By Robb M. Stewart
Canadian phone directories and marketing company Yellow Pages has moved to strengthen its balance sheet and reduce risks associated with its pension obligations.
Yellow Pages said Wednesday it struck a deal with Bank of Montreal's life assurance arm that will allow certain retirees and beneficiaries to receive equivalent pension benefits from the insurer. It is part of the company's efforts to remove risk from pension plan and protect realized investment gains.
The company will buy annuity contracts from BMO Life Assurance to help transfer about 210 million Canadian dollars ($150.9 million) of its defined benefit pension plan for certain retirees and beneficiaries.
BMO Insurance will issue annuities covering the responsibility for pension benefits of roughly 860 pensioners and beneficiaries of the company, and will begin administering all benefits to these members beginning in October. Yellow Pages said there will be no change to the pension benefits for any plan participants.
With the deal, Yellow Pages said it will reduce its pension plan obligations by about 50%. The purchase of the group annuity contracts will be funded directly by assets of the pension plan and the company said it intends to voluntarily contribute an additional C$4 million to the pension plan by the end of June 2026, subject to review by its board.
The company expects to recognize a net settlement loss during the second quarter of 2025.
Write to Robb M. Stewart at robb.stewart@wsj.com
(END) Dow Jones Newswires
May 21, 2025 08:02 ET (12:02 GMT)
Copyright (c) 2025 Dow Jones & Company, Inc.
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