Canadian digital media and marketing company Yellow Pages Limited has purchased group annuity contracts from BMO Life Assurance Company that will facilitate the transfer of approximately $210m of its defined benefit pension plan obligations, and related assets for certain retirees and beneficiaries.
Under the agreement, BMO Insurance will issue annuities covering the responsibility for pension benefits of approximately 860 pensioners and beneficiaries of the company, which represents a significant portion of the company’s pension plan members and will begin administering all benefits to these members beginning October 2025. There will be no change to the pension benefits for any plan participants as a result of the transaction; following the transaction, benefits for transferred plan participants will be protected under Assuris, the life insurance compensation association designated under the Insurance Companies Act of Canada.
“We are pleased to have reached this agreement as it strengthens our balance sheet and lowers the risk from pension obligations, while allowing the pensioners and beneficiaries to receive equivalent pension benefits from BMO Insurance, a highly rated Canadian insurer with strong expertise in long-term management of retirement benefits. The company intends to reallocate the benefits of the reduced risk towards activities that will continue to “bend the revenue curve”” said David A. Eckert, CEO of Yellow Pages Limited.
Following the transaction, Yello Pages will have reduced its pension plan obligations by approximately 50 percent. The purchase of the group annuity contracts will be funded directly by assets of the pension plan, and the company also intends to voluntarily contribute an additional $4m to the pension plan by the end of June 2026, subject to review by its board of directors.
TELUS Health acted as advisor to the Yellow Pages in this transaction.
