Stelco Inc. is de-risking one of its defined benefit pension plans with a $1.3 billion annuity buy-in.
The deal, which covers more than 7,000 United Steelworkers members and beneficiaries employed at the company’s Hamilton, Ont.-based plant, was completed in May with Brookfield Annuity Co. and Sun Life Financial Inc.
Read: Stelco workers, retirees learn fate of benefits plans as restructuring finalized
In a press release, the Financial Services Regulatory Authority of Ontario said this is the second of Stelco’s five legacy DB pension plans to purchase annuities, noting the buy-in annuity contracts will be converted to buyout annuity contracts when the plan is eventually wound up by the FSRA. Stelco’s three remaining plans are working toward the same outcome, noted the release.
In 2017, the now-dissolved Financial Services Commission of Ontario appointed Morneau Shepell Ltd. (now LifeWorks Inc.) as plan administrator to oversee Stelco’s DB plans, following the company’s restructuring in 2016.
Stelco and the United Steelworkers didn’t respond to Benefits Canada’s requests for comment.
Read: Morneau Shepell appointed administrator of Stelco’s five DB pension plans