Members of the Royal Ontario Museum pension plan have chosen to join the Colleges of Applied Arts and Technology pension plan.
The merger is the first of its kind to use Ontario’s new regulations, which came into effect November 1, 2015, permitting the conversion and transfer of assets from a single-employer pension plan in the broader public sector to a jointly governed, multi-employer pension plan.
A 45-day information and voting process concluded on December 21, 2015, and ROM employees began earning pension benefits in the CAAT Plan on January 1, 2016.
“We’re delighted to welcome members from the venerable Royal Ontario Museum and I’m pleased that they have chosen to join the CAAT Plan, which is a well-funded, sustainable pension plan offering valuable and secure benefits at stable and appropriate contribution rates,” said Derek W. Dobson, CEO and plan manager at the CAAT Pension Plan.
“For the ROM, the merger lowers the costs and risks associated with running a single employer pension plan, and moves the complexity of pensions to a more sustainable joint governance structure.”
Under the general conditions of the merger, the ROM’s 640 active, retired and deferred pension members will receive a pension based on the ROM plan provisions for their service accrued to December 31, 2015, and a pension based on CAAT Plan provisions for service accrued after that date.
The ROM pension plan was operating under a temporary solvency funding exemption, which would have expired in 2017 and increased its pension contributions. Under the funding rules for single employer pension plans, ROM pension costs would have increased significantly.
As a multi-employer pension plan, the CAAT Plan has a different risk profile than single employer pension plans, such as the ROM, and it is managed by pension experts to provide secure benefits.
“The merger means the ROM will be able to spend much less time and resources on pensions and more on what we do best while continuing to offer our dedicated employees a valuable pension benefit,” said Mark Engstrom, interim director and CEO, deputy director, Collections & Research at the ROM.
“The merger process has been a rousing success and I’m thankful for the time and effort the team from the CAAT Plan has put into educating our staff and retirees of the options before them.”