First pension longevity transaction outside of the United Kingdom and fifth largest globally delivers all-Canada solution
Mercer was lead advisor on Canada’s first pension longevity insurance transaction, involving Bell Canada, a subsidiary of BCE Inc. (TSX/NYSE: BCE) and Sun Life Assurance Company of Canada, a wholly-owned subsidiary of Sun Life Financial Inc. (TSX/NYSE: SLF), who announced earlier today that they have signed a $5 billion insurance policy to insure the Bell Canada Pension Plan against the longevity risk of its retirees.
“This transaction is not only unprecedented, but it also delivers an innovative longevity risk management solution for both Bell Canada and Sun Life”, said Benoit Hudon, Mercer Retirement Innovation Leader and lead advisor on the transaction.
According to Manuel Monteiro, Leader of Mercer’s Financial Strategy Group, “Many plan sponsors have done a good job at managing financial risks such as the volatility of equity markets, or the evolution of interest rates. However, very few have seriously looked at the risks related to improving life expectancy”.
Paul Forestell, Canada Retirement Leader at Mercer noted that “Longevity transactions have existed for a few years in the UK, where the rules are different, so the challenge was to adapt the concept to the Canadian environment. This is just one of the many innovative solutions we are exploring with our Canadian clients.”
This transaction consolidates Mercer’s position as the market leader in advising on large-scale sophisticated pension transactions.
Mercer is a global consulting leader in talent, health, retirement and investments. Mercer helps clients around the world advance the health, wealth and careers of their most vital asset – their people. Mercer’s more than 20,000 employees are based in 43 countries and the firm operates in over 140 countries. Mercer is a wholly owned subsidiary of Marsh & McLennan Companies (NYSE: MMC), a global professional services firm offering clients advice and solutions in the areas of risk, strategy and people. With annual revenue of $13 billion and 60,000 colleagues worldwide, Marsh & McLennan Companies is also the parent company of Marsh, a leader in insurance broking and risk management; Guy Carpenter, a leader in providing risk and reinsurance intermediary services; and Oliver Wyman, a leader in management consulting. For more information, visit www.mercer.ca. Follow Mercer on Twitter @MercerCanada.