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(Adds further details, background on longevity insurance)
TORONTO, March 3 (Reuters) - Telecommunications provider BCE Inc has reached a deal to transfer the longevity risk for C$5 billion ($4.01 billion) of pension plan liabilities to insurer Sun Life Financial Inc, the companies said on Tuesday.
The companies said the longevity insurance agreement is the first of its kind in North America.
Under the deal, the Bell Canada Pension Plan will pay monthly premiums to Sun Life. In exchange, Sun Life will make monthly pension payments into the plan for the lifetime of existing pensioners.
Longevity insurance plans are more common in Britain, where the pension plan for BT Group Plc struck a major deal in July to insure against the risk that its members live longer than expected.
Defined benefit pension plans that make lifetime payments to members structure their finances based on projected mortality rates. But medical advances and increasing life spans have increased the risk that some of those projections could fall short.
BCE Chief Financial Officer Siim Vanaselja said in a statement the deal would reduce the risk for its pension obligations without requiring additional cash contributions.
Sun Life said it will reinsure a portion of the longevity risk to RGA Canada and SCOR Global Life. ($1 = 1.2479 Canadian dollars) (Reporting by Jeffrey Hodgson; Editing by Jeffrey Benkoe)