Vestcor Corp., an independent pension, benefits and investment management organization, has been created by the trustee boards of New Brunswick’s Public Service Share Risk Plan, which covers most employees in the provincial civil service and the New Brunswick Teachers’ Pension Plan.
Currently a legal entity, Vestcor aims to fully launch on October 1, when the New Brunswick Investment Management Corporation will become Vestcor Investment Management Corporation, and the Pensions and Employee Benefits Division will become Vestcor Pension Services Corporation.
When the New Brunswick Teachers’ Pension Plan and the province’s Public Service Shared Risk Plan were established in 2014, responsibility for governance and operation moved from the provincial government to the plans’ boards of trustees. Yet the province continues to provide administration and investment management through service agreements. The New Brunswick Investment Management Corporation is responsible for the plans’ investments and the pension and employee benefits division of the Department of Human Resources oversees the plans’ administration.
Since both service providers are controlled by New Brunswick but are accountable to their clients, conflicts of interest have arisen, according to a news release the province. It also noted that the service providers are poorly positioned to attract new clients, which could reduce all plans’ costs through economies of scale. Vestcor Corp. has been created to address both problems.
“The Vestcor companies will be cost-efficient, independent service providers,” Larry Jamieson, chair of the board of trustees for the Teachers’ Plan, said in the release. “The new structure will provide flexibility in adding other public sector clients requiring administration or investment management services, which would serve to create even further efficiencies.”
The New Brunswick Investment Management Corporation manages $13 billion of pension assets and other public capital. The pension and employee benefits division of the Department of Human Resources administers daily operations of 11 pension plans, and the benefits programs for 55,000 active and 30,000 retired provincial government workers.