Laurentian Bank of Canada is buying group annuity contracts to cover the responsibility for pension benefits owed to about 400 retirees, beneficiaries and deferred pension members.
The bank says the deal with a Canadian insurer transfers about $60 million in obligations and related assets in connection with its three registered defined benefit pension plans.
Laurentian says the obligations related to pension benefits for active plan participants will remain with the bank and continue unchanged.
Under the agreement, the insurer will begin administering the benefits in April.
The bank says the agreement reduces its non-operating financial risk and administrative costs.
Laurentian announced a deal late last year to split itself up and sell its commercial operations to Fairstone Bank of Canada and its retail and small business arm to National Bank.