Largest Canadian de-risking transaction during initial months of COVID-19
Amidst volatile markets caused by the COVID-19 pandemic, Sun Life, in consultation with Eckler Ltd., secured a $176 million annuity buy-in – the largest Canadian de-risking transaction in the first half of 2020. The deal is with Corby Spirit and Wine Limited (“Corby”) and Hiram Walker & Sons Limited (“Hiram Walker”), manufacturers and marketers of spirits and wines. Hiram Walker, Corby’s majority shareholder, is a wholly-owned Canadian subsidiary of international spirits and wine company Pernod Ricard S.A., which is headquartered in Paris, France.
While some plan sponsors have put de-risking plans on the back burner due to market conditions and governance hurdles, Corby and Hiram Walker saw an opportunity. Sun Life’s strong risk management culture and innovative capabilities helped secure this transaction. This deal highlights a continuing trend in the Canadian market, as plan sponsors seek better risk management solutions so they can focus on their core business.
“A deal of this size and scale during a global pandemic demonstrates our competitive approach and ability to provide long-term protection for retirees,” says Brent Simmons, Head of Defined Benefit Solutions at Sun Life. “Despite a volatile market, we planned strategically, working alongside Eckler, and were able to produce a great outcome for Corby and Hiram Walker.”
“Our people, both current and retired, remain a top priority for us and this deal helps provide financial security for our retirees and beneficiaries,” said Melissa James, Vice President, Total Rewards & Organizational Effectiveness, Pernod Ricard North America. “We were impressed with Eckler’s guidance, as well as the partnership with Sun Life. During a time that has provided so much uncertainty, we were pleased that Sun Life and Eckler were able to provide us with some level of certainty and stability for our retirees.”
Actuarial consulting firm, Eckler worked closely with Sun Life to advise Corby and Hiram Walker on the development of the de-risking plan. “We are delighted to bring Sun Life, Corby and Hiram Walker together to complete this milestone transaction. With it, Corby and Hiram Walker meet key business objectives, while protecting their pensioners’ benefits,” said Daniella Vega, Principal, Eckler Ltd. “It gives real meaning to Eckler’s purpose to work together to help create a secure future for Canadians.”
The deal covers 750 retirees and beneficiaries within Canada. There will be no change for members, who will continue to be paid from the plan as before the transaction. The deal closed on May 20, 2020.
Source: Company Press Release