The ballroom at the Fairmont Royal York in Toronto was packed on Wednesday morning as representatives from the Ontario Expert Commission on Pensions (OECP), Watson Wyatt and Blakes teamed up for a breakfast seminar to discuss the findings of the long-awaited and anticipated report.
The chairman, Harry Arthurs, opened the morning presentation by explaining that the OECP’s mandate was to focus on workplace pensions, defined benefit (DB) plans, and on long-term system design, not the short-term challenges.
He admitted that not everyone was going to agree with all 142 recommendations he made but said light-heartedly, “If there are things in this report that not everyone likes, I am the guy responsible.”
Arthurs added that “the system has to suit everybody. It has to be fair and balanced.” Research done by the committee showed that the majority (69%) of single-employer, self-administered DB plans were jointly and member governed. Consequently, either indirectly through the negotiation of a collective bargaining agreement (CBA), or directly through their representatives on boards of trustees, active plan members typically have an opportunity to influence plan design and decision-making. Only about 20% of DB active plan members are found in workplaces in which the employer both sponsors and administers the plan. The other 11% were in single-employer DB plans with no CBA.
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While not all plan types were included in this research Arthurs said, “If you include all kinds of plans…these numbers change but not a whole lot. The system’s membership isn’t where we think it is.” Arthurs used this data to focus the report.
Jeff Kissack, senior consultant, retirement practice with Watson Wyatt, felt that this report wasn’t as fair and balanced as he had hoped it would be, however there was a lot that he agreed with in the report and addressed issues that he felt should have more prominence.
For example, he would have liked to have seen recommendations like: solvency gains to be used to lower future contributions, not just shorten the amortization period; relax the retirement assumption for commuted values; and eliminate funding for grow-in.
The other presenters and panelists—Ian Markham, Karen DeBortoli and David Burke of Watson Wyatt, and Kathryn Bush, Randy Bauslaugh and Jeremy Forgie of Blakes—commented on the recommendations and not surprising, all had their own opinions of what they would like to see happen and what needs more clarity. Overall, the recommendations were well received by this group and expect that most people will feel the same way. “In my view, these are really good recommendations,” said Randy Bauslaugh, a partner with Blakes. “It’s a gold standard of something that [we should] want to achieve. This all looks positive to me [and is a] positive approach to the system.”
But, despite what these experts thinks—it’s a game of wait-and-see. The provincial government is accepting written comments on the report until Feb. 27, 2009 and has said it’s committed to introducing new legislation but has not given a timeline.
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