CANADA - The Ontario Municipal Employees Retirement System (OMERS) has been cleared by the regulator after complaints regarding the fund's investment in Borealis Capital Corporation.
The Financial Services Commission of Ontario (FSCO) has been examining OMERS for the past three years, regarding allegations about the relationship between OMERS and Borealis Capital Corporation between 1997 and 2004.
This followed allegations relating primarily to contracts and payments associated with OMERS's decision to outsource asset management of its real estate, infrastructure and private equity investments to Borealis and then bring asset management in-house in 2004.
David Kingston, chair of the OMERS administration corporation board, said: “The regulator makes no findings that OMERS wasted pension plan money in outsourcing and subsequently repatriating asset management of real estate, infrastructure and private equity investments.”
Kingston added: “A reputational shadow has now been lifted over a very successful pension plan that has faithfully fulfilled its obligations to plan members.”
According to OMERS, the asset management of private equity, real estate and infrastructure by Borealis prior to 2004 and subsequently had been a great success, creating billions of dollars of investments. The assets currently represent about 25% of the approximately $50bn total fund.
OMERS has made many governance improvements since 2002 acknowledged by the FSCO report: including an internal audit department; an internal legal department; and an internal compliance office. Requiring board members to earn university accreditation as directors was also cited as an improvement.
Partner Insight: Members' evolving needs and expectations are driving changes in scheme administration. As the pensions landscape inevitably continues to change, how will your scheme's approach need to develop to keep pace?
The Pensions Regulator (TPR) is "working closely" with government contractor Interserve and the trustees of its defined benefit (DB) pension schemes, it has confirmed.
The industry has welcomed the Department for Work and Pensions' (DWP) consultation on defined benefit (DB) consolidation as a way to address scheme covenant issues.
BMO Global Asset Management has opened a UK fiduciary management business, promising a "truly open architecture" approach to deliver "better client outcomes".