Yellow Pages Ltd. has secured the support of enough shareholders to approve a plan to bolster its defined benefit pension plan’s coffers.

During a virtual meeting scheduled for Sept. 23, 2022, shareholders are expected to vote on a proposal to advance $24 million to the company’s DB plan. “Our board has approved the use of discretionary cash of $100 million to buy back the company’s shares and also advance $24 million of planned voluntary contributions to the defined benefit pension plan by the end of the year, as part of a plan of arrangement,” noted a press release.

According to the Yellow Pages board, the proposal is already supported by voters holding at least 78 per cent of its outstanding shares. In order to be enacted, it must receive support from holders of at least 66 per cent of its outstanding equity.

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The board first first proposed the move on Aug. 4, 2022. If approved, it would replace an earlier plan to make voluntary annual contributions of $6 million between 2027 and 2030.

The strategy is part of a broader deficit reduction plan, which has been ongoing since May 2021 and aims to ensure the pension is fully funded by 2030.

Yellow Pages’ DB plan, which is registered with the Canada Revenue Agency and the Financial Services Commission of Ontario, represents all employees hired prior to Jan. 1, 2006. According to its most recent annual report, the plan’s assets were valued at $503.7 million on Dec. 31, 2021, up 14.7 per cent over the previous year. Then, and now, its solvency ratio is between 85 per cent and 100 per cent.

In a recently published quarterly report, Yellow Pages revealed it is already making regular payments to the pension plan. “Consistent with our previously announced deficit reduction plan, in the second quarter of 2022 alone, we made $1 million of voluntary incremental payments toward our defined benefit pension plan’s windup deficit.”

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