Yellow Pages Pensioners’ Group Announces Agreement with Yellow Pages on Additional Funding for Pension Plan
August 5, 2022
We are pleased to announce that our client, the Yellow Pages Pensioners’ Group (“YPPG”), has reached an agreement with Yellow Pages as part of Yellow Pages’ recent “share buy-back” transaction. The agreement will see a total payment of $30M paid to the pension plan in 2022 to improve the funded status of the pension plan. This amount significantly exceeds the minimum annual contribution required under Ontario’s Pension Benefits Act.
YPPG and Koskie Minsky LLP have been engaging with the company for the past few years to provide additional funding for the Yellow Pages pension plan, which is underfunded. As part of our past discussions, the company agreed in May 2021 to implement a “DB Deficit Reduction Plan” under which it would pay $6M per year to the pension plan over 10 years, from 2021-2030. These payments were estimated to bring the plan to fully funded status by 2030.
Koskie Minsky LLP recently engaged with Yellow Pages to discuss the company’s plan to issue a “share buy-back” of $100M through a “Plan of Arrangement” to be brought before the court.
After intensive negotiations with the company in a short timeframe, an agreement has been reached where Yellow Pages will accelerate four payments under the DB Deficit Reduction Plan for the years 2027-2030 into one payment (a total of $24M) into the plan this year, instead of over those future four years. When combined with the $6M the company is paying to the plan this year under the DB Deficit Reduction Plan, that means that a total of $30M will be paid to the plan by year end. The company has also confirmed its intention to also make the additional annual payments of $6M for years 2023-2026 inclusive.
“We are very pleased to have reached this agreement with Yellow Pages. The contribution of $30M to the pension plan this year, along with the company’s intention to contribute $24M over the next four years, significantly moves the plan toward fully funded status and secures the payment of payment of pension benefits of Yellow Pages retirees.” says Jean-Pascal Lion, the President of YPPG.
“The Pension Agreement reached with Yellow Pages as part of its share buy-back transaction is a very good result for the retirees and the pension plan, and it provides certainty for both sides as well as avoiding potential litigation and costs.” says Andrew J. Hatnay of Koskie Minsky LLP.
Andrew Hatnay leads the Koskie Minsky team.