Manager and Investment Changes

The following communication was sent to members of the Western Pension Plans on January 20, 2021.

The last of the three future-dated changes noted in the announcement were completed as of November 30, 2021.

Further details on the changes, including rationale, timing and portfolio before/after examples can be found in the PDF document Update on changes to Western’s Diversified Equity Fund - November 2021.

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Subject: Manager and Investment Changes for the Western Pension Plans

Dear Pension Plan Members,

On behalf of the Joint Pension Board we are pleased to share updates regarding the asset mix of the Diversified Equity Fund. Many members of the Western Pension Plans are invested in the Diversified Equity Fund, either directly or as an underlying investment through the Balanced Growth or Balanced Income investment options. Changes to the portfolio are being made beginning later this month.

There is no action required by members - changes will be automatically implemented. However, if these changes do not align with your preferences, you may wish to revisit your investment options under the plan. No other investment fund options have changed.

The changes can be summarized as a move from dedicating investment strategies for a particular region to strategies delivered by global managers with a broader expertise in world markets, inclusive of Canada.

The Boards periodically undertake a comprehensive review of the Diversified Equity Fund, as it is the largest fund at $641 million in total with over 6,500 investors. Mercer Canada, a global investment consultant, provides research and works with Western staff to develop recommendations to the Joint Pension Board based on best practices, technical analysis, investment beliefs and in accordance with the investment policies. Mercer believes “unrewarded risk can be reduced by investing in the broadest universe possible. A global approach improves the fund’s expected risk-return profile and maximizes the opportunity set for managers seeking best-in-class companies, including those in Canada.”

Diversification remains a cornerstone of all the investment choices under the Western Plans, with an overall goal of maximizing returns while managing risk within each option. The strategy is being refined by using global investment managers who have a wider scope of investments to choose from, rather than being tied to a particular region (Canada, US, Non-North American). Our goal is to maximize returns for members while minimizing risk.

View details of the changes, including the rationale, timing, and portfolio before/after details.

All investment options for the Western plans are detailed in the Morningstar Fund Sheets available within your Sun Life plan member account. Login from mysunlife.ca/western or from the Western Pension login page and select Investment Performance. Funds sheets are updated following each quarter-end. The new asset mix is expected to be reflected on Morningstar in late Q1 or early Q2. Education sessions on the investment options will be presented in February and May as part of the ongoing member education opportunities.

If you have questions about how you are invested, contact Sun Life Financial at 1-866-733-8612. You can contact Western Human Resources using ASK HR.

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