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Sun Life Assurance, BMO Insurance make pension annuity buyout

Loblaw Cos. Ltd., a Canadian conglomerate that includes retail businesses and financial services and insurance operations, has agreed to an annuity buyout transaction with Sun Life Assurance Co. of Canada and BMO Insurance, a unit of BMO Financial Corp.

Under the agreement, the two insurers will assume responsibility for making pension payments to Loblaw's pension members in exchange for a premium from the pension administrator. The Loblaw pension benefits are linked to inflation.

"There are many plans in Canada that provide inflation-linked pensions and we believe there are significant opportunities for these plans to transfer risk at an affordable cost," Brent Simmons, Sun Life's senior managing director of defined benefit solutions, said in a statement.

The transaction was valued at about C$350 million, according to a press release from Willis Towers Watson Plc, which advised Loblaw on the deal.

Sun Life Assurance Co. of Canada is a subsidiary of Sun Life Financial Inc.