CANADA - An Ontario union has pledged CAN$10,000 to support legal action by the Canadian Union of Public Employees (CUPE) Ontario against the Ontario Municipal Employees Retirement System (OMERS).
The executive board of the Ontario Public Service Employees Union (OPSEU) voted unanimously to support the action against OMERS and three of its managers who its is claimed were unjustly enriched at the expense of pension plan members.
CUPE Ontario is seeking CAN$60m in damages from the three managers, to be returned to the pension fund.
“This pension money belongs to all the workers in the plan, not the plan management,” said OPSEU president Leah Casselman. “That’s why we’re supporting this action, and why we also support a joint trusteeship model for OMERS.”
The lawsuit, lodged with the Ontario Superior Court of Justice, seeks a declaration that the pension fund and its board were in breach of their trust and fiduciary duties to members and acted negligently by allegedly entering into imprudent real estate transactions with Borealis Capital and Borealis Real Estate.
Over an 18-month period, the union claims OMERS outsourced management of its real estate to Borealis Capital, which it is alleged to have paid the pension fund an “undervalued CAN$11m” and hired OMERS employees to do the work. The claim alleges OMERS subsequently repatriated the management function, paying Borealis shareholders – including the three managers – CAN$50m for return of its own assets.
OPSEU represents about 3,000 OMERS members.
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