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.
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.
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.