June 17, 2024
Plan sponsors are taking action
Many organizations in different industries are purchasing group annuities to transfer pension risk from their defined benefit (DB) pension plans to insurers. According to Sun Life estimates, over 500 DB plan sponsors have purchased group annuities in the past five years. Some of these pension risk transfer (PRT) transactions have been made public.
Table 1 – Organizations that have publicly disclosed one Canadian PRT transaction
Year disclosed |
Organization |
Amount transacted (approximate amount in $M – CAD unless otherwise noted) |
|---|---|---|
2025 |
Fraser Papers Inc. |
114 |
2025 |
Yellow Pages Limited |
210 |
2024 |
IBM Canada Ltd. |
1,500 |
2024 |
Foresters Financial |
Not disclosed |
2024 |
Ford of Canada |
923 |
2024 |
Bombardier Inc. |
635 USD |
2022 |
Weyerhaeuser Company |
420 USD |
2022 |
PPG Industries Inc. |
175 USD |
2020 |
Iron Ore Company of Canada (Rio Tinto) |
560 |
2020 |
General Motors of Canada Company |
1,800 |
2020 |
Corby Spirit and Wine Limited, and Hiram Walker & Sons Limited |
176 |
2019 |
Wabush Mines |
Not disclosed |
2019 |
Rayonier Advanced Materials |
293 |
2019 |
Navistar Canada ULC |
333 |
2017 |
Husky Energy |
195 |
2016 |
Loblaw Companies Limited |
350 |
2013 |
Canadian Wheat Board |
150 |
Note: Where possible, we have sought to refer to the period in which the transaction occurred. However, for transactions where this was not available, we have referred to the period in which the transaction was made public.
Repeat buyers: plan sponsors are expanding their partnerships with insurers
Many plan sponsors take a phased approach to de-risking which results in multiple transactions – making them a repeat buyer. According to Sun Life estimates, there have been around 100 repeat buyers the past five years.
Table 2 - Organizations that have publicly disclosed more than one Canadian PRT transaction
Organization |
Total transacted |
Details (years disclosed and approximate amounts in $M – CAD unless otherwise noted) |
|---|---|---|
Alcoa Corporation |
1,015+ |
2023: 315 2018: 700+ |
Domtar Corporation
|
495 |
2022: 135 2019: 360 |
Laurentian Bank of Canada |
410 |
2026: 60 2021: 350 |
Molson Coors Beverage Company |
185+ USD |
2023:185 USD 2018: undisclosed |
Montreal Port Authority |
150+ |
2018-2022: 4 transactions ($8M to $30M) 2017: 150 |
Ottawa International Airport Authority |
64 |
2022: 8 2020: 6 2018: 50 |
Stelco Inc. |
2,185 |
2022: 1,300 2019: 885 |
Supremex Inc. |
53 |
2020: 46 2018: 7 |
West Fraser Timber Co. Ltd. |
1,005 |
2023: 95 2022: 115 2021: 300 2018: 335 2018: 145 2017: 15 |
Note: Where possible, we have sought to refer to the period in which the transaction occurred. However, for transactions where this was not available, we have referred to the period in which the transaction was made public.
Read about organizations that have purchased group annuities multiple times to de-risk their plans and secure member pension benefits.
Client spotlight: Montreal Port Authority - repeat buy-ins
December 04, 2023
Client spotlight: West Fraser
October 26, 2023
Public longevity insurance transactions
In addition to purchasing group annuity contracts to de-risk a plan, some organizations have purchased longevity insurance.
- 2020: Co-operative Superannuation Society for $660M
- 2016: Canadian Bank Note Company Limited for $35M
- 2015: BCE Inc. for $5B
Learn more about longevity insurance.
Innovation drives the PRT market forward
Innovation in PRT continues to solve complex pension issues for plan sponsors. Working closely with sponsors and their consultants, we’ve successfully solved de-risking challenges including:
- Illiquid assets – creating premium payment schedules designed to fit the need of liquidating these assets.
- Deferred premium payments – enabling flexibility to secure the benefits of plan members immediately.
- Complex plan provisions – including portability requirements, complex indexation features and remarriage provisions.
In the news: Publicly announced PRT transactions with Sun Life
Read about recent transactions and how these organizations chose the right de-risking solution for their situation.
2025 Fraser Papers Inc.
$114 million Annuity buy-in
2024 Ford of Canada
$923 million Annuity buy-out
2020 General Motors
$1.8 billion Annuity buy-out
2020 Pernod Ricard
$176 million Annuity buy-in
2019 Rio Tinto
IOC $560 million Annuity buy-in
2019 Domtar
$461 million Annuity buy-out
Learn about the benefits of de-risking
Defined benefit pension plan sponsors face many challenges in Canada, sometimes threatening the retirement security of their members. The ever-changing environment leaves pension plans open to financial, political, and regulatory risks. De-risking your pension plan today can help mitigate the situation.
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