Rayonier Advanced Materials, Jacksonville, Fla., has agreed to purchase a group annuity contract from Sun Life Financial to transfer C$293 million ($221 million) of its Canadian pension plan liabilities.
As part of the transaction with the global chemical company, Toronto-based Sun Life will take over the responsibility for pension benefits owed to nearly 1,500 Ontario, Manitoba and Quebec retirees, deferred vested members and beneficiaries, said Mickey Walsh, treasurer and vice president, investor relations at Rayonier, in an email Friday.
Effective Jan. 1, 2020, Sun Life will begin administering pension benefits for the affected plan participants, whose pension benefits will remain unchanged, Mr. Walsh confirmed.
The transaction covers nine of Rayonier's 12 Canadian pension plans, "reducing by 40% its Canadian DB pension liabilities," Mr. Walsh wrote.
As of Dec. 31, Rayonier Advanced Materials had defined benefit assets of just more than $1 billion across all of its pension plans, inclusive of the U.S., he added. The annuity buyouts accounted for about 22% of the plans' assets, according to Mr. Walsh.