- Laurentian Bank (LB) has purchased group annuity contracts to lower the risk in its pension plans
- The bank purchased the contracts from a Canadian insurer transferring C$350 million from its registered defined benefit pension plans
- The insurer will issue annuities covering pension benefits for 1,900 Laurentian Bank pensioners and beneficiaries
- As a result of the transaction, the bank reduced its registered pension plans’ benefit obligations by approximately 60 per cent
- Laurentian Bank is a diversified financial services provider focused on improving its customers’ financial health
- Laurentian Bank (LB) is down by 0.62 per cent and is currently trading at $43.35 per share
Laurentian Bank (LB) has purchased group annuity contracts to lower the risk in its pension plans.
The bank purchased the contracts from a Canadian insurer transferring approximately C$350 million in obligations, and related assets, from its three registered defined benefit pension plans.
Under the agreement, the insurer will issue annuities covering pension benefits for approximately 1,900 Laurentian Bank pensioners and beneficiaries, and will begin administering benefits to these members beginning October 2021.
As a result of the transaction, the bank reduced its registered pension plans’ benefit obligations by approximately 60 per cent.
The bank expects to recognize a net settlement gain of approximately $5 million in Q3 2021 thanks to its prudent management of the pension fund.
Following the transaction, benefits for plan participants will be protected under Assuris.
Obligations related to pension benefits for active plan participants remain with the bank and will remain unchanged.
Yvan Deschamps, Laurentian’s Executive Vice President and Chief Financial Officer, commented,
“We are pleased to have reached this agreement as it strengthens our balance sheet, lowers the risk from pension obligations, while allowing the pensioners and beneficiaries to receive equivalent pension benefits from a highly rated Canadian insurer with strong expertise in long-term management of retirement benefits. The bank intends to reallocate the benefits of the reduced risk towards activities that will drive growth and returns for our shareholders.”
Laurentian Bank is a diversified financial services provider focused on improving its customers’ financial health.
Laurentian Bank (LB) is down by 0.62 per cent and is currently trading at $43.35 per share as of 2:26 pm ET.