Dentons Canada LLP is proud to be Canadian Wheat Board’s legal advisor regarding a $150-million inflation-linked annuity policy agreement – the first such transaction in Canada. The agreement, signed by Canadian Wheat Board (CWB) and Sun Life Assurance Company of Canada, a wholly-owned subsidiary of Sun Life Financial Inc. (TSX/NYSE: SLF), transfers investment and longevity risk from CWB's defined benefit pension plan to Sun Life Financial.

The project was led by Scott Sweatman and Mary Picard, Partners in Dentons Canada's Pension & Benefits group, with additional counsel from pension Associate Colin Galinski. The team provided legal advice to CWB, supporting the organization in navigating a complex business and legal landscape to arrive at an optimal pension solution for CWB. Based on a creative "annuity buy-in,” this solution delivers long-term security for CWB pension plan members.

“At Dentons, we are excited to be an integral part of the effort that launched this unique annuity product,” said Scott Sweatman. "This transaction would not have been possible without the innovative thinking of CWB and the close working relationship with the project teams at Aon Hewitt and Sun Life.”

An annuity buy-in is a type of investment held in a pension fund that allows investment and longevity risk to be transferred to an insurance company, while preserving members’ pension benefits. This investment strategy increases long-term pension security for plan members by better aligning pension plan promises and investment assets. A $150-million inflation-linked annuity policy agreement between Canadian Wheat Board and Sun Life is the largest single-day purchase of inflation-linked annuities in Canada and the largest single-day purchase of a next-generation annuity buy-in in the country.

“A buy-in annuity does not transfer plan administration obligations to an insurance company. Instead, it’s designed to relieve employer headaches caused by the uncertainty of future contribution obligations,” said Mary Picard. “That makes it an interesting choice in the toolbox of de-risking strategies available to employers who sponsor defined benefit pension plans.”

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