CANADA - The Ontario government has proposed new legislation that would hand the governance of the CAN$35.7bn Ontario Municipal Employees Retirement System (OMERS) directly to the fund.
Currently, the government is the plan sponsor, appointing board members and having the final say on benefit changes.
The Bill, introduced in parliament by John Gerretsen, minister of municipal affairs and housing, would see an independent corporation - the OMERS Sponsors Corporation - established to govern the OMERS pension plans. The fund would remain subject to the legal and regulatory framework covering pension funds in the province.
OMERS chair Frederick Biro applauded the move: “The Board of Directors is pleased that the government is moving forward on this issue,” he said.
“The Board has sought an autonomous governance model for OMERS for many years, as it will allow OMERS to operate more effectively in the interest of members, while maintaining a secure environment for pensions.”
The new model would create a clear separation of the sponsor and fiduciary roles in the governance of the plan. OMERS said it believed autonomy would speed up the implementation of plan changes and provide greater flexibility, putting the fund “on par” with other major public sector plans in Ontario.
Under the proposed legislation, the sponsors corporation would have the power to make decisions on the plan design, set the contribution rates and appoint members of the OMERS board.
Two committees would be set up to advise the sponsors corporation about benefits for OMERS members - one for those in the police and fire sectors and one for those not employed in those sectors.
Paul Haggis, president and CEO, said the proposed change would have no effect on the fund’s investment strategy or commitment to its business partners.
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