TORONTO--(BUSINESS WIRE)--GreenFirst Forest Products Inc. (TSX: GFP) (“GreenFirst” or the “Company”) announces that the Company through one of its subsidiaries has purchased a buy-out group annuity that transfers approximately $26.5 million of defined benefit pension obligations to a Canadian insurance company. The Company’s prudent management of the pension fund is expected to allow the recognition of a net settlement gain of approximately $0.8 million before the end of the year.
Under the group annuity transaction, the Canadian insurance company will have the responsibility of paying pension benefits. This includes payments to current pensioners and beneficiaries already receiving payments, as well as former employees who are entitled to a deferred pension that will begin when they retire. The Canadian insurance company will begin administering the pensions covered by the group annuity in November 2024. The group annuity purchase will require no cash funding from GreenFirst. Going forward, the transaction reduces the Company's non-operating financial risk and administrative costs, further simplifying its operations.
“We are excited to share this significant development, which not only reduces the risk associated with pension obligations but also ensures that pension plan members covered by the group annuity continue to receive the same pension benefit from a highly rated insurance company with extensive expertise in providing lifetime pensions to Canadian retirees,” said Joël Fournier, CEO, GreenFirst.
TELUS Health acted as advisor to GreenFirst on this transaction.
GreenFirst Forest Products is a forest-first business, focused on sustainable forest management and lumber production. The Company owns four sawmills located in rich wood baskets proudly operating over 6.1 million hectares of FSC® certified public Ontario forestlands (FSC®-C167905). The Company believes that responsible forest practices, coupled with the long-term green advantage of lumber, provides GreenFirst with significant cyclical and secular advantages in building products.
For more information, please visit: www.greenfirst.ca.