Risk reduction for Canadian Wheat Board's defined benefit pension plan
TORONTO, June 18, 2013 /CNW/ - Sun Life Assurance Company of Canada, a
wholly-owned subsidiary of Sun Life Financial Inc. (TSX/NYSE: SLF), has
signed a $150 million annuity policy with Canadian Wheat Board (CWB)
that transfers investment and longevity risk from CWB's defined benefit
pension plan to Sun Life Financial.
The agreement is unique in the Canadian market because it involves
pension income that grows with inflation as well as the innovative
"annuity buy-in" solution. In addition, Sun Life Financial provided the
investment management expertise to transition CWB's existing asset
portfolio to purchase the annuity policy.
"We're extremely pleased to partner with Canadian Wheat Board to provide
an annuity solution that is the first of its kind in Canada," said
Brent Simmons, Senior Managing Director, Defined Benefit Solutions, Sun
Life Financial. "It is a game-changing transaction for our industry,
and highlights our ability to provide competitive pricing for
inflation-linked annuities through superior investment management. Our
agreement is designed to provide long-term security to Canadian Wheat
Board's pension plan members."
"The deal is a 'win-win' for Canadian Wheat Board and its plan members,"
said Andrea Carlson, Vice-President, Corporate Finance & Strategy, CWB.
"Sun Life is now managing all of the market-related risks of our
pension plan through an annuity buy-in, providing an indexed solution
that others in the market told us couldn't be done. We selected Sun
Life because of their expertise in investing and managing risk, their
high credit rating and their reputation for innovation."
An annuity buy-in is an investment that a pension plan makes to transfer
investment and longevity risk to an insurance company, without any
impact on plan members' pensions. It increases benefit security by
allowing the pension plan to better match its assets and with the
pension promises it has made. This $150 million transaction is the
largest single day purchase of inflation-linked annuities in Canada,
and the largest single day purchase of a next generation annuity buy-in
CWB was advised by Steve Windsor of Aon Hewitt, as well as Scott
Sweatman and Mary Picard of Dentons Canada LLP. "Aon Hewitt guided
Canadian Wheat Board through the many complex decisions required for
securing pension plan obligations, and the annuity buy-in was the best
solution for Canadian Wheat Board," said Steve Windsor, Associate
Partner, Aon Hewitt.
About Defined Benefit Solutions
Sun Life Financial launched Defined Benefit Solutions in late 2008 to
help Canadian companies more effectively manage risks in their defined
benefit (DB) plans. Sun Life Financial provides a full suite of
de-risking products and services, including annuity buyouts, annuity
buy-ins, customized liability-driven investment portfolios and
longevity insurance. These solutions allow plan sponsors to mitigate DB
risk or transfer a portion of the DB risk from their balance sheet to
Sun Life Financial and take advantage of Sun Life Financial's
investment, asset-liability management and longevity expertise. Defined
Benefit Solutions sold the largest Canadian annuity buy-out of $400
million in 2011.
About Canadian Wheat Board
Canadian Wheat Board is one of the most experienced wheat and barley
marketers in the world. The Winnipeg-based organization has sold grain
to over 70 countries, based on a reputation for high-quality product,
reliable service and trusted international relationships. CWB offers a
range of marketing programs to Canadian farmers, including its popular
pool contracts, providing solid returns and significant risk-management
About Sun Life Financial
Sun Life Financial is a leading international financial services
organization providing a diverse range of protection and wealth
accumulation 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 March
31, 2013 the Sun Life Financial group of companies had total assets
under management of $571 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.
Annuities are issued by Sun Life Assurance Company of Canada, a member
of the Sun Life Financial group of companies. Sun Life Financial is the
leading provider of group annuities in Canada and has one of the
largest investment management teams in the country with $94 billion of
fixed income assets and 200 professionals worldwide as of December 31,
2012. The first Sun Life Financial annuity contract was issued in 1880.
Note to Editors: All figures in Canadian dollars.
SOURCE: Sun Life Financial Inc.
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Sun Life Financial