Sun Life completes $114-million deal to secure Fraser Papers’ pensions

When Sun Life Financial Inc. announced the completion of an annuity buy-in transition to secure the pensions for former employees of now defunct Fraser Papers Inc., the deal was a culmination of many months of work to monitor markets for the right conditions needed to close the deal.

Under the $114-million buy-in deal, Sun Life will make regular annuity payments to the Fraser Papers plans for both union employees and former salaried employees to ensure uninterrupted payments of monthly pensions, while Fraser’s boards continue to administer the plans.

A buy-out deal where Sun Life would take over administration of the plan, says Mathieu Tessier, vice president of client relationships and innovation in Sun Life’s defined benefit solutions team, is a future possibility for the plan when the company’s creditor proceedings are brought to a close.

Pensions were impacted when company filed for creditor protection 

The pensions for Fraser Papers’ employees were impacted when the company filed for creditor protection under the Companies’ Creditors Arrangement Act (CCAA) in 2009. At the time, employee pensions were reportedly slashed by up to 40 per cent. Courts also reportedly blocked the union’s efforts to bring Fraser Papers to account for the missing monies.

“The new agreement enables the termination of the shared risk plans and brings the CCAA process to an end for these plan members,” Sun Life said in a statement when the annuity deal was announced in November 2025. The company says the pensions being secured by the deal are those that are and were being paid in 2025.

Transaction took several months 

Sun Life says the timing of the transaction took several months as the companies and consultants monitored market conditions, interest rates, underwriting and the assets the defunct company had at its disposal to make premium payments. “There’s a period where we’re trying to converge towards the right answer and optimize,” says Tessier. “This is what happened in this case. Eventually the conditions are all right for this. They all align.” 

He says the use of a buy-in annuity is a little groundbreaking in CCAA proceedings. “At a certain point, you want to give all members this financial security and peace of mind, which would be more difficult if you waited for the rest of the plan termination to happen.”