We're writing to inform you about a situation relating to the DFS GIF – Growth – NEI Select that was announced by Northwest & Ethical Investments L.P. (NEI), the manager of the underlying fund. This guaranteed investment fund (GIF) is available via the Helios2, Helios and Millennia III contracts.
The manager proposes to merge the NEI Select Growth Portfolio into the NEI Select Growth RS Portfolio. The continuing fund has similar objectives and strategies, and it follows a responsible approach to investing. The merger would allow the manager greater portfolio diversification opportunities without altering the fundamental investment objectives of the DFS GIF – Growth – NEI Select.
The merger is subject to regulatory and unitholder approvals; unitholders will have the opportunity to vote on March 9, 2021. The manager's documentation indicates that, if approved, the merger will take effect around April 23, 2021.
Potential tax impact for contract owners with the DFS GIF – Growth – NEI Select
According to the notice of special meetings of unitholders, the merger would be tax-deferred. However, some securities in the underlying funds portfolio could be sold before the merger, resulting in capital gains or losses for unitholders. The DFS GIF – Growth – NEI Select has shares in the underlying funds of the DFS GIF NEI Select Growth, which are being merged. When units of the GIF are attributed to a non-registered contract, part of the capital gains or losses can be allocated to the unitholders. It's difficult to say exactly how much those gains or losses would be before the transaction is complete, though. There won't be any tax impact for registered contract owners (RRSP, RRIF, TFSA, LIRA, LIF, etc.).
Rest assured, we'll keep you posted of any developments and provide you with the necessary information as soon as it's available.
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