Sun Life Financial Inc. and BCE Inc. have reached an agreement under which BCE will transfer longevity risk for $5 billion of pension plan liability to Sun Life Assurance Company of Canada.
Under the agreement, the Bell Canada Pension Plan will pay monthly premiums to Sun Life and in exchange Sun Life will make monthly pension payments into the plan for the lifetime of existing pensioners. BCE maintains full responsibility for the Bell pension plan and related payments to pensioners. Canada's largest communications company, BCE currently provides both defined benefit and defined contribution pension plans.
“Our agreement with Sun Life is another prudent step that BCE is taking to provide greater protection and improved security for Bell Canada pensioners,” said Siim Vanaselja, chief financial officer for BCE and Bell Canada. “This agreement is an innovative way to de-risk pension obligations by taking proactive measures to guard against longevity risk without the requirement for additional cash contributions.”
“Sun Life is thrilled to have been chosen by Bell to provide this important solution for their defined benefit pension plan,” said Kevin Dougherty, president of Sun Life Financial Canada. “With our expertise in assessing and managing the financial risks that can impact defined benefit plans, Sun Life is perfectly positioned to help BCE and other Canadian companies take longevity risk off the table so they can focus even more on their core businesses.”
Sun Life said that it will reinsure a portion of the longevity risk to RGA Canada and SCOR Global Life.
Victoria Spears
Victoria Prussen Spears is senior vice president of Meyerowitz Communications Inc., a law firm marketing communications consulting company. A graduate of Sarah Lawrence College and Brooklyn Law School, Ms. Spears was an attorney at a leading New York City law firm before joining Meyerowitz Communications. She may be contacted at [email protected].