MFS Chair Pozen Calls on Congress to Supplement Social Security with Private Retirement Plan Incentives

Business Wire, March 10, 2004

Business Editors

WASHINGTON--(BUSINESS WIRE)--March 10, 2004

MFS Chair Testifies on Social Security Before Congressional

Joint Economic Committee

With personal savings rates low and concerns growing about Social Security's solvency, Americans need incentives to invest in private savings plans, said Robert C. Pozen, non-executive chairman of MFS Investment Management, in testimony today before the Congressional Joint Economic Committee.

"If we are to grow our economy at a satisfactory rate and ensure that Americans have sufficient income during retirement, we need to encourage people to save more," said Pozen, a former member of President Bush's Commission to Strengthen Social Security. "Social Security should be viewed as providing a floor of defined retirement benefits, which are supplemented by private retirement plans. We need to encourage saving in these private retirement plans through tax credits and other incentives."

Pozen endorsed a series of steps to promote private savings and ensure that Americans have secure retirements:

-- Strengthen the federal income tax credit for contributions to

Individual Retirement Accounts and other tax deferred

retirement plans by making the credit refundable for

households with incomes below $50,000. These households pay

little or no federal tax, and rarely benefit from the existing

tax credit. A refundable tax credit for families with incomes

below $50,000 would increase savings while costing less than

$1 billion per year for the next decade.

-- Require employers that do not offer any type of retirement

plan to send 1 percent of each employee's wages to a new

"ULTRA-SIMPLE" retirement account, unless the employee opts

out. This builds on the existing SIMPLE retirement plan

concept for small businesses. The savings would be invested in

a money market fund or the equivalent operated by a qualified

financial institution, unless the employee makes a different

choice.

-- Bolster Social Security's finances by gradually introducing

price indexing of initial benefits for middle and high-wage

workers while maintaining wage indexing for low-wage workers.

Since wages rise about 1.1 percent faster than prices, this

proposal would reduce Social Security's long-term deficit by

almost 70 percent.

Pozen noted that the proposal for adjusting wage and price indexing would change the mix of retirement benefits, with those earning $25,000 or less - the lowest 30 percent of retiring workers - receiving most of their income from Social Security and higher earners receiving progressively greater proportions of their income from private retirement savings.

About MFS Investment Management

MFS is a premier global money management firm with investment offices in Boston, London, Mexico City, Tokyo and Singapore. The firm's history dates back to March 21, 1924, and the establishment of the first "open-end" mutual fund. Today, MFS manages $140 billion in assets on behalf of 6 million investors worldwide (as of December 31, 2003). MFS is a majority-owned subsidiary of Sun Life Financial Inc. (NYSE, TSX: SLF).

About Sun Life Financial Inc.

Sun Life Financial Inc. is a leading international financial services organization providing a diverse range of wealth accumulation and protection products and services to individuals and corporate customers. Tracing its roots back to 1865, Sun Life Financial and its partners today have operations in key markets worldwide including Canada, the United States, the United Kingdom, Hong Kong, the Philippines, Japan, Indonesia, India, China and Bermuda. As of December 31, 2003, the Sun Life Financial group of companies had total assets under management of C$359 billion. Sun Life Financial Inc. trades on the Toronto (TSX), New York (NYSE) and Philippine (PSE) stock exchanges under ticker symbol SLF.