A group of institutions, including Sun Life, iA Financial Group and Brookfield Annuity, in collaboration with global advisory firm, Willis Towers Watson, announced April 7 that it will complete a group annuity buy-out transaction worth $1.8-billion for the General Motors of Canada Company (GM).

Under an annuity buy-out, an insurance company assumes responsibility for making pension payments to plan members in exchange for a premium from the pension plan sponsor. The group making the announcement says today’s transaction involves the largest asset in-kind transfer in Canadian history. “In this arrangement, most of the pension plan investments were not sold but transferred to the insurance partners in kind,” they announced.

Sun Life’s share of the deal exceeds the $1-billion mark, with the company assuming responsibility for $1.1-billion. iA Financial Group’s share of the deal is $600-million while Brookfield Annuity is expected to cover $100-million. The transaction shifts responsibility for pension payments that are owed to more than 6,000 members of GM’s salaried pension plan who retired prior to June 1, 2020.

“We’ve finally cracked the $1-billion mark for a single insurer in a single day with Sun Life’s $1.1-bilion share of the deal,” says Brent Simmons, head of defined benefits solutions with the company.

Willis Towers Watson, meanwhile, calls the deal ground-breaking. “It demonstrates that Canadian insurers can now effectively meet plan sponsors’ needs for jumbo transactions, a milestone in the evolution of pension risk transfers in Canada.”

In a statement to the Insurance Portal, Sun Life adds that the deal proves that jumbo deals are now possible in Canada, even given volatile market conditions caused by the pandemic. “Plans sponsors can now expect competitive pricing for very large transactions,” the insurer stated.