Meeting Summary

OAC Board – February 22, 2019

2019 OAC Board Work Plan

The mandate of the OAC Board requires the Board to establish its work plan annually.  The OAC Board work plan functions as a checklist to satisfy the responsibilities of the Board as delegated to it by the Board-approved mandate.

The OAC Board approved its 2019 Work Plan, which was prepared to comply with the OAC Board Mandate approved by the Board at its meeting held on December 13, 2018.

2018 Valuation of the OMERS Primary Pension Plan

Each year, Willis Towers Watson prepares an actuarial valuation report for the Primary Plan.

As recommended by the Audit & Actuarial Committee at its meeting held on February 8, 2019, the OAC Board approved the following:

  • the actuarial methods and assumptions for the Primary Plan; and
  • the annual actuarial valuation of the Primary Plan.

2018 Valuation of the Retirement Compensation Arrangement for the OMERS Primary Pension Plan

Each year, Willis Towers Watson prepares an actuarial valuation report for the Retirement Compensation Arrangement (RCA) for the OMERS Primary Pension Plan.

As recommended by the Audit & Actuarial Committee at its meeting held on February 8, 2019, the OAC Board approved the following:

  • the actuarial methods and assumptions for the RCA; and
  • the annual actuarial valuation of the RCA.

2018 OMERS Primary Plan and Supplemental Plan Valuation Regulatory Filings

Each year, Willis Towers Watson prepares an actuarial valuation report for the OMERS Primary Pension Plan (Primary Plan) and, if applicable, an actuarial valuation report for the OMERS Supplemental Pension Plan for Police, Firefighters and Paramedics (Supplemental Plan).

Pursuant to its mandate, the Audit & Actuarial Committee recommends to the OAC Board whether the Sponsors Corporation should file these actuarial valuations with the applicable regulators.

As recommended by the AAC at its February 8, 2019 meeting, the OAC Board approved the following:

  • the recommendation to the Sponsors Corporation to file the actuarial valuation of the Primary Plan with the applicable regulators;
  • no recommendation to the Sponsors Corporation to file a December 31, 2018 actuarial valuation of the Supplemental Plan with the regulators; and
  • the recommendation that the Sponsors Corporation consider filing a valuation report for the Supplemental Plan after the completion of the 2019 contribution rate study and the SC’s adoption of any revised contribution rates.

2018 Audited Financial Statements, Management Discussion and Analysis, and Press Release

With respect to financial reporting, Section 21 of the OMERS Act, 2006, requires that OAC prepare a report on the affairs of the OMERS Pension Plans during the preceding year containing a copy of the audited financial statements and that OAC shall give a copy of the annual report to every employer participating in the Pension Plans and to any member, former member or retired member of the Plans who requests it.

Pursuant to its mandate, the Audit & Actuarial Committee is to recommend to the OAC Board approval of the following:

  • annual audited financial statements; and
  • management discussion and analysis content to be included in OAC’s Annual Report and other material public announcements regarding financial matters.

As recommended by the Audit & Actuarial Committee at its meeting held on February 15, 2019, the OAC Board approved the following:

  • OMERS Administration Corporation’s 2018 consolidated financial statements and Audited Financial Statements – Administered Funds;
  • the management discussion and analysis (MD&A) and the Front Section included in OMERS 2018 Annual Report and other material public announcements regarding financial matters; and
  • the press release with respect to the 2018 results.

Compensation Discussion and Analysis (Annual Report)

The Human Resources Committee mandate requires the Committee to recommend to the OAC Board compensation-related disclosure in public documents such as the OAC Annual Report.

Each year the OMERS Annual Report includes a section on executive compensation which covers the compensation and pension values earned to the end of December 31 of the respective performance year for the CEO, CFO and the three other most highly compensated executive officers with policy-making accountability.

As recommended by the Human Resources Committee at its meeting held on February 20, 2019, the OAC Board approved the 2018 Compensation Discussion and Analysis for inclusion in the Annual Report.

2018 OAC Board Remuneration and Attendance Report (Annual Report)

For the past several years, the Governance Committee has reviewed and recommended to the OAC Board the governance portions of the Annual Report, in a similar manner as the Audit & Actuarial Committee reviews the financial statements and MD&A and the Human Resources Committee reviews the Compensation Discussion & Analysis.

There are two main areas in the Annual Report that deal with governance matters – in the report dealing with Board remuneration and attendance, and in the overall narrative.

As recommended by the Governance Committee at its meeting held on February 21, 2019, the OAC Board approved the 2018 OMERS Administration Corporation Board Remuneration and Attendance Report for inclusion in the 2018 Annual Report.

Future Committee Structure

At its August 15, 2018 meeting, the Governance Committee discussed the Board Chair’s views on the potential for revamping and consolidating the OAC Board Standing Committee structure in 2019.

With the restructuring of the LEAP program, the Governance Committee discussed advancing one phase of the proposed restructuring, which would be to consolidate the Technology Committee’s responsibilities into an enhanced Governance Committee.  This involves assigning the core Technology Committee mandate matters to the Governance Committee, adding several of the Technology Committee members to the Governance Committee, and making several corresponding amendments to OAC By-laws and Mandates.

The Governance Committee also discussed the future of the Risk Oversight Committee.  Given its ongoing work, no changes to its mandate or structure were recommended; however, it was recommended that the meetings of the Risk Oversight Committee and the Governance Committee be rescheduled so that the Risk Oversight Committee meets immediately before the Governance Committee at the May, August and November meeting cycles.

The Board Chair reviewed his recommendations for modifications to Committee membership.

As recommended by the Governance Committee at its meeting held on February 21, 2019, the OAC Board approved the following:

  • disbandment of the Technology Committee, effective March 1, 2019, and the revocation of the Technology Committee Mandate;
  • increase in composition of the Governance Committee to 7 Directors, effective March 1, 2019;
  • amendment of the Governance Committee mandate to include former Technology Committee mandate responsibilities;
  • amendments to By-Laws No. 1 and No. 3 and the OAC Board Mandate, effective March 1, 2019, to remove references to the Technology Committee; and
  • the revised Board meeting schedules for May, August and December 2019.

As recommended by the Board Chair, the OAC Board approved the appointment of Charlene Mueller and Yung Wu to the Governance Committee and the appointment of Michael Fenn to the Audit & Actuarial Committee, effective March 1, 2019.

Related Party Transactions Review Policy

The Related Party Transactions Review Policy applies to a subset of related party transactions that are considered to be of higher risk.  These involve investment transactions and outsourcing processes where current or former directors or officers have a substantive interest, or transactions that involve organizations that nominate directors to the OAC Board.  This policy has been in place since 2011 and was substantially updated in 2016; it was due for its triennial review.

A number of minor clarifications to the Policy were recommended.

As recommended by the Investment Committee at its meeting held on February 20, 2019, the OAC Board approved the revised Related Party Transactions Review Policy, effective March 1, 2019.

HR Matters

Following discussion, and as recommended by the Human Resources Committee at its meeting held on February 20, 2019, the OAC Board approved the 2018 CEO compensation awards and payments and the revised 2019 CEO Performance Scorecard.