Yellow Pages Ltd. is transferring $210 million in defined benefit pension liabilities through a group annuity contract with BMO Insurance.
According to a press release, BMO Insurance will issue annuities covering the responsibility for pension benefits of roughly 860 retired plan members at the company. The insurance firm will start administering all benefits to these members beginning in October.
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As part of the transaction, Yellow Pages will reduce its pension plan obligations by about 50 per cent. The annuities purchase is being funded by assets of the plan itself and the company expects to recognize a non-cash net settlement loss during the second quarter of 2025.
In addition, it plans to contribute $4 million to the plan by the end of June 2026, pending a review by its board of directors.
In a press release, David Eckert, chief executive officer at Yellow Pages, said the firm intends to reallocate the benefits of the reduced risk towards activities that will continue to bend the revenue curve.
“We are pleased to have reached this agreement as it strengthens our balance sheet and lowers the risk from pension obligations, while allowing the pensioners and beneficiaries to receive equivalent pension benefits from BMO Insurance, a highly-rated Canadian insurer with strong expertise in long-term management of retirement benefits.”
Read: Yellow Pages expecting shareholder approval for special payment to DB pension plan