OMERS’s new chief, Michael Nobrega, remains steadfast in the face of the pension plan’s two-board structure and a FSCO investigation.

A new governance structure was brought in at OMERS last year, including the creation of two boards—one for plan design and contribution rates, the other for pension administration and investments. What are the challenges in facilitating this structure?

MN: The biggest challenge is developing a communication strategy to describe the responsibilities of the Administration Corporation(AC)and the Sponsors Corporation(SC), as their roles and responsibilities are quite different. The next challenge is to ensure that the actual(separate)activities of the two entities are carried out in a collegial manner and work in the best interest of the beneficiaries of the plan— after all, there is only “one beneficiary.”

Is this the right governance structure for OMERS?

MN: Yes. The duties and responsibilities of the two entities are clearly defined— the AC is responsible for investments and plan administration, and the SC for plan design and contribution rates. The launch of the SC will take time, but the AC will be there to provide administrative assistance, as permitted by the legislation.

Some would say that a board comprised of employer and plan member representatives doesn’t provide the expertise needed to make complex investment decisions.

MN: This has not been my experience. The AC board is a very active board and brings a fair amount of common sense to decisions. The investment record over the last 35 years has been stellar, with the plan growing from $400 million to $49 billion today—a good chunk of it from investment returns. I know that the press makes a big issue about the lay board, but they’ve never sat down at a board meeting and listened to the debates. They’re assuming that because [board members] come from member associations like the police or firefighters or school administration that they’re not intelligent or they can’t make those decisions.

Do you plan to maintain the investment strategy put forth by Paul Haggis in the last few years?

MN: The strategy that OMERS follows right now was probably started back in 2001 when it undertook a study to change its asset mix. And the board came up with 62.5% in public investments and 37.5% in alternative investments. That policy was formally crystalized in early 2003. Paul inherited that strategy and yes, he continued that strategy. There are no plans to change our asset mix strategy at the present time.

What is the current status of the Financial Services Commission of Ontario’s(FSCO) investigation into outsourcing contracts at OMERS?

MN: FSCO did issue a report at the end of February. We have 60 days to respond and provide submissions—after which the report will be finalized. We have agreed that the final report will be released to the stakeholders. [Probably at the] end of June.

What impact do you think the report would have on your introduction as CEO?

MN: I am fully confident that the findings in the final report will not put a cloud on the leadership. If it did, I would not have taken the job.

Why do you think the board felt you were the right person for the job?

MN: You gotta ask them. [laughs] As we go through this transition into the two boards and work through the FSCO stuff, I’d hope they’d say we need a delicate hand to manage the various stakeholders and get them there. I hope they’d say that’s why they selected me because they saw my delicate hand at Borealis.

Don Bisch is editor of BENEFITS CANADA. don.bisch@rci.rogers.com

Brooke Smith is assistant editor of BENEFITS CANADA. brooke.smith@rci.rogers.com

For a PDF version of this article, click here.

© Copyright 2007 Rogers Publishing Ltd. This article first appeared in the May 2007 edition of BENEFITS CANADA magazine.

 

Copyright © 2020 Transcontinental Media G.P. This article first appeared in Benefits Canada.

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