February 05, 2003
Meritas Launches Four New SRI Funds for Canadian Group Pension Plans
by William Baue
A mainstream group pension plan provider in Canada contracted Meritas Financial to create and
manage four new SRI mutual funds for retirement plan investors.
Yesterday, Meritas Financial announced the
launch of four new socially responsible investment (SRI) mutual funds that will be available
through Group Retirement
Services, a division of Great-West Life Assurance
Company and London Life Insurance
Company. The funds include one balanced fund and three equity funds. Of the three equity
funds, one invests in the Canadian market, one in the U.S. market, and one in the global market.
Meritas was founded in April 2001 as a joint venture between the Mennonite Savings and Credit Union (Ontario) Limited, the Mennonite
Foundation of Canada, and Mennonite Mutual Aid.
"Group Retirement Services is one of
the leading providers of group pension plans in Canada," said Meritas CEO Gary Hawton. "If an
employer has a group pension plan through Group Retirement Services, for the first time ever, all
of their employees will have the opportunity to have a socially responsible option in their pension
The balanced fund allocates 40 percent of its assets to equities, and the
remaining 60 percent is divided among fixed income vehicles that include money markets, mortgages,
and bonds. The equity funds are modeled on Meritas's existing equity funds: the Meritas Jantzi
Social Index Fund, the Meritas U.S. Equity Fund, and the Meritas International Equity Fund.
All four new funds apply the same positive and negative screens that Meritas employs on all its
funds. Meritas's exclusionary screens encompass alcohol, tobacco, military, gambling, pornography,
and nuclear power production. Positive screens include environmental impact, aboriginal rights and
concerns, corporate governance issues, domestic and international human rights policies, and gender
equity, among others.
Meritas funds also commit up to two percent of the assets in all
their mutual funds to community investment in domestic and international community developments
initiatives (CDIs). As well, Meritas practices shareowner action, engaging companies in dialogue
to promote improved social, environmental, and ethical practices.
The four new SRI funds
allow pension fund investors to create portfolios that reflect their risk tolerance and investment
objectives. Conservative investors can fill their portfolio with the balanced fund to maintain the
60/40 split between fixed income and equities. More aggressive investors can increase the equity
component of their pension accounts by adding portions of the three equity funds to the balanced
fund or by investing exclusively in the equity funds.
"It's not just a matter of slapping
one fund on the shelf so that we can say we've got an SRI option," said Bill Kyle, vice president
of Group Retirement Services for Great-West and London Life.
Consumer demand prompted
Group Retirement Services to make this move into the SRI arena.
"We had had a number of
requests for SRI funds and in particular Meritas as a fund provider," Mr. Kyle told
Group Retirement Services's due diligence confirmed Meritas's strength as
an investment advisor and mutual fund manager. Likewise, Meritas's research deemed Great-West and
London Life to be socially responsible corporations.
The establishment of SRI options in
group pension plans bodes well for the growth of socially responsible investing in Canada.
"It brings SRI much more to the forefront in Canada, into the mainstream," said Mr. Hawton.
"SRI is a trend that we expect will grow over time, so these funds will position us well
for any future requests," added Mr. Kyle. "We'll monitor both the performance and the demand."