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SC Board Meeting Summaries

Starting with Q3 2020 we will post all significant activities and decisions made by the Sponsors Corporation (SC) Board on a quarterly basis. Decisions made by the SC Board before Q3 2020 are also provided below.

Additional information can be found in Activities & News.


2020 SC Board meetings

Q3 2020

The focus for the SC Board in Q3 has been the commencement of the SC Board’s Board Composition Review and the next phase of its Board Effectiveness Review, the first phase of which was completed at the end of 2019.  The SC Board had previously conducted composition reviews in 2013 and 2016.  Details about earlier Q1 and Q2 activities are provided below.

At a special meeting on July 14, 2020, the SC Board approved the scope of the review and the form of communication to sponsors and stakeholders. The SC Board confirmed that it would consider the question of who should sit on the SC and AC Boards, based on the member and employer affiliation data at the end of 2019, and applying the principles approved in May, 2020.

Chair and Vice-Chair roles

At its August 20, 2020 meeting, the SC Board approved the election of Frank Ramagnano as the Chair of the SC Board, and the election of Barry Brown as the Vice-Chair of the SC Board, effective January 1, 2021.

Board Member Assessment Process

At its August 20, 2020 meeting, the SC Board approved the board assessment conducted by its Human Resources & Compensation Committee, approved the skills matrix applying the information collected during the assessment, and identified areas for future discussion with sponsors as board member term limits take effect.

Voting and Arbitration

In Q3, in conjunction with the Board Composition Review discussed above, the SC Board approved the scope and plan for completing the remaining outstanding items in the Board Effectiveness Review, focusing on weighted voting, where some directors have multiple votes, matters requiring 2/3 majority voting, and matters where issues under consideration by the SC Board can be referred to external arbitration, namely plan design decisions where the Board is not able to reach a 2/3 majority vote, and appointment of AC Board members.

Following a report and recommendation from the Risk Oversight Committee, the SC Board approved a Risk Framework, a risk appetite statement for the Primary Plan, a risk appetite statement for the Retirement Compensation Arrangement, and subsidiary risk appetite statements for pension risk, operational risk and governance risk. The risk appetite statements were also approved by the AC Board.

Q1 and Q2 2020

The primary focus of the SC Board for Q1 and Q2 of 2020 was the Plan change process. The SC Board had a series of meetings considering two proposals submitted in 2019 relating to what the Board called Shared Risk Indexing for future service and expanding the eligibility for non-full-time employees to join the Plan.  The SC Board also had to consider the immediate impact of the COVID-19 pandemic on current operations, as well as members and employers.  The SC Board educated itself on the potential long-term impact of the pandemic on the Plan's financial health and long-term sustainability.  The SC Board added three Plan changes to its review process in May to help Plan members deal with the implications of COVID-19 workplace changes.  The SC Board also approved several measures relating to the implementation of changes approved as part of the Board Effectiveness Review conducted in 2019.

More detail is provided below.

Shared Risk Indexing

At its February 25, 2020 meeting, the SC Board authorized the CEO to obtain public feedback from sponsors, stakeholders, Plan members and employers regarding a proposal to implement Shared Risk Indexing. The Board decided that any changes would only take effect as of January 1, 2023.  The SC Board also directed the CEO to evaluate a funding management approach that would guide Board decision-making in the future.  The Board had a series of meetings to consider alternative approaches.  It also considered whether it would be appropriate to postpone its decision due to the COVID-19 pandemic and determined that it would maintain its original timeline.  At its June 24, 2020 meeting, the Board voted to approve By-Law No. 42 and amend By-Law No. 20 to implement the Shared Risk Indexing Plan amendment and establish the current inflation adjustment at 100%. Learn more about how we are preparing for the future and more details on Shared Risk Indexing.

Non-full-time expansion

Also at its February 25, 2020 meeting, the SC Board authorized the CEO to obtain public feedback on a proposal to expand eligibility for non-full-time members to join the Plan by removing current eligibility requirements.  The Board also decided that these changes would be effective as of January 1, 2023.  At its June 24, 2020 meeting, the SC Board voted to approve By-Law No. 43 to implement the non-full-time expansion Plan amendment.

COVID-19 proposals

At its May 19, 2020 meeting, the Board agreed to consider three proposals relating to extending leave purchase options, reducing the 36-month employment requirement for leave purchases and permitting temporary layoffs as purchasable service, all of which were intended to reduce the hardship faced by employees from workplace changes brought about by the COVID-19 pandemic.  This decision was made under the SC Board’s by-law provision that allows for Plan changes relating to unforeseen circumstances where a failure to act could create hardship for Plan members.  At its June 24, 2020 meeting, the SC Board voted to approve By-Law No. 45 to implement the COVID-19 proposals.  The SC Board also voted to approve By-Law No. 44 to update a number of section references resulting from previous changes to the Plan text.

The SC Board recognized that the Plan change program would require a significant effort to engage with sponsors and stakeholders, as well as Plan members generally.  The Board directed the CEO to allocate additional internal and external resources to the program, and at its February 25, 2020 meeting, it also directed the CEO to extend the external engagement process from the minimum one month (May to June) contemplated in the corporation’s by-laws to four months (March to June) to provide additional time for sponsor and stakeholder input.  The Board considered the impact of COVID-19 on the consultation process and after much discussion confirmed at its May 19, 2020 meeting that it would adhere to its original timeline.

The SC Board considered a proposal to extend the term limits for OMERS Administration Corporation (AC) Directors, looking at peers and leading practices, and at its February 13, 2020 meeting, it agreed to extend AC Directors' term limits to 12 years, and apply the same term limits at the Sponsors Corporation.

The SC Board had approved a number of initiatives in November 2019 relating to its Board Effectiveness Review.  In Q1 and Q2 of 2020, it approved several processes to implement these initiatives, as follows:

Chair and Vice-Chair roles

At its February 25, 2020 meeting, the SC Board approved formal Board Chair and Vice-Chair role descriptions.  At its May 19, 2020 meeting, the SC Board approved changes to By-Law No. 4 to implement the selection process for the Chair and Vice-Chair, to appoint them as of January 1, 2021.

Board Disciplinary Guidelines

At its February 25, 2020 meeting, the Board approved formal disciplinary guidelines to deal with circumstances where a Board member fails to meet the standards of behavior set out in the SC’s Code of Conduct, or where the Board member’s participation and attendance at Board meetings is a concern.

By-Law No. 6 regarding compensation

At its February 25, 2020 meeting, the SC Board approved changes to By-Law No. 6 to implement the Board member compensation changes for both the SC Board and OMERS Administration Corporation (AC) Board that had been approved in December 2019, as well as the related changes to Board member expense guidelines.

Work plans and agendas

At its April 9, 2020 meeting, the SC Board approved a process to formalize the development of its annual work plans.  This is important to ensure that the Board has the time and resources required to achieve its annual objectives.

Board Member assessment process

In 2019, the SC Board approved a Competency Framework (Framework) that was intended to identify the skills, knowledge and experience that the Board needs to fulfil its functions. The Framework will assist in building the Board in the future and also identify development opportunities within the current Board.  At its June 24, 2020 meeting, the SC Board approved the process that it would use to conduct self-assessments against the Framework, complete a skills matrix and prepare a gap analysis to show where it needed to focus its efforts in the future.  The process will be completed by the end of Q3.

The SC Board has previously conducted Board composition reviews in 2013 and 2016.  These reviews address a number of governance issues, but most fundamentally consider the composition of the SC and OMERS Administration Corporation (AC) Boards, and who sits on these boards.  At its May 19, 2020 meeting, the SC Board approved a series of principles that it would apply in conducting the 2020 review, which is scheduled to commence in Q3.

The annual valuation of the OMERS Primary Pension Plan must be filed with the regulators every three years and may be filed more frequently.  At its February 25, 2020 meeting, the SC decided to file the December 31, 2019 actuarial valuations with the regulators in respect of the Primary and Supplemental Plans.


2019 SC Board meetings

The Board Effectiveness Review was a primary focus of the SC Board for 2019. The review was considered at meetings of the Corporate Governance Committee (CGC) and at meetings of the SC Board. The CGC looked at options for making the Board more effective and brought recommendations to the Board.

CEO succession is a key Board responsibility, and the Board focused significant attention on its appointment of Michael Rolland following Paul Harrietha’s retirement.  The Board appreciated Mr. Rolland’s deep experience with OMERS and his demonstrated leadership abilities.

Another area of focus for the Board during 2019 was jointly approving OMERS 2025/2030 Strategy in collaboration with the OMERS Administration Corporation, and then beginning execution of key priorities.

More detail is provided below.

The OMERS SC Board and the OMERS Administration Corporation Board (AC) approved the 2025/2030 Joint Strategy in May 2019.

The OMERS strategy is about making the right choices today in light of the challenges facing us today and tomorrow and provides direction to deliver on:

  • long-term objectives: making OMERS a sustainable, affordable and meaningful defined benefit Plan; and

  • five-year strategic priorities: Plan Design, Plan Funding, Investment Strategy, Operations and Stakeholder Engagement.

The strategic framework was communicated to stakeholders in June 2019.  Read more about OMERS Strategy.

CEO appointment

The SC appointed Michael Rolland as the interim CEO of the OMERS Sponsors Corporation (SC) effective April 15, 2019. His appointment was made permanent at the November 2019 Board meeting. Mr. Rolland is responsible for organizational leadership and direction as well as assisting the Board in achieving its mission and delivering on its key responsibilities.

Board Effectiveness Review

Throughout 2019, the SC Board conducted a Board effectiveness review with the goal of ensuring OMERS has the most effective possible arrangements to meet the highest contemporary governance standards.

The SC’s Corporate Governance Committee met several times in 2019 about this review and was supported in its work by both OMERS management and outside governance and legal experts. The goal was to improve the SC’s governance regime and promote effective decision making to ensure OMERS is sustainable, affordable and meaningful defined benefit pension plan.

As a result, the SC Board has approved changes that will strengthen the governance framework and support its commitment to members, employers and other stakeholders.  These changes will also help ensure that the Directors of the Sponsors Corporation collectively have the right skills and competencies.

An overview of the changes resulting from the board effectiveness review can be found here.

Board remuneration

The SC is responsible for the remuneration of Directors of both the SC and OMERS Administration Corporation (AC) Boards. Remuneration levels are reviewed every three years.  At its December 2019 meeting, the SC approved compensation increases for Directors of both Boards effective January 1, 2020. Details are included in the 2019 Annual Report.

Amendments from 2018 Plan changes

Resulting from the 2018 Plan-change decisions to remove the 35-year service limit and to make NRA 60 available to paramedic employers effective January 1, 2021, the SC Board approved By-Law No. 38, which pertains to the amendment of the Primary and Supplemental Plans to reflect those Plan changes.

City of Toronto Pension Transfer Agreements

At its August 31, 2017 Board meeting, the SC Board authorized the Co-Chairs and CEO to enter into pension transfer agreements among the SC, OMERS Administration Corporation (AC) and municipalities that had legacy pension plans predating OMERS.  Each pension transfer agreement, once executed, would have the effect of merging an individual closed plan into the Primary Plan.

At the end of 2018, the SC Board approved By-Law No. 37, which amends the Primary Plan to bring the members of the City of York Employee Pension Plan (“York Plan”) in the Primary Plan. 

A pension transfer agreement was reached for the Corporation of The Toronto Civic Employees’ Pension Plan (“Civic Plan”). In August, the SC Board approved By-Law No. 39, which amends the Primary Plan to bring the members of the Civic Plan into the Primary Plan.

A pension transfer agreement was reached for The Metropolitan Toronto Police Benefit Fund (“Police Plan”). In October, the SC Board approved By-Law No. 40, which amends the Primary Plan to bring the members of the Police Plan into the Primary Plan.

A pension transfer agreement was reached for The Metropolitan Toronto Pension Plan (“Metro Plan”). In November, the SC Board approved By-Law No. 41, which amends the Primary Plan to bring the members of the Metro Plan into the Primary Plan.

There are no other City of Toronto mergers being considered.

In March 2019, the SC re-appointed Ms. Penny Somerville, Mr. Paul Elliott, Mr. Bill Butt and Ms. Laurie Hutchinson for three-year terms commencing January 1, 2020.

In August 2019, the SC appointed two new directors Mr. Rajiv Silgardo and Ms. Debbie Fischer for three-year terms commencing January 1, 2020 to replace two existing directors who reached their term limit at the end of 2019.

In December 2019, the SC re-appointed Mr. Yung Wu and Mr. Cliff Inskip for three-year terms commencing January 1, 2021.

Mr. John Weatherup, Mr. Jason Chan, Mr. Fred Biro, Mr. Pete Derochie, Mr. Dan Axford and Mr. Paul Bailey were re-appointed by their respective Sponsors for another three-year term commencing January 1, 2020.

Ms. Giulia Volpe was appointed by OPSEU (replacing Ms. Jennifer Richards) effective November 1, 2019 for the remainder of the existing three-year term.

The annual valuation of the OMERS Primary Pension Plan must be filed with the regulators every three years, and may be filed more frequently.  Although they were not required filings, at its March 2019 meeting, the SC decided to file the December 31, 2018 actuarial valuations with the regulators in respect of the Primary and Supplemental Plans.

The SC and OMERS Administration Corporation (AC) Boards met in November to jointly review the preliminary actuarial assumptions for the December 31, 2019 valuation.


2018 SC Board meetings

The Comprehensive Plan Review (CPR) was the primary focus of the SC Board for 2018, and given the extensive face-to-face engagement and broad communication, no meeting summaries were provided. Plan Design and related matters are contemplated at meetings of the Plan Design Committee (PDC) – a committee-of-the-whole. The PDC looks at options and brings recommendations to the Board. Therefore, in light of the CPR, Board meetings during 2018 deal with the essential administrative and governance issues, allowing time for full discussion and deliberation of the CPR.


2017 SC Board meetings

For 2017, summaries are provided for each SC Board meeting.

Plan Changes

Under its mandate, the OMERS Sponsors Corporation (SC) has responsibility for benefit plan design. At its June 21st meeting, the SC approved the following proposed changes:

  • introduce certain time restrictions related to the payment of commuted values and buy-backs,

  • restrict access to pensions for certain dual members, and

  • permit employers with members working in foreign countries to suspend participation in OMERS.

Plan Changes

The OMERS Sponsor Corporation (SC) agreed that it would consider the following four plan changes for the coming year:

  • Commuted values and buy backs: Introduce certain time restrictions related to the payment of commuted values and buy-backs

  • Dual membership: Restrict access to pensions for certain dual members

  • Foreign Service membership: Permit members working in foreign countries to suspend participation in OMERS

The plan changes noted above will be decided by the SC at its June meeting.  More information is available in the “Understanding Plan Changes” section of the website.

  • NRA 60 Paramedics:  Allow employers to provide NRA 60 benefits to paramedics.

The SC was not prepared to decide this potential change at its June meeting and waived the timelines for this particular decision.  The SC will make a decision by the end of 2017.


Other Plan Changes
The SC continues consultations related to modifying the indexing provisions of the Plan to enable greater risk sharing and enhanced intergenerational equity in the future. In addition, OMERS will be undertaking a research project to inform the SC’s review of eligibility requirements for non-full-time employees.

The SC decided that neither of these issues will reach decision-making in 2017, but they are expected to be decided in 2018.  

OAC Board Appointments

One of the most important responsibilities of the SC is the appointment of directors to the OMERS Administration Corporation (OAC) Board.

In May of this year, the Corporate Governance Committee (CGC) conducted interviews with two incumbent nominees with the participation of the OAC Board Chair, George Cooke.

The SC reappointed Monty Baker and Cliff Inskip to the OAC Board effective January 1, 2018, for three-year terms. 

Governance

The OMERS Sponsor Corporation (SC) received updates on various matters.  The SC also considered several potential plan changes and the extent to which there was merit to moving them forward for broader discussion and decision in June.

The next step in the plan change decision-making process would be a decision in May to broadly communicate those potential plan changes which have merit.

Valuation Projections

The Board received further technical information related to the annual actuarial valuation for the Primary Plan. Various scenarios and analyses were discussed as they relate to the projected funded status of the OMERS Pension Plans.  This information helps the SC manage the long-term health and sustainability of the Plan.
 

Plan Change Decisions

Under its decision-making process, the SC considers whether there is a need for benefit or contribution rate changes based on the Funding Management Strategy (FMS) it adopted in 2014.  The FMS outlines how benefits and contributions will be modified in response to the financial health of the OMERS Primary Plan (the Plan) as the Plan cycles through periods of deficit and surplus.

The FMS did not call for any changes in 2017 as the measures introduced in 2010 remain sufficient to manage the financial health of the Plan and the related decision-making process was not automatically invoked.  Likewise, the SC did not choose to voluntarily invoke the FMS decision-making process in 2017.

Valuation Filing

The valuation report of the OMERS Primary Pension Plan must be filed with the regulators every three years, and may be filed more frequently. Given the improved funded position, the SC decided to file the December 31, 2016 valuation reports in respect of both the Primary and Supplemental Plans. The next required valuation reports will be the December 31, 2019 valuation reports for filing in 2020.

Financial Results

As part of an annual process, the preliminary results of the December 31, 2016 actuarial valuations of the Primary Plan and the RCA were provided to the SC and OAC Boards on February 15.  The funded status of the OMERS Pension Plans at December 31, 2016 was reviewed in preparation for the Funding Management Strategy (FMS) decisions which will be decided at the March 21 Board meeting.

The (FMS) was adopted by the SC to guide decisions regarding the health of the pension plan, including related changes to contribution rates and benefits.  The FMS includes deficit, reserve and surplus management zones based on the funded ratio of the plan.  Each zone includes specific actions meant to address the health of the Plan.

Annually the SC financials are reviewed by an external auditor in conjunction with the Audit Committee, which in turn submits the findings to the Board for approval.  The SC 2016 Financial Statements were approved at this meeting.

Governance

The Board discussed the SC Business Plan and approved the committee slates for 2017.

The Board approved a Memorandum of Understanding (MOU) between the Sponsors Corporation and the Administration Corporation. The MOU replaces the previous Framework Agreement and is designed to help ensure a strong collaboration between the SC and OAC.

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2016 SC Board meetings

For 2016, summaries are provided for each SC Board meeting.

Governance

The appointment of the Independent Board Chair (IBC) of the OMERS Administration Corporation (OAC) is the joint responsibility of the OMERS Sponsor Corporation and OAC.  The SC approved a joint succession protocol for the IBC, which was jointly developed by the SC and OAC.  The joint succession protocol acts as a guideline for the SC and OAC in situations where a successor to the IBC is required on a temporary or interim basis.

Governance

The OMERS Sponsors Corporation (SC) adopted the amended and restated By-Law No. 6 effective January 1, 2017.  By-Law No. 6 outlines remuneration for Directors of the SC and OMERS Administration Corporation (OAC) Boards.

The SC Co-Chairs are appointed annually by the SC Board.  The SC re-appointed Mr. Frank Ramagnano and Ms. Marianne Love to serve as Co-Chairs for the duration of 2017. 

Actuarial Assumptions

The SC and OAC Boards met to jointly discuss the preliminary actuarial assumptions for the December 31, 2016 valuation.

OAC Board Appointments 

The SC appointed Laurie Hutchinson as a Director of the OAC Board for a three-year term, beginning January 1, 2017.

September 20, 2016

Strategic Planning

The OMERS Sponsors Corporation (SC) and the OMERS Administration Corporation (OAC) Boards participated in their fifth annual joint strategic planning session.  The Boards reviewed the progress made with the OMERS 2020 Strategy and discussed the groundwork for a longer-term strategy designed to protect the sustainability of the Plan.
 

September 21, 2016

Governance 

The SC formally appointed Paul Harrietha as the CEO of the OMERS Sponsors Corporation (SC) effective January 1, 2017.  Mr. Harrietha is responsible for organizational leadership and direction as well as assisting the Board in achieving its mission and delivering on its key responsibilities.

The SC is responsible for the remuneration of Directors of both the SC and OMERS Administration Corporation (OAC) Boards. Remuneration levels are reviewed every three years.  The SC approved compensation increases for Directors of both Boards effective January 1, 2017.

The SC held a Strategic Planning session on August 30 to address a number of plan sustainability questions.  An SC Board meeting was convened on August 31 to conduct regular Board business and to confirm decisions coming out of the Strategic Planning session.

Plan Amendements

The SC Board passed motions to adopt By-Laws No. 34 and No. 35, as well as to adopt the amended AVC design policy. 

Valuation Filing 

The SC agreed to file the December 31st, 2015 valuation of the Supplemental Plan.
 

OAC Board Appointments

The SC appointed Mr. Paul Elliott for a three-year term ending December 31, 2019 and Mrs. Darcie Beggs for a two-year term ending December 31, 2018.

Plan Changes

The OMERS Sponsor Corporation (SC) agreed that it would consider a change to the Primary Plan to change the Additional Voluntary Contributions (AVC) program to allow members to retain their non-locked-in AVC funds in the Primary Plan past the age of 71. 

Note that in March the SC agreed to consider changing the contribution rates of the Supplemental Plan effective January 1, 2017.  Although there are currently no members in the Supplemental Plan, it is necessary to ensure the contribution rates reflect our current expectations about the future.
 

OAC Board Appointments 

One of the most important responsibilities of the SC is the appointment of directors to the OMERS Administration Corporation (OAC) Board.

In May of this year, the Corporate Governance Committee (CGC) conducted interviews with several incumbent nominees with the participation of the OAC Board Chair, George Cooke.

The SC reappointed three individuals to the OAC Board effective January 1, 2017, for three year terms:  Bill Butt, Penny Somerville and Jim Phillips.

By-Laws No. 4 & 13 

The SC is responsible for the composition of the Boards which govern the OMERS Pension Plans.

As part of good governance, the SC committed to regularly reviewing by-laws.  For that purpose, in 2015 the SC reached out to stakeholder organizations seeking input for its consideration.  Having heard from stakeholders, and after careful consideration, the SC has decided to maintain the current structure of the OMERS Boards, with the following changes:

  • Imposing term limits of six years for the SC Co-Chair positions.  While this limit has retroactive application, as a transition measure one of the incumbent Co-Chairs is eligible to serve for another three years in the position.

  • Adopting a more formalized and rigorous approach to engage members who are not affiliated with sponsor organizations.

More information about the decision is available below, on OMERS Board Composition By-law Review.

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Governance

One of the most important responsibilities of the OMERS Sponsor Corporation (SC) is the appointment of Directors to the OAC Board, including the Independent Board Chair. 

The OAC Board has 7 seats with terms expiring at December 31, 2016, as well as the Independent Board Chair.  The SC has received nominations for three of these seats with more expected shortly.  To help ensure continuity, certainty and assist with planning, the SC Board:

  • approved George Cooke’s reappointment as the Independent Board Chair of the OAC for a 3-year term effective January 1, 2017; and

  • amended By-Law No. 13 to allow acceleration of the appointment process.

In addition, as part of good governance practice, the SC approved a further amendment to the by-law to require background checks for nominees (whether new or incumbent).

The SC CEO announced her retirement earlier in the year and the SC approved a process for identifying a replacement, including an external advisor to assist in the process.

Governance

One of the most important responsibilities of the SC is the appointment of directors to the OAC Board.  The departure of Darcie Beggs as an OMERS Administration Corporation (OAC) Director resulted in a vacancy on the OAC Board effective March 31, 2016.

Having received a nomination from the affected sponsor organization, the Corporate Governance Committee (CGC) conducted an interview with the nominee, with the participation of the OAC Board Chair, George Cooke.  The SC received a recommendation from the CGC to appoint the nominee and the SC approved the recommendation.

Charlene Mueller joined the OAC Board effective April 1, 2016.  When a vacant term is filled the appointee sits for the remainder of the affected term, in this case until December 31, 2017. 


Valuation Projections 

The Board received further technical information related to the annual actuarial valuation for the Primary Plan and RCA. Various scenarios and analyses were discussed as they relate to the projected funded status of the OMERS Pension Plans.  This information assists the SC in managing the long-term health and sustainability of the Plan.

For the RCA, the annual update of the allocation threshold was presented and discussed.

(The RCA pays benefits over and above the maximum pension payable under the Primary Plan and it is currently funded on a modified pay-as-you-go basis to minimize the tax inefficiencies of such plans. The earnings level at which contributions are made to either the Primary Plan or the RCA [the ‘allocation threshold’] will vary each year based on the actuary’s projections, within a certain corridor, to ensure that the RCA maintains a fund of sufficient size that it would not be expected to be fully depleted for at least 20 years.)


Plan Change Decisions 

Under its decision-making process the SC considers whether there is a need for benefit or contribution rate changes based on the Funding Management Strategy it adopted in 2014.  The Funding Management Strategy outlines how benefits and contributions will be modified as the OMERS Primary Plan (the Plan) cycles through periods of deficit and surplus.

The SC has decided not to invoke the FMS decision-making process in respect of the Primary Plan in 2016 as the measures introduced in 2010 remain sufficient to manage the financial health of the Plan.

However, the SC has decided that it will consider changing the contribution rates of the Supplemental Plan.  Although there continues to be no members in the Supplemental Plan, it is necessary to ensure the contribution rates reflect current expectations about the future. The SC will vote on the changes at its June 21, 2016 Board meeting.


Valuation FIling 

The annual valuation of the OMERS Primary Pension Plan must be filed with the regulators every three years, and may be filed more frequently.  The SC decided to file the December 31, 2015 actuarial valuations with the regulators in respect of the Primary and Supplemental Plans.  

OMERS 2020 Strategy

The OMERS 2020 Strategy is moving forward and progress is being tracked. The SC approved the first component of the Communications and Engagement Plan, which falls under the overarching 2020 Strategy.  In addition, the Board received a report on the progress made to date on the key elements and objectives of the strategy. 
 

Financial Results 

As part of an annual process, the preliminary results of the December 31, 2015 actuarial valuations of the Primary Plan and the RCA were provided to the SC and OAC Boards on February 17.  The funded status of the OMERS Pension Plans at December 31, 2015 was reviewed in preparation for the Funding Management Strategy decisions which will be decided at the March 22 Board meeting.

The SC CEO was authorized to receive final 2015 Actuarial Valuations following approval by the OAC Board, which was expected in the days following the meeting.

Annually the SC financials are reviewed by an external auditor in conjunction with the Audit Committee, which in turn submits the findings to the Board for approval.  The SC approved the 2015 Financial Statements at its February 18, 2016 meeting.

Governance 

The Board received an update on a D & O Insurance review conducted by an independent firm.

The Board received an update from the HRCC Chair regarding the review of HR policies, which is conducted every three years.  The updated HR policies were approved. 


2015 SC Board meetings

For 2015, summaries are provided for each SC Board meeting.

Governance 

As part of its mandate, the Corporate Governance Committee (CGC) regularly reviews governance processes.

The SC approved CGC recommendations relating to SC By-Law No. 9 to reflect changes in committee size.  With the exception of the Plan Design Committee (PDC), committee size will range from 6-8 members at the discretion of the Co-Chairs; thus allowing flexibility to meet changing requirements.  The SC also approved making the PDC a Committee of the Whole, reflecting the importance of the work done by the PDC.

The SC also approved the 2016 Budget and Business Plan.

The SC thanked Brian O’Keefe for his leadership as the Employee Member Co-Chair since the inception of the OMERS Sponsors Corporation and welcomed Frank Ramagnano to that role effective January 1,  2016.

Actuarial Assumptions 

The SC met to discuss a report received from OAC Management on the preliminary actuarial assumptions for the December 31, 2015 valuation, including the discount rate. (Subsequently, on December 9th the SC and OAC Boards met to jointly discuss the preliminary actuarial assumptions). 


Pension Reform

The newly elected federal government indicated an interest in expanding the Canada Pension Plan (CPP). The SC met jointly with the OAC Board for an education session related to the CPP and the potential impacts that CPP reform may have on OMERS and its various constituents. 


SC Appointments

The SC received the last of the SC Board Appointments effective January 1, 2016.

Reappointed for three-year terms effective January 1, 2016 are; Barry Brown, Brian O'Keefe, Charlie Macaluso, Diana Clarke and Sandra Sahli.  The City of Toronto appointed Joe Pennachetti to replace John Fleming, who had served since July 1, 2007.  Mr. Pennachetti will serve the remainder of the current term which expires December 31, 2017; he will be eligible for reappointment thereafter.

For completeness, Dan Axford was appointed by the Police Association of Ontario effective October 1, 2015 to replace Bruce Miller, who had served since June 30, 2006.

Strategic Planning

Having met jointly with the OMERS Administration Corporation (OAC) Board to discuss the joint strategic plan in September, the SC Board received the final report on the OMERS 2020 Strategy in October 2015.  The SC Board approved the OMERS 2020 Strategy subject to its approval by the OAC Board at its October 23rd meeting.

The OMERS 2020 Strategy is the first joint strategic plan for OMERS.  The external roll-out of the new strategy will launch in early 2016.

September 21, 2015

OAC Board Appointments

One of the most important responsibilities of the OMERS Sponsors Corporation (SC) is the appointment of directors to the OMERS Administration Corporation (OAC) Board.  In 2013 a new nomination and appointment process and philosophy were adopted, designed to create a higher capacity OAC Board with a range of important skill sets and competencies. 

The nomination process began in February of this year for two sponsor organizations which have term expirations on December 31.  In late August of this year, the Corporate Governance Committee (CGC) conducted interviews with two individuals that were nominated by sponsor organizations, with the participation of the OAC Board Chair, George Cooke.  Following the interviews, the CGC continued its assessment of current and complementary competencies of the entire OAC Board before providing its recommendations to the SC for approval.

Two current OAC directors were reappointed:  David Beatty (nominated by the City of Toronto) and Michael Fenn (nominated by the Association of Municipalities of Ontario). Both terms are effective January 1, 2016 for a period of three years.
 

September 22, 2015

Strategic Planning

The OMERS Sponsors Corporation (SC) and the OMERS Administration Corporation (OAC) Boards participated in the fourth annual joint strategic planning session to discuss the final details of a joint strategic plan developed and refined over the previous months.  The final approval of the plan will be discussed at the October 2015 SC Board and OAC Board meetings.

Strategic Planning

The OMERS Sponsors Corporation (SC) received further reports on several issues and ideas contemplated under the 2015 strategic planning exercise. Additional direction was provided to management in preparation for the joint strategic planning session in September.

Governance

Budget & Expense Management

The OMERS Sponsors Corporation (SC) concluded that it will not be necessary to implement a levy in the foreseeable future.  In addition, the SC will no longer fund the costs of SC Members who incur expenses related to the supplemental decision-making mechanism provided for by the OMERS Act.  This change provides a further incentive to avoid supplemental decision-making.

With this change and related measures developed in collaboration with the OMERS Administration Corporation, the SC has concluded that it is not necessary to levy plan members and employers at this time. Please see February 19, 2015.

Should the circumstance arise that a levy must be implemented at some time in the future the SC will provide as much advance notice as possible.

Strategic Planning

The SC received further reports on several issues and ideas contemplated under the 2015 strategic planning exercise.  Direction was provided to management but the SC was not asked to make decisions at this early stage.

Governance

Budget & Expense Management

The OMERS Sponsors Corporation (SC) continued to explore practical alternatives for establishing permanent funding arrangements given that that unused grant funds were returned in March. See February 19, 2015.

Strategic Planning

The SC received an initial report on several issues and ideas contemplated under the 2015 strategic planning exercise.  Direction was provided to management but the SC was not asked to make decisions at this early stage.

Ontario Retirement Pension Plan (ORPP)

The SC received additional reporting related to the ORPP. The focus of the reporting was the potential implications for OMERS if the ORPP was applied ‘universally’ without the exemption for comparable plans as had previously been communicated.

Confidential

The April 13 meeting was called to deal with a single confidential matter.

Projection Valuations

The Board received further technical information related to the annual actuarial valuation for the Primary Plan and RCA. Various scenarios and analyses were discussed as they relate to the projected funded status of the OMERS Pension Plans.  This information assists the SC in managing the long-term health and sustainability of the Plan.

For the RCA, the annual update of the allocation threshold was presented and discussed.

(The RCA pays benefits over and above the maximum pension payable under the Primary Plan and it is currently funded on a modified pay-as-you-go basis to minimize the tax inefficiencies of such plans. The earnings level at which contributions are made to either the Primary Plan or the RCA [the ‘allocation threshold’] will vary each year based on the actuary’s projections, within a certain corridor, to ensure that the RCA maintains a fund of sufficient size that it would not be expected to be fully depleted for at least 20 years.)


Plan Change Decisions

Under its new decision-making process the SC considers whether there is a need for benefit or contribution rate changes based on the Funding Management Strategy it adopted in 2014.  The Funding Management Strategy outlines how benefits and contributions will be modified as the OMERS Primary Plan (the Plan) cycles through periods of deficit and surplus.

Although actuarial valuation shows that the Primary Plan is currently in the Deficit Management zone of the Funding Management Strategy, there is no requirement to make changes to the Plan.  The SC has decided not to consider changes this year.  The measures introduced in 2010 remain sufficient to manage the financial health of the Plan.

Beyond managing the financial health of the Plan, there are other reasons to change and evolve benefits, such as pension legislation developments or minor administrative matters.  In 2014, the SC received related input from stakeholders and received a report from the PDC on those plan change requests.  The SC decided to defer its decisions on these plan changes until 2016.  In the meantime, the SC directed PDC to continue to review the various related considerations.

 
Valuation Filing

The annual valuation of the OMERS Primary Pension Plan must be filed with the regulators every three years, and may be filed more frequently.  The SC decided to file the December 31, 2014 actuarial valuations with the regulators in respect of the Primary and Supplemental Plans.

 
Governance

Budget & Expense Management

The SC continued to explore practical alternatives for establishing permanent funding arrangements given that any unused grant funds would be returned shortly. Please see February 19, 2015.

Financial Results

As part of an annual process, the preliminary results of the December 31, 2014 actuarial valuations of the Primary Plan and the RCA were provided to the SC and OAC Boards on February 18.  The funded status of the OMERS Pension Plans at December 31, 2014 was reviewed in preparation for the Funding Management Strategy decisions which would be decided at the March 31 Board meeting.

The SC CEO was authorized to receive final 2014 Actuarial Valuations following approval by the OAC Board, which was expected in the days following the meeting.

The 2014 SC audited financial statements recommended by the Audit Committee were approved for inclusion in the 2014 Annual Report.
 

Governance

Budget & Expense Management

The SC continued to explore practical alternatives for establishing permanent funding arrangements given that any unused grant funds would be returned shortly.

Governance

One of the most important responsibilities of the SC is the appointment of directors to the OAC Board.  An OMERS Administration Corporation (OAC) Director, Lloyd Komori, resigned his seat effective December 31, 2014 creating a vacancy on the OAC Board.

Having received a nomination from the affected sponsor organization, the Corporate Governance Committee (CGC) conducted an interview with the nominee, with the participation of the OAC Board Chair, George Cooke.  The SC received a recommendation from the CGC to appoint the nominee and the SC approved the recommendation.

Penny Somerville will join the OAC effective immediately. When a vacant term is filled the appointee sits for the remainder of the affected term, in this case until December 31, 2016.

Governance

Grant Funds Status

In accordance with legislation, virtually all SC expenses are reimbursed from the Plan.  When it was created, the SC received grant funds from the Ministry of Municipal Affairs and Housing (MMAH) to pay for items not payable by the Plan, including start-up costs.
 
The agreement with MMAH indicated that unused grant funds would need to be returned.  The Ministry of Municipal Affairs and Housing directed the SC to return $1,000,000 before the end of April 2014, with the balance to be returned in early 2015.
 
The SC reviewed and approved the final agreement in preparation for returning the balance of the grant funds by the end of March 2015.