. My own cohort of 1951-1953 has a yield of 7.24%.
How is this all achieved? Apart from the mortality credits, the capital is invested much like any broadly diversified Asset Allocation fund. As of Sept. 30, Purpose lists 38.65% in Fixed Income, 43.86% in Equities, 12.09% in Alternatives, and 4.59% in Cash or equivalents. Geographic breakdown is 54.27% Canada, 30.31% the United States, 10.84% International/Emerging and the same 4.59% in cash. MER for the Class F fund (which most of its investors are in) is 0.60%.
Canadian advisors supporting LPF
What do Canada’s financial advisors think about LPF in particular? John De Goey of Toronto-based Designed Securities has clients in it. Soon after its launch, he said he was a big supporter of the Purpose product … I think it is innovative and overdue. Accepting the usual disclaimer that everyone’s circumstances are unique and you should consult a qualified professional before buying, I was delighted when it was launched because longevity risk was one of the last ‘unsolved challenges’ of financial planning.” De Goey says Canadians “severely underestimate” how long they’re going to live. As for LPF, he says “Risk pooling in three-year cohort groups / pools is a big innovation and is only possible in a mutual fund structure.”
Matthew Ardrey, senior wealth advisor for Toronto-based TriDelta Financial, says LPF offers some interesting hybrid pension-plan-like features for average investors. They can start with a $500 minimum investment and “exchange their capital for a future stream of investment income: much in the same way one would with a traditional pension or an annuity.”
Ardrey sees LPF’s main drawback as liquidity. “An investor, if they wanted to redeem, would only get back the lower of the NAV and the unpaid capital, which is capital invested less income paid. This would also be the amount paid back upon [the] death of an investor. So the opportunity cost is the potential growth on those funds.”
Here’s the full list of wealth advisors and full-service brokers that offer LPF. Included are full-service brokerages (and/or their discount brokerage units) of the big banks, including Bank of Montreal, National Bank and recently Royal Bank on a non-solicited basis. Among many independents offering it are Questrade and Qtrade. In addition, Stark says iA Financial allows investments in LPF on a non-solicited basis.
American Longevity Income products
While I don’t see anything in the United States that is the same as LPF, a number of investment firms offer products that touch on Longevity one way or the other. On Findependence Hub, a recent blog summarized the major offerings of Longevity products cited by various retirement experts. The roundup of the major ones was supplied by by contacting various US and Canadian retirement experts through Featured.com and LinkedIn. It covers offerings like Vanguard Target Retirement Income Fund, Fidelity Strategic Advisors Core Income Fund, Stone Ridge LifeX Longevity Income ETFs, and others.
Ultimately, longevity-oriented income products are one meaningful solution for retirees betting on living longer than most. Those with traditional employer-sponsored Defined Benefit pension funds may be sufficiently covered off but the many who lack DB pensions may well want to investigate some combination of annuities, traditional diversified balanced ETFs and longevity-oriented products like the ones mentioned here.
As always, consulting with a Retirement or investment/tax expert is recommended.
This is a relatively small fund. Would you be worried that it may not survive? Thanks and great article.
As I commented to a similar query on X, Purpose doesn’t suggest putting ALL one’s assets in such a product: it can complement annuities, pensions and traditional investments. Personally, I’m comfortable putting 10% of my RRIF in LPIF for now anyway, possibly adding as time goes on: if only by reinvesting its distributions.