2014 PUBLIC ACCOUNTABILITY

2014

PUBLIC

ACCOUNTABILITY

2014

PUBLIC

ACCOUNTABILITY

S T A T E M E N T

Community Development and Philanthropic Activity 1

Employees and Advisors 14

Taxes Paid 16

Debt Financing 17

At Sun Life, we are committed to building sustainable, healthier communities and we’re proud to hold the Caring Company designation from Imagine Canada. The Caring Company program recognizes community investment leaders and demonstrates our commitment to Canada’s charitable sector. As a Caring Company, we commit a minimum of one per cent of our pre-tax profit to community

organizations annually.

This report is filed as the consolidated Public Accountability Statement (PAS) for Sun Life Financial Inc., Sun Life Assurance Company of Canada and Sun Life Insurance (Canada) Limited, pursuant to the PAS regulations of the Canadian federal government (Insurance Companies Act (Canada), section 489.1(1)). It contains information regarding our subsidiaries and joint ventures, including Sun Life Financial Trust Inc., and pertains to our most recent fiscal year (January 1, 2014 to December 31, 2014). Unless otherwise noted, all dollar amounts are expressed in Canadian currency. In this document, unless the context requires otherwise, references to “we,” “our,” “us,” “the Company,” “Sun Life,” and “Sun Life Financial” mean Sun Life Financial Inc., its subsidiaries, and in respect of “Employees and Advisors,” its joint ventures.

C O M M U N I T Y D E V E L O P M E N T

A N D P H I L A N T H R O P I C A C T I V I T Y

With 2015 marking our 150th anniversary, we can confidently say we’re committed to the goal of building sustainable, healthier communities where we live and work. Our success depends on the well-being of the communities we serve, and we believe we play a role in their development and sustainability. Our support focuses on four key areas: health, with an emphasis on diabetes; arts and culture; education; and social services. In 2014, Sun Life committed a total of $10.6 million in charitable donations to community organizations across Canada, the U.S., Asia and Europe.

In Canada, our corporate donations supporting community organizations coast to coast totalled $8 million during 2014, and a further $353,499 was allocated to sponsorships of cultural and community initiatives. Here are a few examples of our 2014 donations and sponsorships and goals in the area of community development that align with our priorities.

1 _{Canadian Diabetes Association - diabetes.ca}

H E A LT H

Our health is in our hands – fighting diabetes one step at a time

Since we announced our commitment to diabetes in 2012, we’ve focused our support on diabetes awareness, prevention, care and research, with over $11 million committed to date. It is estimated that one in three Canadians will be affected by the disease by 20201_.

The good news is, it’s not too late to make a positive change, and that’s why Sun Life is committed to slowing the advance of diabetes and its related complications by aiming to improve the health and wellness of our customers, employees and the community.

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MAPLE LEAF SPORTS & ENTERTAINMENT FOUNDATION CANADIAN NATIONAL INSTITUTE FOR THE BLIND HOSPITAL FOR SICK CHILDREN ONTARIO SCIENCE CENTRE YMCA OF GREATER TORONTO PROVIDENCE HEALTHCARE FOUNDATION GRAND RIVER HOSPITAL DIXON HALL KINGSTON GENERAL HOSPITAL ROYAL OTTAWA FOUNDATION FOR MENTAL HEALTH OAKVILLE HOSPITAL FOUNDATION DIABÈTE DRUMMOND INC. DIABETES QUEBEC SHERBROOKE HOSPITAL ST. JUSTINE HOSPITAL FOUNDATION DIABETIC CHILDREN’S FOUNDATION MONTREAL DIABETES RESEARCH CENTRE (MDRC) QUEBEC

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In 2014, we supported a number of diabetes-related causes:

Canadian Diabetes Association – Don’t Be Risky

Sun Life provided $250,000 in support of the Canadian Diabetes Association’s Don’t Be Risky campaign. The campaign encouraged Canadians to identify their risk of developing Type 2 diabetes and get screened through the CANRISK online assessment. The Don’t Be Risky campaign was not only aimed at helping to raise awareness of Type 2 diabetes prevention, but also aimed at helping to ensure that Canadians were equipped with tools to improve their health and prevent serious diabetes-related complications. Over 40,000 Canadians took action by completing the online questionnaire.

JDRF (Juvenile Diabetes Research Foundation)

Every step counts and we challenged ourselves to take three million steps together for JDRF. With over 650 Sun Life employees and advisors across Canada we “stepped up” to further this goal through the Telus Walk to Cure Diabetes in 2014. Sun Life has committed to a three-year, $375,000 sponsorship of this national initiative. With the help of our Sun Life family, we contributed an additional $65,000 through our Teams for Health program.

As part of our commitment to raising awareness and funds for the prevention of diabetes, we teamed up with the Canadian Football League (CFL) for our second year of the Sun Life Financial Kick Diabetes program benefitting JDRF. We called on Canadians and CFL fans to take part and we donated $1 every time there was a tweet or retweet of #SunLifeKickDiabetes during the 2014 CFL season. Sun Life

employees, CFL players and Canadians across the country tweeted up a storm, generating over 65,000 tweets and Sun Life’s donation of $65,218 directly supports JDRF in their effort to fund preventative research. An additional donation of $34,782 was made as part of the field goal component for the Kick Diabetes program. For every successful field goal scored throughout the CFL regular season, $102 was donated to the JDRF affiliate in the region representing each CFL team, in honour of the 102nd Grey Cup Championship Game.

MLSE Foundation – Sun Life Financial Helping Buds

Sun Life provided the MLSE Foundation with funding of $50,000 for the Sun Life Financial Helping Buds program, which supports our commitment to the prevention of Type 2 diabetes. The program enables kids in low income neighbourhoods at risk of developing Type 2 diabetes to get active and experience the fun and excitement of playing hockey. Helping Buds introduced hockey to approximately 80 new Canadian girls and boys at no cost. In teaching hockey to youth, the goal was to help develop life skills such as teamwork, self-confidence and respect. Additionally, the initiative helped to provide programs such as academic tutoring and teaching healthy eating with the goal of preventing diabetes in an at-risk population.

Diabetic Children’s Foundation

Through Sun Life’s initiative with the Montreal Canadiens hockey club, during the month of November 2014 we donated $20,000 to the Diabetic Children’s Foundation - $1,000 for every goal the Montreal Canadiens scored at home and $1 for every tweet, retweet or share using the #monactiondiabète hashtag.

Hope Air

Sun Life committed $139,150 to Hope Air to support diabetes patients across Canada. Hope Air has been arranging free flights to get financially-disadvantaged Canadians to the healthcare they need since 1986. They are the only registered, national charity that provides free flights to people who cannot afford the cost of an airline ticket to get to medical expertise or specialized medical technologies that usually exist only in larger urban centres.

CHU Sainte-Justine Foundation

Since 2013, Sun Life has donated $625,000 to the CHU Sainte-Justine Foundation to broaden the CIRCUIT program, which promotes healthy lifestyles for young people at risk of developing cardiovascular disease and Type 2 diabetes. In 2014, we committed $125,000 to the Foundation. This donation is expected to assist more than 200,000 families in Quebec over the coming years.

America Gets Cooking to Stop Diabetes

In the U.S., we committed US$150,000 as the presenting sponsor of the American Diabetes Association’s® (ADA) America Gets CookingSM _{to Stop Diabetes® — a campaign}

that focused on teaching and inspiring the public to get active and cook healthier by providing practical, hands-on tips for preparing “good-for-you dishes.” As part of the campaign, the ADA asked the public to vote online each week for their favourite seasonal foods and flavours. The winning picks inspired a special healthy-holiday meal, which was unveiled in a cooking video featuring award-winning cookbook author Robyn Webb, MS, LN. The program also included special events in various local ADA markets.

Sun Life Malaysia’s Brighter You Program

In Malaysia, a donation of $99,238 was made to Diabetes Malaysia as part of Sun Life Malaysia’s Brighter You program, an initiative which was commenced in 2014. Brighter You provides adults with Type 2 diabetes and children with Type 1 diabetes with quarterly supply kits to assist in monitoring their blood glucose levels. The kits include blood glucose test strips to collect blood samples, needles to administer insulin, lancets to obtain blood samples and alcohol swabs. Sun Life Malaysia’s Brighter You program also sponsored glucometers and free diabetes tests to Hope Worldwide Malaysia, a non-profit, non-religious organization serving the underprivileged and disadvantaged communities, and organized regular “health talks” and basketball clinics to promote healthy lifestyles towards the goal of Type 2 diabetes prevention. Other health initiatives:

IWK Health Centre Mental Health and High School

Curriculum Guide

Sun Life committed $375,000 over a two-year period starting in 2013, to support the Mental Health and High School Curriculum Guide. Dr. Stanley Kutcher, the Sun Life Financial Chair in Adolescent Mental Health (a collaboration between Sun Life, Dalhousie University, IWK Health Centre, and the community in Halifax, Canada), developed the guide in collaboration with the Canadian Mental Health Association. This guide consists of a teacher self-study module and six modules designed to be implemented by educators into their classroom programming. These modules cover key areas designed to help students with mental-health literacy.

Canadian Red Cross –

Sun Life Financial International Response Fund

Sun Life donated $100,000 to support Ebola relief efforts for those affected by the deadly virus in West Africa through the Sun Life Financial International Response Fund at the Canadian Red Cross. The fund helps provide emergency relief to large-scale international crises, aimed to facilitate deployment of support to this crisis. This support included building a treatment centre, mobilizing aid workers, caring for the deceased so families could safely bury them, monitoring for infection to help prevent the spread of the virus and helping to educate those in affected areas.

A RT S A N D C U LT U R E

Making the Arts More Accessible™ Program

Sun Life believes that the arts should be available for everyone to experience, regardless of their means – a focus we formalized through our award-winning Making the Arts More Accessible program, established in 2004. In 2014, we donated over $1.4 million through this program to help Canadians access a range of cultural events, performances, concerts and visual attractions that might have otherwise been out of reach, for financial or other reasons.

Sarah McLachlan School of Music

Sun Life entered into an exciting initiative with the Sarah McLachlan School of Music in Vancouver. The School’s vision is to help enrich the lives of at-risk and underserved children and youth by providing top quality music instruction at no cost. Our support of $300,000 over the next three years is one of our largest donations to date under our Making the Arts More Accessible program. This donation is part of a larger vision to support music education schools across the country so that at-risk and underserved children and youth may enrol, at no cost or in a heavily subsidized program, and experience the positive, life-changing benefits of music education. In 2014, Sun Life also donated $25,000 to The Legacy Children’s Foundation’s Gift of Music program in Calgary, $30,000 to the Regent Park School of Music which supports eight neighbourhoods in Toronto, and $35,000 to the New Brunswick Youth Orchestra’s Sistema NB music education program.

Culture Days

Sun Life committed $135,000 to support Culture Days’ fifth anniversary weekend as a National Sponsor and engage Canadians through the Sun Life Financial Express Your Creativity Contest. Culture Days is a collaborative, national volunteer movement to raise the awareness, accessibility, participation and engagement of people from all regions of Canada in the artistic and cultural life of their communities. In 2014, an estimated 2 million people (an increase of 8 per cent over 2013) participated in 7,643 free activities in 873 cities and towns during the Culture Days weekend. In Quebec, Sun Life contributed an additional $50,000 to Les journées de la culture in support of les Choix Famille Financière Sun Life program, with 100 activities that helped families to discover and enjoy culture in all of its forms.

Grand Rire de Québec

Sun Life teamed up with le Grand Rire de Québec, a local street art festival in Quebec City. Through a donation by Sun Life of $35,000 the Espace Financière Sun Life provided families with a festive, family-friendly atmosphere and lineup of events, including acrobats, street artists and magicians.

Kitchener-Waterloo Art Gallery

Sun Life provided $30,000 in financial support to the Kitchener-Waterloo Art Gallery to be the Free Admissions sponsor. One of the gallery’s goals is to ensure that direct, personal experience of the visual arts is fully accessible and open to everyone. Sun Life has supported this goal since 2009. As one of the largest employers in the region, Sun Life has a reputation as a caring community partner with strong philanthropic and sponsorship ties to many organizations in Kitchener and Waterloo.

E D U C AT I O N

Canadian Council for Aboriginal Business

In 2014, Sun Life made a donation of $25,000 to fund eight scholarships and two bursaries through the Foundation for the Advancement of Aboriginal Youth, a national scholarship and bursary program to assist Aboriginal high school and post-secondary students most in need of financial support.

Canadian Mathematical Society

In 2014, Sun Life provided $35,000 to the Canadian Mathematical Society; the final instalment on our five-year commitment of $175,000. The Canadian Mathematical Society is a professional organization that promotes the importance of mathematics at all scholastic levels. Each year, the society organizes the Sun Life Financial Canadian Open Mathematics Challenge, inviting contestants from across the country.

The competition results in approximately 80 finalists from 50 schools qualifying to participate in the Sun Life Financial Canadian Mathematics Olympiad. Mathematics is at the core of our business and our support for the Society dates back to 1947.

Sun Life Rising Star Awards Program

The Sun Life Rising Star Awards program in the U.S. supports students and nonprofit organizations that are committed to building a stronger future through education. Since 2010, Sun Life has invested nearly US$5 million in grants, scholarships and other resources in the program. In 2014, Sun Life teamed up with two franchises to further this program: the Miami Dolphins Foundation to bring the Sun Life Rising Star Awards program to the South Florida region, and the Boston Celtics, whose partnership throughout the 2014–2015 season brings additional support to Sun Life’s philanthropic initiatives, including the Sun Life Rising Star Awards.

CARE for the Nation

In Indonesia, Sun Life extended its involvement with CARE for the Nation, as part of its goal to help young people build financial literacy skills. CARE for the Nation teaches students life skills needed to become successful young entrepreneurs, including training that helps them focus on creating their own business plans and acquire marketing and other essential skills to start and successfully manage a micro business. In 2014, the program was conducted in Lampung, Palembang and Bandung, successfully training approximately 4,500 vocational school students aged 16 to 18. Sun Life facilitated the financial literacy training and provided seed money for participants to start their own micro businesses.

S O C I A L S E RV I C E S

United Way

A long-standing supporter of the United Way across Canada, Sun Life encourages employees and advisors in all of our offices to organize local campaigns in their communities and matches each employee’s individual donation up to $500. In 2014, our employees and advisors raised $1,122,637 in support of United Way agencies across Canada. An additional $669,698 was matched by Sun Life, for a total combined donation of $1,792,335. For the 12th consecutive year Sun Life has received the United Way’s Thanks a Million Award in recognition of our efforts of generating more than a million dollars in donations during the year.

S U N L I F E ’S S U P P O RT O F

OT H E R C A U S E S I N 2 0 1 4

Sun Life’s Brighter Life Community Programme

Sun Life’s Brighter Life Community Programme in the U.K. funds charity and community groups across Hampshire and Gloucestershire, focusing on health, education, and arts and cultural projects. In 2014, approximately $167,000 was donated to over 40 organizations in the area, funding various initiatives such as dental healthcare, skill development days for young people, and healthy eating and physical activity projects for children.

120 Classrooms for 120 Years

Sun Life teamed up with Children’s Hour to celebrate 120 years of business in the Philippines by building 120 classrooms in the most heavily stricken areas hit by the Bohol earthquake and super typhoon “Yolanda” (known internationally as super typhoon Haiyan) in late 2013. The first 20 classrooms constructed in 2014 helped to rebuild those communities hardest hit by these tragedies. It is anticipated that Sun Life’s donation of PHP80 million will be felt well into the future and that the classrooms will help to serve both current and future generations.

E M P LOY E E CO N T R I B U T I O N S

We are extremely proud of our employee and advisor volunteers who work hard to make life brighter for others in their communities. In Canada, during 2014, they volunteered thousands of hours to the benefit of charities and organizations, efforts that were echoed by volunteering activities throughout our international operations. In addition, some of our employees and advisors make personal donations to their favourite charities.

In support of employee giving, Sun Life’s Matching Gifts Program matches eligible donations to registered charities up to $500 per employee or advisor.

2014 # E M P LOY E E CO N T R I B U T I O N S 1,424 E M P LOY E E CO N T R I B U T I O N S $396,037 CO M PA N Y M ATC H $240,619 TOTA L CO M B I N E D D O N AT I O N $636,656 # R E G I ST E R E D C H A R I T I E S S U P P O RT E D 503

S U N L I F E A S S U R A N C E C O M PA N Y O F C A N A D A

E M P L OY E E C O N T R I B U T I O N S

Canada

O U R VO L U N T E E R P RO G R A M

Sun Life’s volunteer program in Canada recognizes the efforts of employees and advisors who volunteer at least 50 hours each year for a registered charity or humanitarian cause. Those who qualify receive a $500 cheque for the charity of their choice. In 2014, our employees and advisors volunteered over 41,000 hours of their personal time to 236 local charities and organizations.

Each year, we also identify a National Volunteer of the Year and three finalists whose charities received cheques totaling $19,000, recognizing the efforts of each employee to support their charity. In 2014, we were proud to recognize Rahim Bhatia as our National Volunteer of the Year, along with three finalists, Walter Ferguson, Luc Leclerc and Andrew Wilkin. These employees have contributed greatly to their communities by donating time and effort to local charities.

V O L U N T E E R H I G H L I G H T S

Sun Life’s Teams for Health

Sun Life’s Teams for Health program was created to encourage and support employees and advisors who participate in walks, runs, rides or sports activities to raise money for health-related charities in Canada. Sun Life pays the registration fee or minimum personal donation required to participate in the event up to a maximum of $100 per person. Teams must be made up of at least six people, half of which must be Sun Life advisors or employees. In 2014, approximately 1,700 employees and advisors participated in Teams for Health.

Pan-Mass Challenge

A team of 90 riders from our Boston-based MFS Investment Management (MFS) business joined forces to raise US$602,777 for the Dana-Farber Cancer Institute through the Pan-Mass Challenge. MFS has been involved with the annual ride for 16 years and has raised almost US$8.5 million for cancer research during this time.

Sun Life Shining Action

Sun Life Shining Action, a volunteer team at Sun Life’s Hong Kong offices, has been helping the primary students at the Fresh Fish Traders’ School with basic needs. In 2014, the team organized the annual food donation campaign, gathering 146 packs of rice, 11 cartons of non-perishable food items and supermarket coupons valued at approximately HK$25,000. In addition, Sun Life donated nine iPads to the school, giving students the opportunity to use new technology.

E M P L OY E E S A N D A D V I S O R S

Full-time Part-time Total

A L B E RTA 439 9 448 B R I T I S H CO L U M B I A 172 3 175 M A N I TO B A 17 0 17 N E W B R U N S W I C K 15 1 16 N E W F O U N D L A N D A N D L A B R A D O R 6 0 6 N OVA S COT I A 50 1 51 O N TA R I O 6,057 127 6,184 P R I N C E E DWA R D I S L A N D 1 0 1 Q U E B E C 1,670 51 1,721 S A S K ATC H E WA N 13 1 14 Total 8,440 193 8,633

Employees in Canada

Sun Life Financial employs more than 27,000 people around the world. In 2014, we paid $2.6 billion in salaries and benefits to employees worldwide.

A U ST R A L I A 20 B E R M U DA 55 C H I N A 1,794 E U RO P E - OT H E R 20 H O N G KO N G 700 I N D I A 9,445 I N D O N E S I A 457 I R E L A N D 310 J A PA N 30 M A L AYS I A 456 P H I L I P P I N E S 1,568 S I N G A P O R E 25 S O U T H A M E R I C A 15 U N I T E D K I N G D O M 230 U N I T E D STAT E S3 _3,795 V I E T N A M 249 Total 19,169 C A N A DA 3,930 C H I N A 1,000 H O N G KO N G 1,655 I N D I A 85,725 I N D O N E S I A 8,320 P H I L I P P I N E S 7,290 V I E T N A M 1,845 Total 109,765

Employees around the world

Advisors in Canada and around the world

Sun Life and our joint ventures have a worldwide network of close to 110,000 advisors who sell the company’s and its join ventures’ many products and services. This network consists of career sales force and independent advisors and managers, focused on helping customers achieve their financial goals.

1 _{As of December 31, 2014.}

2 _{Includes 11,525 employed by our Asia joint ventures.}

Type of tax Income taxes* Premium taxes and investment income taxes Total other taxes** _Total F E D E R A L 130,809 27,228 48,511 206,548 A L B E RTA 6,938 14,367 20,585 41,890 B R I T I S H CO L U M B I A 10,241 19,150 14,182 43,573 M A N I TO B A 1,934 3,449 544 5,927 N E W B R U N S W I C K 2,051 3,606 853 6,510 N E W F O U N D L A N D A N D L A B R A D O R 1,280 1,947 462 3,689 N O RT H W E ST T E R R I TO R I E S 59 92 0 151 N OVA S COT I A 3,742 3,081 1,838 8,661 O N TA R I O 54,546 57,907 75,003 187,456 P R I N C E E DWA R D I S L A N D 678 904 243 1,825 Q U E B E C 17,316 29,588 33,263 80,167 S A S K ATC H E WA N 2,303 4,011 148 6,462 Y U KO N 122 148 0 270 Total 232,019 165,478 195,632 593,129

The taxes we pay in Canada and around the world are another measure of the way Sun Life contributes to the economies and societies in which we live, work and do business.

In 2014, in all jurisdictions where we operate, taxes paid or payable to governments totalled $883 million. Of this total, $322 million was paid or payable in income taxes, $227 million in premium taxes and investment income taxes and $334 million in excise, property, payroll and other taxes. In Canada, our total tax paid or payable amounted to $593 million.

TA X E S PA I D

Sun Life Financial Inc.’s 2014 Consolidated Tax Expenses

(in thousands of dollars)

D E BT F I N A N C I N G

as of December 31, 2014

$500,000-

$999,999 $1,000,000-$4,999,999 $5,000,000+ Total

ALBERTA Authorized amount* 441 15,342 499,468 515,251

Number of clients 1 6 22 29

BRITISH COLUMBIA

Authorized amount* 1,713 35,921 681,154 718,788

Number of clients 2 11 24 37

MANITOBA Authorized amount* - - 31,005 31,005

Number of clients - - 2 2 NEW BRUNSWICK Authorized amount* - 1,240 18,000 19,240 Number of clients - 1 1 2 NEWFOUNDLAND AND LABRADOR Authorized amount* - 2,350 35,000 37,350 Number of clients - 1 2 3

NOVA SCOTIA Authorized amount* - 4,986 79,164 84,150

Number of clients - 1 6 7

ONTARIO Authorized amount* 669 18,582 2,392,753 2,412,004

Number of clients 1 7 75 83

PEI Authorized amount* 585 - - 585

Number of clients 1 - - 1

QUEBEC Authorized amount* - 10,863 201,041 211,904

Number of clients - 3 7 10

SASKATCHEWAN Authorized amount* - - 59,950 59,950

Number of clients - - 3 3

Total Authorized amount* 3,408 89,284 3,997,535 4,090,227

Sun Life is committed to making debt financing available to businesses across Canada. In 2014, authorized debt financing totaled approximately $4 billion.

Massachusetts Financial Services Company PT. Sun Life Financial Indonesia

Sun Life Assurance Company of Canada

Sun Life Assurance Company of Canada (U.K.) Limited Sun Life Financial Trust Inc.

Sun Life Global Investments (Canada) Inc. Sun Life Hong Kong Limited

Sun Life Insurance (Canada) Limited Sun Life Investment Management Inc. Sun Life of Canada (Philippines), Inc.

P R I N C I PA L S U B S I D I A R I E S

Sun Life Financial Inc. as of December 31, 2014