TORONTO, March 3, 2015 /PRNewswire/ - Sun Life Financial Inc. (TSX/NYSE: SLF) and BCE Inc. (TSX/NYSE: BCE) today announced a new agreement that further advances BCE's pension de-risking strategy by transferring longevity risk for $5 billion of pension plan liability to Sun Life Assurance Company of Canada (Sun Life).
Under this new longevity insurance agreement, the first of its kind in North America, 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, 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 will reinsure a portion of the longevity risk to RGA Canada and SCOR Global Life.
About Sun Life Financial
Celebrating 150 years in 2015, Sun Life Financial is a leading international financial services organization providing a diverse range of protection and wealth products and services to individuals and corporate customers. Sun Life Financial and its partners have operations in key markets worldwide, including Canada, the United States, the United Kingdom, Ireland, Hong Kong, the Philippines, Japan, Indonesia, India, China, Australia, Singapore, Vietnam, Malaysia and Bermuda. As of December 31, 2014 the Sun Life Financial group of companies had total assets under management of $734 billion. For more information please visit www.sunlife.com
Sun Life Financial Inc. trades on the Toronto (TSX), New York (NYSE) and Philippine (PSE) stock exchanges under the ticker symbol SLF.
Note to editors: All figures in Canadian dollars.
SOURCE Sun Life Financial Inc.