Meeting Summary

OAC Board – December 13, 2018

2019 Consolidated Annual Financial Operating Plan Recommendations

Each year, the OAC Board approves the Operating Plan and Benchmarks used by Management to assess financial performance in the year ahead.  Following discussion and as recommended by the Audit & Actuarial Committee at its meeting held on December 5, 2018 and by the Investment Committee at its meeting held on December 6, 2018, the OAC Board approved the 2019 Consolidated Operating Plan with a net projected income of $7.448 billion and a net return of 7.5%.

Primary Plan Subsidiary Risk Appetite Statements

Following the OAC Board’s approval of the Primary Plan Risk Appetite Statement on December 14, 2017, the Risk Oversight Committee worked with Management to develop the Primary Plan Subsidiary Risk Appetite Statements throughout 2018 to address elements of Pension Risk, Investment Risk and Operational Risk.

The OAC Board reviewed revised Subsidiary Risk Appetite Statements compared with the versions presented at the August 14, 2018 Board Education Session.  The changes made reflected the input received from the OAC Board and Committees during the August Board meeting cycle.

As recommended by the Risk Oversight Committee at its meeting held on October 22, 2018, the OAC Board approved the Primary Plan Subsidiary Risk Appetite Statements, effective January 1, 2019.

Statements of Investment Policies and Procedures

Based on the annual review of the Statements of Investment Policies and Procedures (SIPPs) by senior management and internal and external legal counsel, the OAC Board approved the Primary Pension Plan SIPP, the Supplemental Plan SIPP and the RCA SIPP, all effective January 1, 2019.  In accordance with OAC’s practice, these policies are posted on the OMERS website.

Risk Framework

The concept of developing a Risk Framework arose from the need to better understand how all the various aspects of risk management – such as policies, procedures, roles and responsibilities, risk categories and metrics – fit together across OMERS.  The Risk Framework will assist in effective management, communication and oversight of risk by articulating OMERS approach to managing risk and by identifying the material risks to which OMERS is exposed. The Risk Framework was proposed as a replacement to the existing Board-approved Enterprise Risk Management and Investment Risk Management Policies.

As recommended by the Governance Committee at its meeting held on November 14, 2018, the OAC Board approved the Risk Framework, effective January 1, 2019 and repealed the Enterprise Risk Management Policy and the Investment Risk Management Policy, effective December 31, 2018.

Risk Management Mandate Review

A mandate for the Risk Management Group was originally approved in 2015 and has been reviewed annually by the Governance Committee.  The purpose of the mandate is to make clear the roles and responsibilities of the function and having such a mandate is considered a leading practice.

The mandate was updated to include modifications reflecting the evolution of the Subsidiary Risk Appetite Statements and reporting, as well as organizational changes.

As recommended by the Governance Committee at its meeting held on November 14, 2018, the OAC Board approved the Risk Management Mandate, effective January 1, 2019.

Board and Committee Mandate Review

The Governance Committee annually reviews all Committee mandates and the Board Mandate to assess the full package of Board-level responsibilities and how they fit together.

All Committees reviewed their respective 2018 mandates and proposed several changes which were forwarded to the Governance Committee for review at its November 14, 2018 meeting, with the objective of the Governance Committee making a comprehensive recommendation to the OAC Board regarding all mandates.

As recommended by the Governance Committee at its meeting held on November 14, 2018, the OAC Board approved amended Board, Management and Committee mandates, all effective January 1, 2019. Mandates are posted to the OMERS website.

OAC Board Committee Membership for 2019

In accordance with the Board Chair Role Description contained in the OMERS Governance Manual, a key responsibility of the OAC Board Chair is to develop a recommendation for Board and Committee leadership roles.  In accordance with the Board Committee Operational Guidelines, the OAC Board Chair is to propose Committee membership to the OAC Board annually in December.

The OAC Board Chair consulted with the Governance Committee at its meeting on November 14, 2018 prior to recommending the 2019 Board leadership positions and Committee membership to the OAC Board for approval.

Following discussion, the OAC Board approved the recommendations of the OAC Board Chair for the appointment of the Chairs and members of the Standing Committees for 2019. Committee composition is posted on the OMERS website.

Renewal of Retainer – Independent External Counsel to OAC Board

In 2008, the OAC Board retained Fasken Martineau Dumoulin to act as its independent legal counsel to provide advice in circumstances where the Board required legal advice independent of Management, or to act as a resource for individual Board members requiring advice in the performance of their duties. The appointment was renewed in 2012 and 2016. The OAC Board was asked to extend Fasken Martineau Dumoulin’s appointment until December 31, 2020.

The OAC Board approved the extension of the retainer of the law firm of Fasken Martineau as independent board counsel until December 31, 2020.

HR Matters

Following discussion, and as recommended by the Human Resources Committee at its meeting held on December 6, 2018, the OAC Board approved the following items:

  • 2019 CEO Role Description and Core Competencies;
  • 2019 CEO Total Compensation Target; and
  • an amended 2019 CEO Performance Scorecard.