As many of you may already be aware, BCE made an announcement in early March that it had entered into an agreement with Sun Life Insurance to take on the longevity risk for $5 billion of the Bell Canada Pension Plan pension liability. This agreement further advances Bell’s overall pension de-risking strategy. Called a longevity swap/insurance, the agreement involves a monthly ‘swap’ between real pension payments (from Sun Life) and expected pension payments (from the Pension Plan), calculated using a mortality table agreed to by both parties.
Quite simply, the Bell Canada Pension Plan is buying insurance against members living longer than expected on $5B of pension liability, thereby adding an extra layer of financial protection to the pension promise. Under this transaction, Bell is not transferring $5B of assets to Sun Life. In fact, a relatively small amount of money will be exchanged between the parties over the course of the agreement.
Notably, the agreement does not have any impact of any kind on retirees’ monthly pension amounts and pension benefits, as applicable. Bell retains responsibility for the Pension Plan and pensioners will continue to receive the same monthly pension cheques from Bell as they did prior to the agreement.
We encourage you to come out to the BPG Spring Annual General Meeting in your area. A pension expert from BCE will be there to present further details about the agreement and answer any questions you may have. We look forward to seeing you there!
As well, more information about the agreement is available in a Question and Answer document on the BPG website.