Sun Life Seals Dual Fund Buy-In

Canada’s largest ever bulk annuity transaction involves not one, but two separate pension funds.

Sun Life Assurance Company has sealed a C$530 million ($375 million) buy-in with two Canadian pensions, the country’s biggest bulk annuity deal to date.

The arrangement involves two unrelated—and unnamed—pensions with inflation-linked liabilities, and was completed last month.

In a statement announcing the transaction, Sun Life said it had “generated significant cost savings” that would not have been available with separate deals.

“A combined annuity purchase is appropriate for plans with indexing formulas that are related to inflation but are different enough to be complementary,” the company said.

Brent Simmons, senior managing director for defined benefit (DB) solutions at Sun Life, said the deal was “in response to market demand for affordable solutions for inflation-linked plans.” A significant number of Canadian DB pensions have benefits linked to inflation.

“Plan sponsors are looking for creative ways to de-risk and this is just one example of how we can help them meet their objectives and focus on their core business,” Simmons added.

Last year was the busiest year for de-risking in Canada, with C$7.5 billion transferred, Sun Life said.

The country’s third-biggest insurer is no stranger to firsts: It was also behind Canada’s inaugural longevity swap with telecoms group Bell, worth C$5 billion, in March 2015.

Related: De-risking by Conference Call