Public sector union pressuring PSP to ‘pull out’ of all long-term care investments

The Public Service Alliance of Canada is reiterating a call for its pension investment manager to divest its ownership in Revera Inc. over the company’s safety record during the coronavirus pandemic, saying the fund should “pull out of the business of long-term care” altogether.

The public sector union, which represents 140,000 public sector pension plan members, first said in May that for-profit long-term care homes run by Revera should no longer be wholly owned by the Public Sector Pension Investment Board. Instead, the union says the homes should be managed by the public sector in order to protect both residents and pension funds.

Read: Public sector union calling on PSP to end investment in long-term care operator

After outbreaks at several of its facilities earlier this year, Revera on Monday released a report on how it had handled the first wave of the pandemic. The findings included shortcomings from public health officials, doctors, hospitals and workforce shortages as some of the reasons the novel coronavirus spread in its homes.

Calling the report a “slick corporate public relations exercise,”Chris Aylward, PSAC’s national president, said his members remain concerned by their pension plan’s ownership of Revera and “reiterate their call for the federal government to facilitate the transition of Revera to public hands as a first step toward a national, fully publicly-funded long-term care system.”

Revera has 74 long-term care homes with about 9,400 residents across four provinces. Between March and September, the novel coronavirus infected 874 Revera residents and killed 266 and the company has reported several additional outbreaks this fall. Since September, more than 40 Revera homes have reported outbreaks, according to its website. Revera’s focus is “squarely on caring for our residents and containing the spread of the virus,” said Revera vice-president of corporate affairs Susan Schutta.

Read: Considerations for institutional investors around divestment

In May, Aylward wrote a letter to the chief executive of the PSP stating that continuing business as usual “would not only be detrimental to the residents and employees of Revera Inc. but could also pose long-term consequences for the contributors and beneficiaries” of the pension plan.

Revera faces two proposed class actions over its handling of the coronavirus crisis, with claims totalling $125 million. Neil Cunningham, president and chief executive officer at the PSP, said at a town hall earlier this year that it doesn’t believe the suits have merit and that they were not reason enough to consider divesting from the long-term care business.

He added at the meeting the PSP would exit the investment in the future if it wasn’t “proud” of the care provided in long-term care homes, but said that the PSP’s governance of Revera was robust. Although the PSP has a presence on Revera’s board, the long-term care company said it’s independently operated and does not ask the PSP for funding or input on management.

The PSP said it remains committed to Revera’s board and leadership team. A statement provided by the PSP said it’s watching Revera’s management of the pandemic closely, but that the pension fund’s confidence in staff has not been shaken. PSP added it’s committed to working with all levels of government to “find the right solution for the long-term care industry and discuss lessons learned from the pandemic.”

But, Aylward said, “it doesn’t look very good when a federal Crown corporation that manages the pension plan for federal public sector workers owns a lot of these long-term care homes across the country.”

Read: Pension plans focusing on ethical, responsible investing