The Ontario government is being urged to rework an unwieldy governance structure at one of the province\u2019s largest pension funds after representatives for police and firefighters complained of a breakdown in transparency and efficiency. <\/p>\n
The province released the results late Wednesday of a review it commissioned last year to improve governance at the Ontario Municipal Employees Retirement System (OMERS), which manages $141-billion for 640,000 public-service workers.<\/p>\n
Pension expert Robert Poirier, the special adviser chosen to lead the review, makes 33 recommendations to the Minister of Municipal Affairs and Housing, Rob Flack.<\/p>\n
Chief among them is that the province should dissolve one of OMERS\u2019s two boards, known as the Sponsors Corporation, and replace it with a new \u201csponsors council,\u201d which would add five non-voting members to the 14-member body.<\/p>\n
The change would eliminate the large and expensive corporate structure that supports the Sponsors Corporation, which has its own staff and fiduciary duties. <\/p>\n
In its place, it would create a simpler, more streamlined council supported by the sponsors\u2019 own resources. The council would be directly accessible to all of the plan\u2019s members, giving them more visibility and input into how OMERS is governed. <\/p>\n
That is expected to save OMERS an estimated $10-million each year and create a more focused and transparent leadership structure, the report says. <\/p>\n
The report\u2019s recommendations would preserve the current division of duties, with the Sponsors Corporation (SC) \u2013 or sponsors council, if that change comes to pass \u2013 setting the plan\u2019s contribution rates and benefits for plan members, and an independent, 15-member Administration Corporation (AC) board administering the plan and investing its assets.<\/p>\n
The unusual, two-tier board structure at OMERS dates back to a 2006 restructuring. In addition to setting contributions and benefits, the SC board has also been responsible for making appointments to the AC board.<\/p>\n
\u201cFaced with a governance structure that has failed to adapt and evolve since 2006, the proposed amendments in this report aimed to realign the governance model with its original intent,\u201d Mr. Poirier said in the report. <\/p>\n