In exchange for a lump sum premium, Sun Life makes a monthly payment to the pension plan equal to the pension payments for the covered group. This includes retirees and deferred members. The plan continues to pay each member directly. An annuity buy-in is an investment of the plan that requires no top-up contribution from the plan sponsor and triggers no accounting settlement.1
What are the advantages of annuity buy-ins for plan sponsors?
Annuity buy-ins provide most of the same great benefits as annuity buy-outs, along with added flexibility for plan sponsors.
1Plan sponsors should confirm the need for an accounting treatment settlement with their own auditors
$5.2 billion in group annuity sales in 2019
112 annuity buy-in transactions sold in Canada, covering $9.3 billion of liabilities as of March 31, 2020