Air Canada and unions representing more than 20,000 employees are reaching an agreement that will wind down a shared pension trust to the benefit of retired workers who are part of the company’s defined benefit plans.

The airline was granted relief from pension solvency funding when facing insolvency in 2009. As part of the arrangement, Air Canada issued more than 17 million — or 15 per cent — of its class B common voting shares to a joint share trust with the airline’s unions as sole beneficiaries.

The repurposed shares have a current market value of about $455 million based on their latest closing price on the Toronto Stock Exchange, compared to a market value of about $24 million when the shares were issued to the trust in 2009, according to a press release from Air Canada.

Read: How Air Canada’s pension took off as Canada Post’s plan sank into deficit

Earlier this month, following negotiations between the unions and Air Canada, an agreement has been struck that will wind down the share trust over a period of time. The shares will be gradually sold over a period of up to 15 years with the net proceeds from the sales used to make lump-sum payments to Canadian pensioners and offer voluntary separation packages for senior unionized employees and non-executive employees.

“ACPA and our pension experts have invested countless hours working alongside our fellow union leaders to ensure these long-held shares can be deployed for the benefit of our current and future retired members and their families,” said Robert Giguere, chief executive officer of the Air Canada Pilot Association, in a press release from the unions. “This is a good day for workers in an industry that was nearly devastated by the 2008 financial crisis and more recently by the global pandemic.”

Read: Air Canada maintains ‘significant pension solvency surplus’ amid coronavirus pandemic

By supporting the pension strategy since 2009, the unions, employees and pensioners have helped Air Canada in its efforts to turn a nearly $3-million pension solvency deficit to a surplus of nearly the same amount, said Michael Rousseau, the airline’s president and CEO, in the release.

“That cooperative spirit is on display again in this agreement to repurpose over 17.6 million shares for the benefit of our defined benefit plans’ Canadian pensioners and active employees by providing a source of funding for lump-sum payments to pensioners and voluntary separation packages that may be offered to senior unionized employees and non-executive employees to help them explore new alternatives if they wish.”

The arrangement won’t be finalized until it has received required regulatory approvals.

Read: Charting a new course at the Air Canada pension plans