OPSEU Pension Plan to be exempt from asset pooling recommendationPosted: November 19, 2012
November 19, 2012 - The OPSEU Pension Plan will be exempted from a recommendation to pool investment management of the assets of small and medium-sized public sector pension plans in Ontario.
The recommendation on asset pooling is contained in a report released on November 16 by Ontario's Ministry of Finance. The report was prepared by William Morneau, who was appointed as a special pension advisor to the Minister of Finance this spring.
The report also recommends the establishment of a new Ontario Investment Management Corporation to invest pooled assets on behalf of participating pension plans and other public sector investment funds.
The Morneau report identifies the OPSEU Pension Plan as one of many potential candidates for asset pooling. However, in October, the Plan was exempted from any such arrangement under the terms of a funding framework agreement between OPSEU and the Government of Ontario, in their role as the Plan's sponsors.
As a result, OPTrust will continue to be responsible for managing the Plan's $13.7 billion investment fund to help ensure the security of the pension promise made to the Plan's members and retirees.
The funding framework agreement also freezes pension contribution rates and benefit improvements for the next five years and sets out principles that will be applied if the Plan experiences a funding deficit during the freeze period.
With assets of $13.7 billion, the OPSEU Pension Trust (OPTrust) invests and manages one of Canada's largest pension funds and administers the OPSEU Pension Plan, a defined benefit plan with almost 84,000 members and retirees. OPTrust was established to give plan members and the Government of Ontario an equal voice in the administration of the Plan and the investment of its assets, through joint trusteeship. OPTrust is governed by a 10-member Board of Trustees, five of whom are appointed by OPSEU and five by the Government of Ontario.