It absorbed relation to annually of discussions and negotiations; it had been incredibly innovative and looked as the very first available in Canada.
But if the was throughout two Canadian pension funds – whose names haven’t been disclosed – paid Sun Life Assurance Company of Canada a combined one-time premium of $530 million and transferred so-called investment, longevity and inflation risk for the insurance unit of Sun Life Financial Inc. Basically future funding from the promised benefits was offloaded to Sun Life.
At $530 million, Sun Life asserted the transaction produces the largest group annuity in Canadian history. In 2013, Sun Life says it completed an offer using the Canadian Wheat Board worth $150 million.
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Brent Simmons, senior md, defined benefit solutions at Sun Life Financial, said Tuesday following a deal was announced that generally the two pensions saved $20 million by going to the table together instead of approaching Sun Life individually. “We were thrilled to pass those savings on,” said Simmons, who noted the two pension funds had promised different but complimentary categories of benefits of their employees.
Simmons asserted one fund promised to boost benefits if inflation was little as another had promised to improve them when inflation was high. Simmons added the combined annuity purchase works for plans with indexing formulas that are associated with inflation but they’re different enough to become complementary.
To increase the risk for numbers work, Sun Life combined the annuity purchases for that two plans, while using pricing according to both purchases occurring simultaneously.
Under the arrangement, Sun Life could make the repayments for that two pension plans, which can make the promised payment for the retirees.
