2012 Specified Plan Change Cycle Underway

SC Receives Annual Actuarial Valuation

March 1, 2012

The 2012 cycle for considering specified plan change proposals is underway. The 2011 Actuarial Valuation of the OMERS Primary Pension Plan was received by the SC on February 22nd. One request was received from a Stakeholder prior to February 29th and is being reviewed by the Plan Design Information Committee (PDIC). In order to be considered, plan changes must be proposed by individual SC Members at the March 20th or April 26th meetings of the SC. Details will be provided throughout the process in the Plan Change section.

Primary Plan - Funded Status at December 31, 2011

Recently OMERS announced a 3.17% total rate of return in 2011 for the OMERS Primary Plan. While the 2011 results are positive, the investment losses suffered in 2008 continue to affect the funded status of the Plan.

On February 22, 2012, the OMERS Sponsors Corporation received the actuarial valuation report for the OMERS Primary Plan as of December 31, 2011. The report indicates that the deficit has grown from $4.5 billion at the end of 2009 to $7.3 billion at the end of 2011. The increased deficit is largely attributable to the economic downturn of 2008 as well as losses due to actuarial assumption changes on an aging population.

Principal Results of December 31, 2011 Primary Plan Valuation

(in $billions) Going Concern
Market Value of Assets $54.9
Adjustment for Actuarial Value $2.3
Smoothed Value of Assets $57.2
Actuarial Liabilities $64.5
Surplus/(Deficit) ($7.3)
Going Concern Funded Ratio 89%

 

The SC considers the funded status of the Plan along with other considerations as part of its Plan Design Change Process.

Note: Subsection 15(1) of the OMERS Act, 2006, stipulates that the SC shall not amend the Prmary Plan in a manner which reduces contributions or increases going concern liabilities unless, after the amendment, the ratio of the market value of assets to the going concern actuarial liabilities is not less than 1.05.  At Decembe 3, this ratio wa 0.85.