Morneau Shepell advises on a pension risk transfer for Navistar Canada ULC
More than $300 million in group annuity contracts helps reduce the financial impact of the pension plans
TORONTO, February 27, 2019 – Morneau Shepell (the "Company") (TSX: MSI), a leader in pension de-risking in Canada, announced today that it advised Navistar Canada ULC in the execution of an annuity buy-out deal for a large portion of its retirees.
The buyout deal, valued at CAD $333 million (USD $268 million) follows an increasing trend of defined benefit plan sponsors transferring their pension risk to a third party.
The transaction covers more than 1,700 retirees. RBC Insurance and iA Financial Group were awarded a portion of the group annuity buy-out. Their appointment followed a thorough selection and due diligence process. The payment of the retirees’ monthly pension will now be the responsibility of these insurance companies.
Morneau Shepell had been working with Navistar Canada on the development of the de-risking strategy, which led to the bulk annuity transaction. “As defined benefit plans gain in size and maturity, many companies face the challenge of increased volatility both on contribution requirements and on their balance sheets,” said Benoît Labrosse, vice president, Morneau Shepell Asset & Risk Management. “Plan sponsors are increasingly looking for pension de-risking strategies to enable them to focus on their core business. In this context, bulk annuity transactions for retirees can be a great option.”
About Morneau Shepell
Morneau Shepell is the only human resources consulting and technology company that takes an integrated approach to employee well-being, health, benefits and retirement needs. The Company is the largest administrator of retirement and benefits plans and the largest provider of integrated absence management solutions in Canada. LifeWorks by Morneau Shepell is a total well-being solution that combines employee assistance, wellness, recognition and incentive programs. As a leader in strategic HR consulting and innovative pension design, the Company also helps clients solve complex workforce problems and provides integrated productivity, health and retirement solutions. Established in 1966, Morneau Shepell serves approximately 24,000 clients, ranging from small businesses to some of the largest corporations and associations. With more than 4,500 employees in offices worldwide, Morneau Shepell provides services to organizations around the globe. Morneau Shepell is a publicly-traded company on the Toronto Stock Exchange (TSX: MSI). For more information, visit morneaushepell.com.
Navistar International Corporation (NYSE: NAV) is a holding company whose subsidiaries and affiliates produce International® brand commercial trucks, proprietary diesel engines, and IC Bus® brand school and commercial buses. An affiliate also provides truck and diesel engine service parts. Another affiliate offers financing services. Additional information is available at www.Navistar.com.
SOURCE Morneau Shepell Inc.