Meeting Summaries

OMERS is active in reporting to plan members and employers on how their contributions are managed and invested. The Board of OMERS Administration Corporation holds meetings each year with plan members and maintains frequent contact through meetings with member groups, the annual report, website, regular newsletters, benefit statements, presentations and correspondence. 

As part of its commitment to transparency to plan members, OAC has established a Communications Policy PDF [300KB] which includes guidelines for reporting on the decisions that the OAC Board and its committees make that affect plan members.

2020 Meeting Summaries

Acquisition of Interest in Deutsche Glasfaser 

OMERS Infrastructure sought the approval of the Investment Committee to acquire an interest in Deutsche Glasfaser, a leading provider of gigabit internet connections through fiber-to-the-home (“FTTH”) across Germany.  Deutsche Glasfaser will be combined with EQT Infrastructure IV portfolio company inexio to form a leading FTTH player in rural Germany.  EQT Infrastructure will own 51% in the combined group and OMERS will own 49%.

Following questions and discussion, the Investment Committee approved the acquisition.

In a press release issued February 10, 2020, OMERS and OMERS Infrastructure announced its acquisition of a 49% interest in Deutsche Glasfaser from KKR Infrastructure and Reggeborgh.  The transaction is expected to close in Q2 2020, subject to customary regulatory approval.

A special meeting of the Investment Committee was called to consider an investment transaction.  Due to legal and contractual reasons, the decision is required to be kept confidential.

The Human Resources Committee reviewed a matter and made a recommendation to the Board, but no final decisions were made by the Committee at the meeting.

2019 Meeting Summaries

Confirmation of Appointment of Officers

To facilitate compliance reporting and certification requirements in other jurisdictions, the AC has found it useful to summarize the current senior officers of the corporation in an annual confirmatory resolution.  Also, to facilitate the signing of certificates and powers of attorney, it is useful to appoint various corporate counsel as assistant corporate secretaries.

The AC Board approved a resolution, effective January 1, 2020, that gave effect to this intention.

2020 Consolidated Annual Financial Operating Plan Recommendations

Each year, the AC 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 4, 2019 and by the Investment Committee at its meeting held on December 5, 2019, the AC Board approved the 2020 Consolidated Operating Plan with a net projected income of $7.404 billion and a net return of 6.9%.

2019 Asset-Liability Study

The objective of the Asset-Liability Study is to ensure that assets are sufficient to meet long-term pension obligations.  The 2019 Study incorporated several changes compared to previous studies.

As recommended by the Investment Committee at its meeting held on November 12, 2019, the AC Board approved the OMERS Primary Plan asset allocation targets and ranges, effective January 1, 2020, consistent with the conclusions of the 2019 Study.

Statements of Investment Policies and Procedures

The Pension Benefits Act (Ontario) (the PBA) requires the AC Board to establish a Statement of Investment Policies and Procedures (SIPP) for each of the Primary Plan and Supplemental Plan and that these statements be reviewed annually.  The Primary Plan SIPP and the Supplemental Plan SIPP were last approved by the AC Board on December 13, 2018.

Although not required by the PBA, the AC Board has also established a SIPP for the RCA which was last approved by the AC Board on December 13, 2018.

Based on the annual review of the Statements of Investment Policies and Procedures (SIPPs) by senior management and internal and external legal counsel, and as recommended by the Investment Committee at its meeting on November 12, 2019, the AC Board approved the Primary Pension Plan SIPP, the Supplemental Plan SIPP and the RCA SIPP, all effective January 1, 2020.  In accordance with AC’s practice, these policies are posted on the OMERS website.

Statement of Investment Authorities

The Statement of Investment Authorities (SIA) provides a comprehensive delegation of investment decision-making authority from the AC Board to the Chief Executive Officer.  The Investment Committee has responsibility for reviewing this policy and recommending it to the full AC Board for final approval.

The changes to the SIA reflected editorial clarifications on policy exceptions.

As recommended by the Investment Committee at its meeting on November 12, 2019, the AC Board approved the revised Statement of Investment Authorities, effective January 1, 2020.

Statement of Investment Beliefs and Sustainable Investing Policy

The Statement of Investment Beliefs (SIB) provides a high-level description of a set of core principles that guides investment activity at OMERS.  The SIB was last reviewed and updated in 2016.  In addition, the AC Board approved a Sustainable Investing Policy (SIP) in March 2019 that provides a coordinated approach to OMERS long-term sustainable investment considerations around environmental, social and governance practices.  The AC Board directed that the SIP be reviewed annually by the Investment Committee at the same time that the Committee considers the Statements of Investment Policies and Procedures and the Statement of Investment Beliefs so that the Committee can provide an integrated and holistic recommendation to the AC Board on these key investment governance policies.

Management did not recommend any substantive changes to either of these policies.

Following discussion, the Board requested one minor revision to the SIP.

The AC Board approved the revised Statement of Investment Beliefs and the revised Sustainable Investing Policy, both effective January 1, 2020.  In accordance with AC’s practice, these policies are posted on the OMERS website.

Primary Plan Risk Appetite Statement

Management has worked with the Risk Oversight Committees of both Boards to evolve the Primary Plan Risk Appetite Statement (RAS) and incorporated updates related to the 2025/2030 Strategy.  With the support of the AC Risk Oversight Committee, Management was recommending Board approval of the Primary Plan RAS in December 2019 because it was likely that the SC would not approve the RAS until February 2020 and there may be potential modifications arising from the SC’s further contemplations.

As recommended by the Risk Oversight Committee at its meeting held on November 12, 2019, the AC Board approved the revised Primary Plan Risk Appetite Statement, effective January 1, 2020, subject to consideration of such changes as may be approved by the SC Board following completion of its review of the Primary Plan RAS.  The AC Board also directed Management to report to the Risk Oversight Committee on any changes to the Primary Plan RAS as may be approved by the SC Board together with a plan to reconcile any such changes into the Primary Plan RAS as approved by the AC Board.

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 revised Risk Framework was updated based on input from each of the OMERS SC and AC Risk Oversight Committees.

As recommended by the AC Risk Oversight Committee and the AC Governance Committee, at their meetings on November 12 and November 13, respectively, the AC Board approved the Risk Framework, effective January 1, 2020.

Risk Management Mandate Review

A Mandate for the Risk Management Group was originally approved in 2015.  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.

AC Management is of the view that it is good practice for the Risk Management Mandate to be reviewed and reassessed regularly.  Following this cycle, Management proposed to review the Mandate on a three-year cycle, with an opportunity to advance the review if circumstances warrant.  The updated Mandate reflects 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 13, 2019, the AC Board approved the Risk Management Mandate, effective January 1, 2020 and changed the review cycle of the Mandate from annually to at least every three years.

Board and Committee Mandate Review

Consistent with its responsibilities, 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 2019 Mandates at their recent meetings and proposed several changes which were then forwarded to the Governance Committee for review at its meeting on November 13, 2019, with the objective that the Governance Committee would make a comprehensive recommendation to the AC Board regarding all Mandates.  It was also timely to update the Board Mandate and the Management Mandate to ensure that they are consistent with current practices.

The Board requested a minor revision to the AC Board Mandate.

Following discussion and as recommended by the Governance Committee at its meeting on November 13, 2019, the AC Board approved amended Board, Management and Committee Mandates, all effective January 1, 2020.  Mandates are posted to the OMERS website.

Appointment of Standing Committees for 2020

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

The Board Chair confirmed that in setting the composition of the Audit & Actuarial Committee for 2020, a majority of the AAC members meet the standards of financial literacy or possess relevant actuarial or pension experience.  The Board Chair also noted that that there was a position pending on the Appeals Committee and that he intends to ask one of the new directors to fill that spot. This would be completed by February.

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

Funding Policy and Discount Rate Protocol – OMERS Primary Plan

The Primary Plan Funding Policy was last approved by the AC Board on August 18, 2016 with a scheduled renewal in August 2019.  At its August 14, 2019 meeting, the AAC deferred recommendation of approval of an updated policy by the AC Board until February 2020 to allow the SC to advance work on the risk appetite statement and Funding Management Strategy.

AC Management has updated the Funding Policy with the following content changes:

  • updated the Funding Risk and Funding Risk Management sections to reflect recent work on the joint risk appetite statement; and

  • updated the discount rate setting methodology to reflect the OMERS 2025 Strategy and the Discount Rate Protocol between the AC and SC.

As a result of discussions which took place at the Joint AC/SC Strategic Planning Session on October 9, 2019 a discount rate protocol was developed to provide more detail around considerations and consultations that will go into discount rate determination in line with the OMERS 2025 and 2030 Strategy, while recognizing the responsibilities of each Board and the interdependencies under the OMERS bicameral model.  The AC Board was asked to approve the discount rate protocol, which was also approved by the SC at its meeting on December 11, 2019.

Following discussion and as recommended by the Audit & Actuarial Committee on December 12, 2019, the AC Board approved the Funding Policy – Primary Plan, effective February 1, 2020 and the discount rate protocol, effective immediately.

The Audit & Actuarial Committee made a recommendation to the Board but no final decisions were made by the Committee at the meeting.

Acquisition of an Interest in RiverStone UK

OMERS Capital Markets sought the Investment Committee’s approval to acquire an interest in Fairfax’s UK run-off insurance group, RiverStone UK.  Riverstone holds non-life run-off insurance portfolios.

Following questions and discussion, the Investment Committee approved the acquisition.

In a press release issued on December 20, 2019, Fairfax Financial Holdings Limited announced that they entered into an agreement pursuant to which OMERS will acquire a 40% interest in RiverStone UK.

The transaction is expected to close in the first quarter of 2020 and remains subject to regulatory approval.

Additional Transactions

The Investment Committee also considered several additional pending investment transactions; however, due to legal and contractual reasons, the decisions are required to be kept confidential.

2020 Investment Return Ranges for Compensation Plans

The Human Resources Committee Mandate includes approval of all compensation plans for executive-level employees, which includes annual investment return ranges to ensure continued governance and oversight over the primary driver of compensation plans.

The methodology used to determine 2020 investment return ranges has not changed.

Based on the discussion held at the Joint Investment Committee and Human Resources Committee meeting on December 5, 2019, the Human Resources Committee approved the 2020 Investment Return Ranges for Compensation Plans, effective January 1, 2020.

Compensation Framework Refresh – Part 1

In 2019, OMERS engaged Willis Towers Watson (WTW) on a project to simplify compensation design globally, reduce volatility in compensation outcomes while continuing to pay for performance, and create flexibility for leaders to apply judgement through qualitative metrics.

In conjunction with WTW, Management recommended a two-part approach to changing the compensation framework.

In Part 1, to be implemented January 1, 2020, Management recommended moving to a 4-year investment return range in 2020 and subsequently moving to a 5-year investment return range in 2021 to reduce volatility and further align compensation to OMERS investment beliefs and long-term results.

Following questions and discussion, the Human Resources Committee approved the shift from a 3-year to a 4-year investment return range and the shift from a 4-year to a 5-year investment return range, both effective January 1, 2020.

Investment Risk Policy

The Investment Risk Policy (IRP) supplements the Statements of Investment Policies & Procedures and further defines limits and thresholds and clarifies roles and responsibilities.  The IRP is a key element of the risk framework.  Management proposed key areas of change related to currency hedging, financial leverage – debt; and asset concentration.

Following questions and discussion, the Investment Committee approved the Investment Risk Policy, effective January 1, 2020.  Due to the confidential and commercially sensitive nature of its contents, the Investment Risk Policy will not be posted on the OMERS website and will be kept confidential for internal use only. 

The Human Resources Committee and the Investment Committee reviewed a matter, but no final decisions were made by the Committees at the meeting.

2020 Internal Audit Plan

The Mandate and Work Plan of the Audit & Actuarial Committee and the Internal Audit Mandate require the review and approval of the internal audit plan of the Global Head of Internal Audit.

Following questions and discussion, the AAC approved the 2020 Internal Audit Plan.

Anti-Terrorist Financing & Money Laundering Policy

The Audit & Actuarial Committee Mandate requires that the Committee approve the Anti-Terrorist Financing & Money Laundering Policy (the Policy).  Compliance & Ethics has reviewed the Policy in collaboration with representatives of Business Units and suggested certain amendments.

Following questions and discussion, the AAC approved the Anti-Terrorist Financing & Money Laundering Policy, as amended, effective January 1, 2020.  In accordance with OAC’s practice, the Policy is posted on the OMERS website.

Anti-Fraud Framework

The Audit & Actuarial Committee Mandate requires that the Committee approve the Anti-Fraud Framework (Framework) every two years.  The Framework outlines the policies, guidelines, tools and stakeholders that collectively form the OMERS fraud governance model.

The Vice President, Operational Risk, advised that the Risk Group had reviewed the Framework in collaboration with representatives from Compliance & Ethics and Internal Audit and suggested non-significant editorial amendments.

Following a question and discussion period, the Audit & Actuarial Committee approved the amended Anti-Fraud Framework, effective December 1, 2019.

Valuation of Investments Policy

The Audit & Actuarial Committee Mandate requires the Committee to approve accounting and financial reporting policies.

The Senior Vice President, Financial Services, advised that Management had made some minor edits to include private credit investments and to make explicit the application of the Valuation of Investments Policy to mid-year valuations.

There being no questions from the Committee, the AAC approved the Valuation of Investments Policy, effective November 14, 2019.  In accordance with AC’s practice, the Policy is posted on the OMERS website.

Investment Performance Reports to the SC

Since 2014, the AC provides quarterly reporting on the results of the Primary Plan fund to the OMERS Sponsors Corporation once the AAC had met and reviewed the quarterly financial results.  

Following questions and discussion, the AAC approved the OMERS Investment Performance and OMERS Asset Mix Exposure Report, as at September 30, 2019, with both to be provided to the SC.

Charities Policy

The Governance Committee Mandate requires that the Committee approve specific named policies including the Charities Policy.  The Policy outlines the parameters under which OMERS will participate in charitable giving while maintaining fiduciary obligations to plan members.

Management proposed approval of the updated Charities Policy which was reviewed in accordance with its planned renewal cycle.  Several administrative updated were recommended.

Following questions and discussion, the Governance Committee approved the Charities Policy, effective December 1, 2019.  In accordance with AC’s practice, the Policy is posted on the OMERS website.

Director Remuneration Policy

The OMERS Act provides that the remuneration of AC Directors and the reimbursement of expenses are determined by the Sponsors Corporation (SC).  The SC has enacted By-law No. 6 to establish the level of remuneration and limits on the reimbursement of expenses.  The AC Board has delegated to the Governance Committee the responsibility for establishing Director remuneration and expense policies that are consistent with the SC’s by-law and provide additional guidance to AC Directors.

Management did not recommend any substantive changes to the Director Remuneration Policy; however, because the SC was in the process of conducting a review of AC Board remuneration and the results would not be considered for approval by the SC Board until after the Governance Committee meeting, Management sought authorization for the Board Chair and Chair of the Governance Committee to update the Policy to reflect any amendments to SC By-law No. 6 resulting from the current SC review of AC Board remuneration.

Following questions and discussion, the Governance Committee authorized the Chair of the Board and Chair of the Governance Committee to update the AC Director Remuneration Policy to reflect any changes to AC Board remuneration upon approval of an amendment to the OMERS Sponsors Corporation’s By-law No. 6.

Governance Manual and Governance Handbook for 2020

The Governance Committee’s mandate authorizes the Committee to approve the form and content of a Governance Manual and Governance Handbook.

Following this year’s review, substantive changes to the Manual related to updating the Board Mandate, Committee Mandates, and Management Mandate were recommended.  No fundamental changes were recommended for the Handbook.

Following questions and discussion, the Governance Committee approved the Governance Manual and the Governance Handbook and authorized the Corporate Secretary to make future editorial changes as required.  OMERS practice is to post the Governance Manual on its public website.  The Handbook is an internal reference tool for directors and management personnel.

Private Equity Strategy Update

In 2019, under the leadership of the OMERS Chief Investment Officer, the Private Equity investment portfolio launched the Growth strategy to manage early stage investments with high growth potential.  As part of this change, Platform Investments was realigned by divesting and transferring certain assets to other business units.

Moving forward, all Private Equity employees will be compensated and governed under one Private Equity Compensation Plan.  Under the Private Equity Compensation Plan, investments in Core, Growth, and Ventures will have separate compensation pools designed to protect OMERS as a plan participant.

Following questions and discussion, the Human Resources Committee approved the amendment to the Private Equity Compensation Plan to include Growth participants, effective January 1, 2020.

The Investment Committee reviewed several matters and made several recommendations to the Board, but no final decisions were made by the Committee at the meeting.

The Risk Oversight Committee reviewed several matters and made several recommendations to the Board, but no final decisions were made by the Committee at the meeting.

A special meeting of the Investment Committee was called to consider an investment transaction.  Due to legal and contractual reasons, the decision is required to be kept confidential.

A special meeting of the Investment Committee was called to consider an investment transaction. Due to legal and contractual reasons, the decision is required to be kept confidential.

The Risk Oversight Committee reviewed several matters, but no final decisions were made by the Committee at the meeting.

Updated 2020 Gap Analysis

At its August 13, 2019 meeting, the Governance Committee updated the Skills Matrix to identify those Directors whose terms are expiring at the end of 2020 and may be renewed and the one Director who is facing his term limit at the end of 2020.  The Governance Committee also approved an updated skills assessment in accordance with its mandate.

As recommended by the Governance Committee, the OAC Board approved the Skills Matrix and resulting Gap Analysis at its meeting held on August 15, 2019. The Board also authorized the Governance Committee to update the Skills Matrix and Gap Analysis after the two new members of the Board were appointed effective January 1, 2020.

Following their appointments by the SC Board to the OAC Board, the new Directors provided information in a self-assessment as to how they would contribute to the Competency Framework established by the OAC Board. The Committee reviewed the self-assessment forms and based upon this information, the Gap Analysis was updated to identify significant gaps on the OAC Board in 2021.

Following questions and discussion, the Governance Committee approved the skills assessments of the new OAC Board members, and the updated Skills and Experience Matrix for 2021. The Committee also authorized and directed the OAC Board Chair and the Chair of the Governance Committee to communicate the updated Skills Matrix and resulting Gap Analysis to the SC Board for its use in the 2021 OAC Board appointment process.

A special meeting of the Investment Committee was called to consider several investment transactions.  Due to legal and contractual reasons, the decisions are required to be kept confidential.

2020 Gap Analysis

In 2017, the Governance Committee substantially updated the OAC Board Competency Framework and the corresponding Gap Analysis process.  The Competency Framework was revamped and updated to reflect current strategic priorities; a process for receiving input from the SC was implemented; and the Governance Committee was tasked with assessing and confirming the individual skills assessments and aggregate Skills Matrix of the current OAC Directors.  These enhancements, combined with an accelerated timeframe, enable the OAC Board to identify skills gaps (including gaps created by retiring Directors) and provide a Gap Analysis to the SC well in advance of the process for making renewal and replacement decisions.

The Competency Framework was last updated in December 2017 to reflect input from the SC.  No further changes were recommended.  It is anticipated that the Competency Framework will be reviewed again in 2020 as part of a three-year cycle.

The Skills Matrix was revised to reflect the addition of a fourth competency for a current Director as well as identify those Directors whose terms are expiring at the end of 2020 and may be renewed and the one Director who is facing his term limit at the end of 2020.

As recommended by the Governance Committee at its meeting held on August 13, 2019, the OAC Board:

  • approved the Competency Framework and Skills Matrix with such non-material amendments thereto as may be determined by the OAC Board Chair and the Chair of the Governance Committee;

  • authorized and directed the OAC Board Chair and the Chair of the Governance Committee to communicate with the SC regarding preferred qualifications for appointments to be made to the OAC Board effective January 1, 2021, as described in the Competency Framework.  Any feedback from the SC on such communication would be reviewed by the Governance Committee and the OAC Board; and

  • authorized the Governance Committee to update the Skills Matrix to reflect the skills assessment of the two 2020 incoming Directors as approved by the Committee.

2022 Board and Committee Meeting Schedule

The Governance Committee is responsible for reviewing and recommending the annual schedule of meetings for the OAC Board and its Committees.  In assessing and recommending the meeting schedule for 2022, lessons learned from 2018 and 2019 have been incorporated into the rolling three-year Board calendar for 2020, 2021 and 2022.

As recommended by the Governance Committee at its meeting held on August 13, 2019, the OAC Board approved the draft 2022 meeting schedule for the OAC Board and Standing Committees.

2019 Mid-Year Financial Statements, Financial Highlights and Private Investment Valuations

Pursuant to its mandate, the Audit & Actuarial Committee is to recommend to the OAC Board approval of the mid-year financial statements, including financial highlights and management discussion and analysis, prepared by Management and reviewed by the external auditors.

As recommended by the Audit & Actuarial Committee at its meeting held on August 14, 2019, the OAC Board approved the mid-year financial statements and related materials.

C-Suite Succession Plan

The Human Resources Committee Mandate states that the Committee is responsible for approving the succession plans for the C-Suite to ensure such plans are established and adequately maintained.

Following questions and discussion, the Human Resources Committee approved the C-Suite succession plan.

Investment Performance Reports to the SC

At its meeting on May 22, 2014, the OAC Board agreed that quarterly reporting on the results of the Primary Plan fund would be released to the OMERS Sponsors Corporation once the AAC had met and reviewed the quarterly financial results.

Following questions and discussion, the AAC approved the OMERS Investment Performance and OMERS Asset Mix Exposure Report, as at June 30, 2019, with both to be provided to the SC.

Internal Audit Mandate Review

The Audit & Actuarial Committee Mandate requires the Global Head of Internal Audit to review and, if appropriate, recommend to the Committee changes to the Internal Audit Mandate.  Following the review, the Global Head of Internal Audit determined that none of the proposed changes to the Audit & Actuarial Committee Mandate necessitated changes to the Internal Audit Mandate.

Because the Internal Audit Mandate is a relatively static document, the Global Head of Internal Audit recommended that the review cycle be changed to once every three years, such that the next review will be in August 2022.  If there are any external or internal factors that require changes in the interim, they will be brought back off-cycle.

There being no questions from the Committee, the AAC approved the revised Internal Audit Mandate, effective August 14, 2019.

The Risk Oversight Committee reviewed several matters, but no final decisions were made by the Committee at the meeting.

2020 Gap Analysis

The OAC Board Competency Framework reflects OMERS unique and specific needs based on its strategy and organizational structure.  The Competency Framework works in tandem with the Skills Matrix, which maps those competencies to specific Directors and in doing so identifies specific competencies in which the OAC Board may need to increase its capacity.  This Gap Analysis is then communicated to the SC in advance of its process of making renewal and replacement decisions on the OAC Board.

In July, all OAC Directors were asked to review their self-assessments.  All Directors except one confirmed their existing self-assessments; one director provided additional information for the Committee’s consideration.

Following a discussion of individual Director competencies and proposed amendments, the Governance Committee approved the skills assessments of the OAC Board members, including the additional competency as presented.

The Investment Committee considered an investment transaction.  Due to legal and contractual reasons, the decision is required to be kept confidential.

The Investment Committee reviewed a matter and received an update, but no final decisions were made by the Committee at the meeting.

Debrief – Joint OAC/SC Strategy Session

In 2015, OAC and the SC approved a single OMERS 2020 Strategy (the Strategy), fulfilling a key recommendation of the 2012 Review by Tony Dean.  In 2018, Management of both corporations began working on a Strategic Framework (2030 Strategy) & Five-Year Strategic Priorities (2025 Strategy) (together, the Strategy), keeping the Boards apprised of their progress.  At the Joint OAC/SC Strategy Session on May 14, 2019, the Boards provided feedback to be incorporated into the Strategy.

The Board Chair advised that both Boards need to approve the Strategy and encouraged the OAC Board to approve the Strategy at this meeting, with the condition that approval of the Strategy was dependent on similar approval by the SC Board at its meeting to be held on May 21, 2019.

Following discussion, the OAC Board approved and endorsed all the elements of the Strategy related to the business and operations of OMERS Administration Corporation and authorized the Board Chair to make such non-material amendments as he deemed appropriate, on the recommendation of the CEO.  The OAC Board also authorized and directed the CEO to take all the necessary actions to implement the Strategy and report back on the progress against the Strategy at least semi-annually.

Review Appeals Rules, Appeals Manual and By-Law No. 4

The Appeals Committee work plan directs the Committee to review and consider amendments to the Rules Respecting Practice and Procedure for Appeals (the Appeals Rules), the Appeals Manual and By-Law No. 4.  OAC Management recommended several amendments to the Appeals Rules and no changes to the Appeals Manual or By-Law No. 4.

As recommended by the Appeals Committee at its meeting held on May 14, 2019, the OAC Board approved the amended Rules Respecting Practice and Procedure for Appeals, effective May 16, 2019.

2019 Supplemental Plan Contribution Rate Study

The Supplemental Plan is a stand-alone jointly-sponsored pension plan that provides enhanced benefits on top of those provided under the Primary Plan.  Supplemental Plan benefits are available only to police officers, police civilians, firefighters and paramedics.  To date, none of these groups have negotiated membership under the Supplemental Plan; however, because of the potential for bargaining of supplemental benefits, the SC needs to set the contribution rates for this Plan.

OAC is responsible for setting minimum contribution rates and the actuarial assumptions and methods which underpin their determination for all OMERS pension plans.  Based on the advice of OAC’s external actuary, Willis Towers Watson, the Audit & Actuarial Committee recommended that the OAC Board approve an updated set of actuarial assumptions, methods and the resulting minimum contribution rates for the Supplemental Plan.

As recommended by the Audit & Actuarial Committee at its meeting held on May 15, 2019, the OAC Board approved and transmitted to the SC without any recommendation the following information:

  • the actuarial assumptions and methods to be used to determine the minimum contribution rates under the Supplemental Plan; 

  • the 2019 minimum contribution rates under two potential membership level scenarios for consideration by the SC in setting future Supplemental Plan contribution rates; and 

  • the 2019 minimum rebound contribution rates under the Primary Plan for consideration by the SC in setting future Primary Plan contribution rates.

Governance Principles

In 2013, in response to the 2012 Review of the OMERS Act conducted by Tony Dean, OAC adopted a set of Governance Principles that provided a public demonstration of its commitment to governance excellence in order to best meet its obligations to plan members, employers and other stakeholders.  The Governance Committee conducted a review of the Governance Principles in 2016 and added an additional principle relating to “Privacy and Confidentiality” to reflect the concerns of the OAC Board at the time.

Each year, the Governance Committee considers a report on how OAC is managing against the Governance Principles.  At its February 21, 2019 meeting, the Governance Committee considered the 2018 report and was advised that Management would bring forward a review of the Governance Principles and any recommendations for changes to the Governance Principles at its May 2019 Committee meeting.

Management recommended that an additional principle entitled “Stewardship” be added to the Governance Principles.  Stewardship contemplates the long-term management of the assets of plan members over the life cycle of their participation in the Plan.

Following questions and discussion, and as recommended by the Governance Committee at its meeting on May 15, 2019, the OAC Board approved the revised Governance Principles, effective June 1, 2019.

Proposed Investment

The OAC Board considered a pending investment transaction; however, due to legal and contractual reasons, the decision is required to be kept confidential.

Updated Consolidated 2019 Governance Committee Work Plan

The 2019 Governance Committee Work Plan was approved at the Committee’s February 21, 2019 meeting; however, at its meeting on February 22, the OAC Board approved the disbandment of the Technology Committee and the consolidation of the Technology Committee’s responsibilities into an enhanced Governance Committee Mandate.

As a result of this consolidation, an update to the Governance Committee Work Plan was required.  In addition, the OAC Board assigned certain pension administration oversight responsibilities to the Governance Committee to better align the Committee’s responsibilities with the executive leadership supporting the Committee.

Following discussion, the Governance Committee approved its updated 2019 Work Plan, which was prepared to comply with the Committee Mandate, as approved by the OAC Board at its meeting held on February 22, 2019.

The Risk Oversight Committee reviewed several matters, but no final decisions were made by the Committee at the meeting. 

Investment Performance Reports to the SC

At its meeting on May 22, 2014, the OAC Board agreed that quarterly reporting on the results of the Primary Plan fund would be released to the OMERS Sponsors Corporation once the AAC had met and reviewed the quarterly financial results.

Following a question and discussion period, the AAC approved the OMERS Investment Performance and OMERS Asset Mix Exposure Report, as at March 31, 2019, with both to be provided to the SC.

External Auditor Audit Plan and Engagement Letter & Fees for 2019

The Audit & Actuarial Committee Mandate requires the Committee to approve the annual audit plans of the External Auditor and approve the fee for the External Auditor for the upcoming audit year.

Following questions and discussion, the Audit & Actuarial Committee approved the following:

  • the External Audit Plan for the 2019 fiscal year audit;

  • the external auditor engagement letter and fees for the 2019 interim review and year-end audit;

  • authorization for the Chair of the Committee and the Chief Financial Officer to sign the engagement letter with PricewaterhouseCoopers on behalf of OAC.

Financial Disclosure Policy

The Audit & Actuarial Committee Mandate requires the Committee to approve accounting and financial reporting policies.  The Financial Disclosure Policy was last approved in May 2018 by the AAC.  In advance of the next scheduled renewal in December 2021, Management proposed amendments to the Policy to support the listing of OMERS Finance Trust’s (OFT) Medium Term Notes on the Luxembourg Stock Exchange.  The proposed amendments would create a new control process to identify information that must be disclosed under European Market Abuse Regulations.  

Following a question and discussion period, the AAC approved the revised Financial Disclosure Policy, effective June 1, 2019.  In accordance with OAC’s practice, the Policy is posted on the OMERS website.

The Human Resources Committee reviewed several matters and received an update, but no final decisions were made by the Committee at the meeting.

Investment Risk Policy – Leverage Limit Changes

Financial leverage increases investment risk through permanent loss of capital in the event of a covenant breach that is not remedied and when lenders exercise their rights over the secured assets.  A limit assists in managing this risk.

The Committee was asked to consider a proposed amendment to the Investment Risk Policy whereby the current Plan debt limit would be increased from 35% to 50%, with an amber zone beginning at 45%.  This update would help OMERS better manage investment risk by bringing the limit in line with today’s asset mix target weights.

Following questions and discussion, the Investment Committee approved the amended Investment Risk Policy, effective May 14, 2019.  Due to the confidential and commercially sensitive nature of its contents, the Investment Risk Policy will not be posted on the OMERS website and will be kept confidential for internal use only.

Sustainable Investing Framework

The Sustainable Investing Framework (the Framework) was developed to coordinate sustainable investing and environmental, social and governance (ESG) practices across the enterprise and to provide a foundation to continue to evolve OMERS approaches in these areas.

The Board was advised that the Framework consists of a Sustainable Investing Policy (the Policy) and related Guidelines and Procedures.  It was proposed that the Policy be adopted at the OAC Board level, the Guidelines at the Senior Executive Team level, and the Procedures at the Business Unit level. 

The Executive Vice President & General Counsel presented on the topic and Management responded to questions from Board Members.

Following discussion, the OAC Board approved the Sustainable Investing Policy, effective April 10, 2019, and delegated the authority to the Investment Committee of the OAC Board to provide oversight in respect of the Policy on behalf of the OAC Board. The OAC Board also authorized and directed the Investment Committee of the OAC Board to review and recommend appropriate changes to the Policy to the OAC Board annually in conjunction with the review of the Statements of Investment Policies and Procedures.

In accordance with OAC’s practice, the Policy is posted on the OMERS website.

2019 OAC Board Work Plan

The mandate of the OAC Board requires the Board to establish its work plan annually.  The OAC Board work plan functions as a checklist to satisfy the responsibilities of the Board as delegated to it by the Board-approved mandate.

The OAC Board approved its 2019 Work Plan, which was prepared to comply with the OAC Board Mandate approved by the Board at its meeting held on December 13, 2018.

2018 Valuation of the OMERS Primary Pension Plan

Each year, Willis Towers Watson prepares an actuarial valuation report for the Primary Plan.

As recommended by the Audit & Actuarial Committee at its meeting held on February 8, 2019, the OAC Board approved the following:

  • the actuarial methods and assumptions for the Primary Plan; and

  • the annual actuarial valuation of the Primary Plan.

2018 Valuation of the Retirement Compensation Arrangement for the OMERS Primary Pension Plan

Each year, Willis Towers Watson prepares an actuarial valuation report for the Retirement Compensation Arrangement (RCA) for the OMERS Primary Pension Plan.

As recommended by the Audit & Actuarial Committee at its meeting held on February 8, 2019, the OAC Board approved the following:

  • the actuarial methods and assumptions for the RCA; and

  • the annual actuarial valuation of the RCA.

2018 OMERS Primary Plan and Supplemental Plan Valuation Regulatory Filings

Each year, Willis Towers Watson prepares an actuarial valuation report for the OMERS Primary Pension Plan (Primary Plan) and, if applicable, an actuarial valuation report for the OMERS Supplemental Pension Plan for Police, Firefighters and Paramedics (Supplemental Plan).

Pursuant to its mandate, the Audit & Actuarial Committee recommends to the OAC Board whether the Sponsors Corporation should file these actuarial valuations with the applicable regulators.

As recommended by the AAC at its February 8, 2019 meeting, the OAC Board approved the following:

  • the recommendation to the Sponsors Corporation to file the actuarial valuation of the Primary Plan with the applicable regulators;

  • no recommendation to the Sponsors Corporation to file a December 31, 2018 actuarial valuation of the Supplemental Plan with the regulators; and

  • the recommendation that the Sponsors Corporation consider filing a valuation report for the Supplemental Plan after the completion of the 2019 contribution rate study and the SC’s adoption of any revised contribution rates.

2018 Audited Financial Statements, Management Discussion and Analysis, and Press Release

With respect to financial reporting, Section 21 of the OMERS Act, 2006, requires that OAC prepare a report on the affairs of the OMERS Pension Plans during the preceding year containing a copy of the audited financial statements and that OAC shall give a copy of the annual report to every employer participating in the Pension Plans and to any member, former member or retired member of the Plans who requests it.

Pursuant to its mandate, the Audit & Actuarial Committee is to recommend to the OAC Board approval of the following:

  • annual audited financial statements; and

  • management discussion and analysis content to be included in OAC’s Annual Report and other material public announcements regarding financial matters.

As recommended by the Audit & Actuarial Committee at its meeting held on February 15, 2019, the OAC Board approved the following:

  • OMERS Administration Corporation’s 2018 consolidated financial statements and Audited Financial Statements – Administered Funds;

  • the management discussion and analysis (MD&A) and the Front Section included in OMERS 2018 Annual Report and other material public announcements regarding financial matters; and

  • the press release with respect to the 2018 results.

Compensation Discussion and Analysis (Annual Report)

The Human Resources Committee mandate requires the Committee to recommend to the OAC Board compensation-related disclosure in public documents such as the OAC Annual Report.

Each year the OMERS Annual Report includes a section on executive compensation which covers the compensation and pension values earned to the end of December 31 of the respective performance year for the CEO, CFO and the three other most highly compensated executive officers with policy-making accountability.

As recommended by the Human Resources Committee at its meeting held on February 20, 2019, the OAC Board approved the 2018 Compensation Discussion and Analysis for inclusion in the Annual Report.

2018 OAC Board Remuneration and Attendance Report (Annual Report)

For the past several years, the Governance Committee has reviewed and recommended to the OAC Board the governance portions of the Annual Report, in a similar manner as the Audit & Actuarial Committee reviews the financial statements and MD&A and the Human Resources Committee reviews the Compensation Discussion & Analysis.

There are two main areas in the Annual Report that deal with governance matters – in the report dealing with Board remuneration and attendance, and in the overall narrative.

As recommended by the Governance Committee at its meeting held on February 21, 2019, the OAC Board approved the 2018 OMERS Administration Corporation Board Remuneration and Attendance Report for inclusion in the 2018 Annual Report.

Future Committee Structure

At its August 15, 2018 meeting, the Governance Committee discussed the Board Chair’s views on the potential for revamping and consolidating the OAC Board Standing Committee structure in 2019.

With the restructuring of the LEAP program, the Governance Committee discussed advancing one phase of the proposed restructuring, which would be to consolidate the Technology Committee’s responsibilities into an enhanced Governance Committee.  This involves assigning the core Technology Committee mandate matters to the Governance Committee, adding several of the Technology Committee members to the Governance Committee, and making several corresponding amendments to OAC By-laws and Mandates.

The Governance Committee also discussed the future of the Risk Oversight Committee.  Given its ongoing work, no changes to its mandate or structure were recommended; however, it was recommended that the meetings of the Risk Oversight Committee and the Governance Committee be rescheduled so that the Risk Oversight Committee meets immediately before the Governance Committee at the May, August and November meeting cycles.

The Board Chair reviewed his recommendations for modifications to Committee membership.

As recommended by the Governance Committee at its meeting held on February 21, 2019, the OAC Board approved the following:

  • disbandment of the Technology Committee, effective March 1, 2019, and the revocation of the Technology Committee Mandate;

  • increase in composition of the Governance Committee to 7 Directors, effective March 1, 2019;

  • amendment of the Governance Committee mandate to include former Technology Committee mandate responsibilities;

  • amendments to By-Laws No. 1 and No. 3 and the OAC Board Mandate, effective March 1, 2019, to remove references to the Technology Committee; and

  • the revised Board meeting schedules for May, August and December 2019.

As recommended by the Board Chair, the OAC Board approved the appointment of Charlene Mueller and Yung Wu to the Governance Committee and the appointment of Michael Fenn to the Audit & Actuarial Committee, effective March 1, 2019.

Related Party Transactions Review Policy

The Related Party Transactions Review Policy applies to a subset of related party transactions that are considered to be of higher risk.  These involve investment transactions and outsourcing processes where current or former directors or officers have a substantive interest, or transactions that involve organizations that nominate directors to the OAC Board.  This policy has been in place since 2011 and was substantially updated in 2016; it was due for its triennial review.

A number of minor clarifications to the Policy were recommended.

As recommended by the Investment Committee at its meeting held on February 20, 2019, the OAC Board approved the revised Related Party Transactions Review Policy, effective March 1, 2019.

HR Matters

Following discussion, and as recommended by the Human Resources Committee at its meeting held on February 20, 2019, the OAC Board approved the 2018 CEO compensation awards and payments and the revised 2019 CEO Performance Scorecard.

Risk Oversight Committee 2019 Work Plan

The Risk Oversight Committee mandate requires the Committee to establish its work plan annually.  The work plan describes how the Committee will meet its mandate obligations.

Following discussion, an amendment suggested by the Committee was incorporated into the 2019 Work Plan.

The ROC approved its amended 2019 Work Plan, which was prepared to comply with the Committee Mandate, as approved by the OAC Board at its meeting held on December 13, 2018.

2019 Technology Committee Work Plan

The 2019 work plan of the Technology Committee was prepared to comply with the Committee Mandate which was approved by the OAC Board at its meeting held on December 13, 2018.

The Vice President, Legal & Corporate Secretary, advised that, due to the disbandment of the Technology Committee effective March 1, 2019 and consolidation of the Technology Committee’s responsibilities into an enhanced Governance Committee, the items on the TC work plan would be integrated with the Governance Committee work plan, and the Governance Committee will approve a new combined work plan at its meeting in May.

Following questions and discussion, the Technology Committee requested two minor changes and approved its amended 2019 Work Plan.

2019 Governance Committee Work Plan

The Governance Committee Mandate requires the Committee to establish its Work Plan annually.  The Work Plan describes how the Committee will meet its mandate obligations.

Following discussion, the Governance Committee approved its 2019 Work Plan, which was prepared to comply with the Committee Mandate, as approved by the OAC Board at its meeting held on December 13, 2018.

2018 Enterprise Political Donations and 2019 Plan

In accordance with the Political Donations Policy, the Vice President, Government Relations, is required to make a recommendation to the Governance Committee at its first scheduled meeting each year regarding OMERS enterprise plan and budget for political contributions in the coming year.  Moreover, a report on contributions made in the previous calendar year is also required, with a summary report posted to OMERS public website to promote transparency with Plan members.

The Vice President, Government Relations, presented the enterprise donations made in 2018 and proposed donation plans for 2019.

Following questions and discussion, the Governance Committee approved the 2018 Enterprise Political Donations Plan.

2019 Investment Committee Work Plan

The Investment Committee Mandate requires the Committee to establish its Work Plan annually.  The Work Plan describes how the Committee will meet its mandate obligations.

The Vice President, Legal & Corporate Secretary, advised the Committee of the key update to the 2019 Work Plan.

Following discussion, the Investment Committee approved its 2019 Work Plan, which was prepared to comply with the Committee Mandate, as approved by the OAC Board at its meeting held on December 13, 2018.

Issuance of Medium Term Notes by OMERS Finance Trust

In August 2018 the Investment Committee approved a guarantee by OAC of a USD$5 billion program of Medium Term Note offerings by OMERS Finance Trust, to be denominated exclusively in USD.

Since obtaining that approval, OAC Finance has identified opportunities to make use of medium term financing in currencies other than USD.  As a result, the Committee was asked to consider an amended and restated resolution for the Medium Term Notes Program for the purpose of extending the range of currencies for which OAC may guarantee Medium Term Notes to include CAD, EUR, GBP, AUD and JPY.  The overall program limit of USD$5 billion would remain unchanged.

Following questions and discussion, the Investment Committee approved the transaction.

Investment in VTG AG

OMERS Infrastructure sought the approval of the Investment Committee to acquire an indirect stake in VTG AG, a market leader in private rail freight wagon leasing in Europe.  VTG AG provides essential transportation infrastructure with a diverse portfolio of approximately 94,000 wagons to a diversified customer base of over 1,000 customers.

Following questions and discussion, the Investment Committee approved the acquisition.

In a press release issued June 11, 2019, OMERS and OMERS Infrastructure announced its acquisition of a 25% indirect share in VTG AG.  This is OMERS second infrastructure investment in Germany.

Investment in 407 International Inc.

OMERS Infrastructure sought the approval of the Committee to acquire a minority interest in 407 International Inc., which holds a concession over the 407 Express Toll Route (“407 ETR”). 407 ETR is the world’s first all-electronic, open-access toll highway and stretches 108 km across the Greater Toronto Area.

Following questions and discussion, the Investment Committee requested two clarifying amendments to the resolution and approved the acquisition.

In a press release issued on April 5, 2019, OMERS and OMERS Infrastructure announced its acquisition of a 10.01% stake in 407 International Inc. from SNC-Lavalin Group Inc.  Following this announcement, the other shareholders of 407 International Inc. exercised their rights of first refusal at a price equal to OMERS offer.

2019 Work Plan – Human Resources Committee

The Human Resources Committee is accountable for developing and approving its work plan. The work plan is a tool used by the Committee to satisfy its responsibilities as delegated to it by the OAC Board-approved mandate.

The HRC approved its 2019 Work Plan which was prepared to comply with the Committee Mandate, as approved by the OAC Board at its meeting held on December 13, 2018.

Investment Performance Reports to the SC

At its meeting on May 22, 2014, the OAC Board agreed that quarterly reporting on the results of the Primary Plan fund would be released to the OMERS Sponsors Corporation once the Audit & Actuarial Committee met and reviewed the quarterly financial results.

The AAC approved the OMERS Investment Performance and OMERS Asset Mix Exposure Report, as at December 31, 2018, with both to be provided to the SC.

2018 Risk Adjustments for Compensation Plans

The risk adjustment is a compensation design feature incorporated in compensation plans to enhance plan governance and incent achievement of the organization’s desired risk culture.

Following discussion, the Human Resources Committee approved a 0% Risk Adjustment for all compensation plans organization-wide.

Audit & Actuarial Committee 2019 Work Plan

The Audit & Actuarial Committee mandate requires the Committee to establish its work plan annually.  The work plan describes how the Committee will meet its mandate obligations.

An amendment suggested by the Committee was incorporated into the 2019 Work Plan.

Following questions and discussion, the AAC approved its amended 2019 Work Plan, which was prepared to comply with the Committee Mandate, as approved by the OAC Board at its meeting held on December 13, 2018.

The Technology Committee received an update, but no final decisions were made by the Committee at the meeting.

A special meeting of the Investment Committee was called to consider an investment transaction. Due to legal and contractual reasons, the decision is required to be kept confidential.

2018 Meeting Summaries

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.

The Risk Oversight Committee reviewed several matters, but no final decisions were made by the Committee at the meeting.

The Investment Committee made a recommendation to the OAC Board but no final decisions were made by the Committee at the meeting.

A Compensation Framework for the Future

The Human Resources Committee mandate includes approving all compensation plans for executive-level employees, which includes annual investment return ranges to ensure continued governance and oversight of the primary driver of compensation plans.

Based on the discussion held at the Joint Investment Committee and Human Resources Committee meeting on December 6, 2018, the Human Resources Committee approved the Investment Return Ranges for Compensation Plans and the Long-Term Incentive Plan payment adjustment, both effective January 1, 2019.

The Human Resources Committee and the Investment Committee reviewed a matter, but no final decisions were made by the Committees at the meeting.

The Audit & Actuarial Committee received an update and made a recommendation to the OAC Board, but no final decisions were made by the Committee at the meeting.

Investment in Altice France’s Fibre to the Home Business

OMERS Infrastructure sought the approval of the Investment Committee to acquire a stake in a carve out of SFR’s fibre optic networks in France. SFR is a French telecommunications operator owned by Altice France.

Following a question and discussion period, the Investment Committee approved the acquisition.

In a press release issued November 30, 2018, OMERS and OMERS Infrastructure announced that an OMERS Infrastructure majority-led consortium, including Allianz Capital Partners (ACP) and AXA IM - Real Assets, acting on behalf of its clients, entered into an exclusivity agreement with Altice France to acquire a 49.99% stake in SFR FttH, a company to be formed by Altice France, which will hold and further develop Altice France’s existing fibre to the home business (FttH) in France. The deal is expected to close in Q1 2019.

Sale of Majority Interest in Caliber Collision Centers

OMERS Private Equity sought the approval of the Investment Committee to sell a majority interest in Caliber Collision Centers (“Caliber”), a collision repair provider in the United States. As part of the transaction, Caliber would be merged with Abra Auto Body Repair of America (a Hellman & Friedman LLC (“H&F) portfolio Company) to form a leading collision repair provider with more than 1,000 centers across 37 states. OPE also sought the approval of the Committee to retain a minority stake in the newly combined Caliber-ABRA entity.

Following a question and discussion period, the Investment Committee approved the disposition and subsequent reinvestment in the new company.

In a press release issued December 5, 2018, OMERS and OMERS Private Equity announced the sale of a majority interest in Caliber to funds affiliated with H&F and OPE’s significant minority reinvestment.  The transaction closed in early 2019.

Investment Performance Reports to the SC

At its meeting on May 22, 2014, the OAC Board agreed that quarterly reporting on the results of the Primary Plan fund would be released to the OMERS Sponsors Corporation once the Audit & Actuarial Committee met and reviewed the quarterly financial results.

The AAC approved the OMERS Investment Performance and OMERS Asset Mix Exposure Report, as at September 30, 2018, with both to be provided to the SC.

Internal Audit Mandate

The Audit & Actuarial Committee Mandate requires the Global Head of Internal Audit to review and, if appropriate, recommend to the Committee changes to the Internal Audit Mandate (the Mandate).

There were no fundamental changes proposed since the Mandate was last approved in February 2018, although the Mandate was streamlined and simplified.

Following questions and discussion, the AAC approved the revised Internal Audit Mandate, effective November 15, 2018.

2019 Internal Audit Plan

The mandate and work plan of the Audit & Actuarial Committee and the Internal Audit Mandate require the review and approval of the internal audit plan of the Global Head of Internal Audit.

Following a question and discussion period, the AAC approved the 2019 Internal Audit Plan.

The Human Resources Committee reviewed a number of matters, but no final decisions were made by the Committee at the meeting.

Governance Manual and Governance Handbook for 2019

The Governance Committee’s mandate authorizes the Committee to approve the form and content of a Governance Manual and Governance Handbook.

Following this year’s review, substantive changes to the Manual related to updating the Board Mandate, Committee Mandates, and Management Mandate were recommended.  No fundamental changes were recommended for the Handbook.

Following questions and discussion, the Governance Committee approved the Governance Manual and the Governance Handbook and authorized the Corporate Secretary to make future editorial changes as required.  OMERS practice is to post the Governance Manual on its public website.  The Handbook is an internal reference tool for directors and management personnel.

The Technology Committee received updates on various matters, but no final decisions were made by the Committee at the meeting.

Investment Risk Policy

The Investment Risk Policy supplements the Statements of Investment Policies and Procedures by further defining limits and thresholds and clarifying roles and responsibilities.  Prior to this regular annual review, a temporary amendment to the Policy was approved in August to reduce the lower limit of the Fixed Income asset group from 25% to 20% of the Fund.

A number of amendments to the Investment Risk Policy were considered.

Following questions and discussion, the Investment Committee approved the Investment Risk Policy, effective January 1, 2019.  Due to the confidential and commercially sensitive nature of its contents, the Investment Risk Policy will not be posted on the OMERS website and will be kept confidential for internal use only.

A special meeting of the Investment Committee was called to consider a pending investment transaction. Due to legal and contractual reasons, the decision is required to be kept confidential.

The Risk Oversight Committee reviewed several matters, received an update and made recommendations to the Governance Committee and OAC Board, but no final decisions were made by the Committee at the meeting.

Sale of MatrixCare

OMERS Private Equity sought the approval of the Investment Committee to proceed with the disposition of the OAC’s indirect interest in MatrixCare, an industry leading, SaaS-based, long-term post-acute care technology provider used in more than 13,000 facility-based care settings and 2,500 home care, home health and hospice organizations.

Following a question and discussion period, the Investment Committee approved the sale.

In a press release issued November 5, 2018, OMERS and OMERS Private Equity announced the sale of MatrixCare to ResMed Operations Inc. for US$750 million. The transaction closed in the fourth quarter of 2018.

The Risk Oversight Committee reviewed several matters and made a recommendation to the OAC Board but no final decisions were made by the Committee at the meeting.

Reappointment of Independent Board Chair

On May 19, 2016, George Cooke was appointed to serve for a second term as the Chair of the Board of Directors of OMERS Administration Corporation with the term commencing January 1, 2017 and terminating on December 31, 2019.  This reappointment was the result of a process conducted jointly with the OMERS Sponsors Corporation and OAC in response to a recommendation from the 2012 Review of the OMERS Act conducted by Tony Dean.

At its August 17, 2018 meeting, the OAC Board approved a process for assessing the performance and establishing a process jointly with the SC Board to consider and, if appropriate, reappoint George Cooke as OAC Board Chair for a third term.

In accordance with that process, the two Boards conducted a Joint Working Group review process on September 17, 2018 followed by a unanimous recommendation to reappoint Mr. Cooke for a further term.  At its meeting held on September 19, 2018, the SC Board approved a resolution confirming George Cooke as the fifteenth member of the OAC Board to serve as the OAC Board Chair for a further three-year term commencing January 1, 2020 and terminating on December 31, 2022.

Based on the approval of the SC, the OAC Board approved the appointment of George Cooke as the Chair of the OAC Board for a term of three years effective January 1, 2020. The OAC Board also authorized and directed the Chair of the Governance Committee to communicate to the SC to confirm the support of the OAC Board to the reappointment of Mr. Cooke to serve as OAC Board Chair.

The Risk Oversight Committee reviewed a matter but no final decisions were made by the Committee at the meeting.

Acquisition of Investa Office Fund

Oxford Properties Group sought the Investment Committee’s approval to acquire Investa Office Fund, an Australian REIT that owns a portfolio of 19 office assets across Sydney, Melbourne, Perth, Canberra and Brisbane.

Following a question and discussion period, the Investment Committee approved the acquisition.

In a media release issued December 14, 2018, Oxford announced its acquisition of Investa Office Fund for A$3.4 billion.

Acquisition of Interest in Paradigm Outcomes

OMERS Private Equity sought the Investment Committee’s approval to acquire an interest in Paradigm Outcomes (“Paradigm”), a market leading provider of complex and catastrophic medical management to the U.S. workers’ compensation industry.

Following a question and discussion period, the Investment Committee approved the acquisition.

In a press release issued September 20, 2018, OMERS and OMERS Private Equity announced the acquisition of Paradigm. Summit Partners, Paradigm’s existing majority owner, will continue to be a shareholder in Paradigm.

Confirmation of Appointment of Officers

In order to facilitate compliance reporting and certification requirements in other jurisdictions, OAC has found it useful to summarize the current senior officers of the corporation in an annual confirmatory resolution.  Also, to facilitate the signing of certificates and powers of attorney, it is useful to appoint various corporate counsel as assistant corporate secretaries.

The OAC Board approved a resolution, effective July 31, 2018, that gave effect to this intention.

Strategic Partnerships Program

The Strategic Partnerships Program (SPP) is a key part of the proposed 2030 Strategic Plan.  It offers a potential competitive advantage for OMERS, supporting increased opportunities to pursue large-scale investments, majority control and governance, cost recovery, and alignment with investment strategy.  It also represents a shift from the current 2020 strategy, which does not focus on a third-party capital program.  The SPP will include an OMERS Infrastructure program (OIP), a Real Estate program (REP) and a Private Equity program (PEP).

The OAC Board was asked to approve the infrastructure platform in the SPP because it was outside of the previously approved 2020 Strategic Plan, and the current Investment Committee mandate did not include authority to approve third-party investor offerings under the SPP.

Following questions and discussion, and as recommended by the Investment Committee at its meeting held on August 14, 2018, the OAC Board approved the Strategic Partnerships Program.

Temporary Adjustment to SIP&P Fixed Income Lower Limit

Management recommended that an amendment be made to the policy limit in the OMERS Statement of Investment Policies and Procedures (SIP&P) for the Primary Plan reducing the current minimum strategic asset allocation for Fixed Income from 25% to 20% of OMERS net assets.

As recommended by the Investment Committee at its meeting held on August 14, 2018, the OAC Board approved a resolution, effective August 17, 2018, that gave effect to this intention.

Independent Board Chair Appointment Process

At its August 15, 2018 meeting, the Governance Committee completed the next step in the process to consider the reappointment of the OAC Board Chair for a third term commencing January 1, 2020 – the review of the Board Chair’s self-assessment. The Governance Committee had a thorough discussion and unanimously endorsed and recommended the Board Chair’s self-assessment and his reappointment as Chair of OMERS Administration Corporation. Subject to the OAC Board’s review and approval, the results of the Governance Committee’s review would be submitted to the Sponsors Corporation as an “input” into the process to be conducted by the Joint Working Group established by both Boards.

Following discussion, and as recommended by the Governance Committee at its meeting held on August 15, 2018, the OAC Board:

  • approved the OAC Board Chair Self-Assessment, including the Governance Committee evaluation, and directed the Chair of the Governance Committee to submit the Self-Assessment to the Joint Working Group;

  • approved the appointment Monty Baker, Laurie Hutchinson, Jim Phillips and Penny Somerville (or a substitute as required, as determined by the Chair of the Governance Committee) as OAC Board representatives on the Joint Working Group established pursuant to SC By-law No. 13; and

  • directed the OAC representatives on the Joint Working Group to work with the SC representatives on the Joint Working Group in an expeditious and collaborative manner to arrive at a recommendation relating to the appointment of an OAC Board Chair consistent with the process set out in SC By-law No. 13.

2019 Gap Analysis

In 2017, the Governance Committee substantially updated the process for reviewing the OAC Board Competency Framework and the corresponding Gap Analysis.  The intention of the review was to accelerate the timing of the process so that the OAC Board could work more effectively with the Sponsors Corporation Board as they worked to identify suitable candidates for upcoming positions on the OAC Board.

The Competency Framework was last updated in December 2017 to reflect some input from the SC.  No further changes were recommended. The Skills Matrix was revised to identify those Directors whose terms were expiring at the end of 2019 and may be renewed and those Directors who were facing term limits and thus will be leaving the OAC Board at the end of 2019.

As recommended by the Governance Committee at its meeting held on August 15, 2018, the OAC Board approved the Competency Framework and Skills Matrix with such non-material amendments thereto as may be determined by the OAC Board Chair and the Chair of the Governance Committee. The OAC Board also authorized and directed the OAC Board Chair and the Chair of the Governance Committee to communicate with the SC regarding preferred qualifications for appointments to be made to the OAC Board effective January 1, 2020, as described in the Competency Framework.  Any feedback from the SC on such communication would be reviewed by the Governance Committee and the OAC Board.

2021 Board and Committee Meeting Schedule

The Governance Committee is responsible for reviewing and recommending the annual schedule of meetings for the OAC Board and its Committees.  In assessing and recommending the meeting schedule for 2021, lessons learned from 2017 and 2018 were incorporated into the rolling three-year Board calendar for 2019, 2020 and 2021.

As recommended by the Governance Committee at its meeting held on August 15, 2018, the OAC Board approved the draft 2021 meeting schedule for the OAC Board and Standing Committees.

C-Suite Succession Plan

The Mandate of the Human Resources Committee requires the Committee to approve the succession plans for the C-Suite to ensure such plans are established and adequately maintained.

Following a question and discussion period, the Human Resources Committee approved the C-Suite succession plan.

Appointment – Global Head of Internal Audit

The Audit & Actuarial Committee Mandate stipulates that the Committee is responsible to approve the hiring for the position of the Global Head of Internal Audit.

On the completion of the interview process, the Board Chair, the AAC Chair and the Chief Risk Officer unanimously recommended the appointment of Colin Shaw to the role of Global Head of Internal Audit to the Committee for approval. On July 16, 2018, the AAC approved the appointment electronically.

The AAC ratified and confirmed the appointment of Colin Shaw to the role of Global Head of Internal Audit, effective July 31, 2018.

Investment Performance Reports to the SC

At its meeting on May 22, 2014, the OAC Board agreed that quarterly reporting on the results of the Primary Plan fund would be released to the OMERS Sponsors Corporation once the Audit & Actuarial Committee met and reviewed the quarterly financial results.

The AAC approved the OMERS Investment Performance and OMERS Asset Mix Exposure Report, as at June 30, 2018, with both to be provided to the SC.

External Auditor 2018 Audit Plan

The Audit & Actuarial Committee Mandate requires the Committee to approve the annual audit plans of the External Auditor and approve the fee for the External Auditor for the upcoming audit year.

Following discussion, the AAC approved the External Audit Plan for the 2018 fiscal year audit.

Investigation of Complaints Policy

The Audit & Actuarial Committee Mandate requires the Committee to review the Investigation of Complaints Policy (the Policy). The Policy was reviewed in collaboration with Compliance & Ethics and the Oversight Committee.  No material changes were recommended, although minor administrative updates were applied.

Following discussion, the AAC approved the amended Investigation of Complaints Policy, effective September 1, 2018. In accordance with OAC’s practice, the Policy is posted on the OMERS website.

Personal Trading and Institutional Trading Policies

The Audit & Actuarial Committee is responsible for reviewing and approving the Personal Trading Policy and the Institutional Trading Policy (the Policies) on a bi-annual basis. The Policies were last reviewed and approved in 2016 and were due for renewal this year.  Compliance & Ethics conducted a review of the Policies, consulted with relevant stakeholders in the Business Units, and recommended several amendments.

Following discussion, the AAC approved the Personal Trading Policy and the Institutional Trading Policy, both effective September 1, 2018. In accordance with OAC’s practice, the Polices are posted on the OMERS website.

The Technology Committee reviewed several matters, received several updates and made a recommendation to the Governance Committee, but no final decisions were made by the Committee at the meeting.

2019 Gap Analysis

The OAC Board Competency Framework, which is comprised of 12 competencies, reflects OMERS unique and specific needs based on its strategy and organizational structure.  The Competency Framework works in tandem with the Skills Matrix, which maps those competencies to specific Directors and in doing so identifies specific competencies in which the OAC Board may need to increase its capacity.  This “gap analysis” is then communicated to the SC in advance of its process of making renewal and replacement decisions.

To initiate the process, all Directors reviewed their previous year’s self-assessment and advised the Committee if any changes were required.

Following a discussion of individual Director competencies and proposed amendments, the Governance Committee approved the skills assessment provided by each of the OAC Board members with such amendments as determined by the Governance Committee. The Governance Committee also authorized and directed the OAC Board Chair and the Chair of the Governance Committee to communicate with the OMERS Sponsors Corporation regarding preferred qualifications for appointments to be made to the OAC Board effective January 1, 2020, as described in the Competency Framework.  Any feedback from the SC on such communication would be reviewed by the Governance Committee and the OAC Board.

Temporary Adjustment to SIP&P Fixed Income Lower Limit

As part of the discussion on amending the policy limit in the OMERS Statement of Investment Policies and Procedures for the Primary Plan (SIP&P) to reduce the minimum strategic asset allocation for Fixed Income from 25% to 20% of OMERS net assets, the Investment Committee was also asked to consider approving corresponding changes to the Fixed Income Asset Class Limits and Thresholds in the Investment Risk Policy (IRP). This would ensure consistency between the SIP&P and the IRP. Changes to the IRP are within the Committee’s delegated authority.

Following discussion, the Investment Committee approved the amended Fixed Income Asset Class Limits and Thresholds, effective August 17, 2018.

Additional Transaction

The Investment Committee also considered an additional pending investment transaction; however, due to legal and contractual reasons, the decision is required to be kept confidential.

The Risk Oversight Committee reviewed several matters but no final decisions were made by the Committee at the meeting.

A special meeting of the Investment Committee was called to consider several pending investment transactions.  Due to legal and contractual reasons, the decisions are required to be kept confidential.

A special meeting of the Investment Committee was called to consider several pending investment transactions.  Due to legal and contractual reasons, the decisions are required to be kept confidential.

A special meeting of the OAC Board was called to receive several updates and to review several matters but no final decisions were made by the Board at the meeting.

Acquisition of Premise Health Holding Corp.

OMERS Private Equity sought the approval of the Investment Committee to acquire Premise Health Holding Corp. (Premise).  Premise is a leading direct healthcare company in the United States based in Brentwood, Tennessee.  Premise contracts directly with large corporate clients to provide healthcare to their employees and dependent members through onsite, near site and virtual health access offering a comprehensive range of healthcare services including primary care, pharmacy, occupational health, physical therapy, fitness and other related services.  Premise serves over 275 clients via more than 600 health and wellness centers.

Following a question and discussion period, the Investment Committee approved the acquisition.

In a press release issued July 11, 2018, OMERS and OMERS Private Markets announced that OMERS Private Equity agreed to acquire Premise Health from Water Street Healthcare Partners and Walgreens Boots Alliance.

The Risk Oversight Committee received several updates and reviewed a matter but no final decisions were made by the Committee at the meeting.

Confirmation of Appointment of Officers

In order to facilitate compliance reporting and certification requirements in other jurisdictions, OAC has found it useful to summarize the current senior officers of the corporation in an annual confirmatory resolution.  Also, to facilitate the signing of certificates and powers of attorney, it is useful to appoint various corporate counsel as assistant corporate secretaries.

The OAC Board approved a resolution, effective April 1, 2018, that gave effect to this intention.

Amendments to By-law No. 1

With the separation of duties between the Chief Executive Officer and the President and Chief Pension Officer as of April 1, 2018, references in By-law No. 1 to the CEO’s duty relating to benefit determinations required amendment, as this duty is exercised directly by the President.The OAC Board approved the amendment to By-law No. 1 by deleting certain phrases relating to the duties of the Chief Executive Officer which are now performed by the President and Chief Pension Officer.  In accordance with OAC’s practice, the OAC By-laws are posted on the OMERS website.

Enterprise Risk Report – Q1 2018

The OAC Board approved the Q1 Enterprise Risk Report which provided an update on OMERS risk profile.

Proposed Changes to the Rules Respecting Practice and Procedure

The Appeals Committee work plan permits amendments to the Rules Respecting Practice and Procedure (the Rules), the Appeals Manual and By-Law No. 4 as required.  A full review of all appeal documents is scheduled for 2019.

The Rules were updated to reflect the changes to the Senior Executive Team which took effect on April 1, 2018.  OAC Management also recommended amendments to the Rules, specifically, the removal of imbedded links to the OMERS website and the Government of Ontario website, which are no longer necessary.

As recommended by the Appeals Committee at its meeting held on May 22, 2018, the OAC Board approved the amended Rules Respecting Practice and Procedure, effective May 25, 2018.  The Rules are posted on the OMERS website.

Independent Board Chair Appointment Process

The OMERS Sponsors Corporation advised that it intends to commence a formal process in the fall of 2018 relating to the review and appointment of the OAC Board Chair for a third term commencing January 1, 2020.  As a result of the accelerated process, several steps were proposed, including the review and update of the Board Chair Role Description by the Governance Committee for recommendation to the OAC Board for approval.

The SC’s Corporate Governance Committee provided several suggestions for amendments that better reflect the working relationship that the OAC Board Chair is expected to have with the SC and Sponsor Organizations. The OAC Board also requested a minor wording change.

As recommended by the Governance Committee at its meeting held on May 23, 2018, the OAC Board approved the amended OAC Board Chair Role Description, effective June 1, 2018.  The Board Chair Role Description is included in the Governance Manual posted on the OMERS website.

The Technology Committee received updates on various matters, but no final decisions were made by the Committee at the meeting.

The Human Resources Committee reviewed several matters but no final decisions were made by the Committee at the meeting.

The Investment Committee reviewed several matters but no final decisions were made by the Committee at the meeting.

Lobbying Policy

The Governance Committee Mandate requires that the Committee review and approve the Lobbying Policy, which addresses communications with public officials on legislation, policies or programs including how grants, contributions, contracts and other financial benefits are awarded.

The Vice President, Government Relations and the Director, Compliance & Ethics, described the proposed amendments for transitioning the Lobbying Policy towards a more principles-based policy.

Following a question and discussion period, the Governance Committee approved the amended Lobbying Policy, effective June 1, 2018.  In accordance with OAC’s practice, the Policy is posted on the OMERS website.

Investment Performance Reports to the SC

At its meeting on May 22, 2014, the OAC Board agreed that quarterly reporting on the results of the Primary Plan fund would be released to the OMERS Sponsors Corporation once the Audit & Actuarial Committee met and reviewed the quarterly financial results.

The AAC approved the OMERS Investment Performance and OMERS Asset Mix Exposure Report, as at March 31, 2018, with both to be provided to the SC.

External Auditor Engagement Letter and Fees for 2018

The Audit & Actuarial Committee Mandate requires the Committee to approve the annual audit plans of the External Auditor and approve the fee for the External Auditor for the upcoming audit year.

Following discussion, the Audit & Actuarial Committee approved the external auditor engagement letter and fees for the 2018 interim review and year-end audit and authorized the Chair of the Committee and the Chief Financial Officer to sign the engagement letter with PricewaterhouseCoopers on behalf of OAC.

Financial Disclosure Policy

The Audit & Actuarial Committee Mandate requires the Committee to approve accounting and financial reporting policies. The Financial Disclosure Policy (the Policy) was scheduled for review in May 2018.

The SVP, Financial Services advised that there were no significant changes to the Policy and reviewed the proposed minor revisions.

Following a question and discussion period, the AAC requested several additional revisions to the Policy.

The AAC approved the revised Financial Disclosure Policy, effective June 1, 2018. In accordance with OAC’s practice, the Policy is posted on the OMERS website.

Anti-Bribery & Corruption Policy

The Audit & Actuarial Committee Mandate requires that the Committee review and approve the Anti-Bribery & Corruption Policy (the Policy).  The Policy deals with expectations around due diligence and risk assessments that support a no tolerance approach to bribery and corruption in OMERS business activities.  Compliance & Ethics reviewed the Policy in collaboration with representatives of the Business Units and suggested several changes.

Following a question and discussion period, the AAC requested an addition to the Policy.

The AAC approved the amended Anti-Bribery & Corruption Policy, effective June 1, 2018. In accordance with OAC’s practice, the Policy is posted on the OMERS website.

Acquisition of Alexander Mann Solutions

OMERS Private Equity sought the approval of the Investment Committee to acquire Alexander Mann Solutions, a leading global provider of talent acquisition and management solutions delivering value to clients through a portfolio of outsourcing and consulting services serving more than 100 clients in over 85 countries.

Following a question and discussion period, the Investment Committee approved the sale.

In a press release issued May 10, 2018, OMERS and OMERS Private Markets announced that OMERS Private Equity agreed to acquire Alexander Mann Solutions from New Mountain Capital for an enterprise value of £820m (USD$1.1bn). The proposed transaction is expected to close in the second quarter of 2018.

Additional Transactions

The Investment Committee considered several additional pending investment transactions; however, due to legal and contractual reasons, the decisions are required to be kept confidential.

The Technology Committee received updates on various matters, but no final decisions were made by the Committee at the meeting.

The Risk Oversight Committee received several updates and reviewed several matters but no final decisions were made by the Committee at the meeting.

The Risk Oversight Committee received updates on various matters, but no final decisions were made by the Committee at the meeting.

The Technology Committee received updates on various matters, but no final decisions were made by the Committee at the meeting.

A special meeting of the Investment Committee was called to consider a pending investment transaction. Due to legal and contractual reasons, the decision is required to be kept confidential.

The Risk Oversight Committee received an update and reviewed several matters but no final decisions were made by the Committee at the meeting.

Amendment to By-law No. 1 – Role of the Chief Executive Officer

OAC By-Law No. 1 provides for the appointment of a President who shall be the Chief Executive Officer.  It was desired to have the ability to split the roles of President and Chief Executive Officer, which requires an amendment to By-Law No. 1.

After a discussion led by the Board Chair, the OAC Board approved the following:

  • amendment of Article 9 and Article 11 of By-Law No. 1, effective April 1, 2018;

  • confirmation of Michael Latimer as Chief Executive Officer, effective April 1, 2018; and

  • authorization of the Corporate Secretary to make editorial amendments as required to By-Laws No. 2, 3 and 4 to give effect to the foregoing changes, and to publish the revised By-Laws under the authority of the Board of Directors, effective April 1, 2018.

2018 OAC Board Work Plan

The mandate of the OAC Board requires the Board to establish its work plan annually.  The OAC Board work plan functions as a checklist to satisfy the responsibilities of the Board as delegated to it by the Board-approved mandate.

The OAC Board approved its 2018 Work Plan, which was prepared to comply with the OAC Board Mandate approved by the Board at its meeting held on December 14, 2017.

Confirmation of Appointment of Officers

In order to facilitate compliance reporting and certification requirements in other jurisdictions, OAC has found it useful to summarize the current senior officers of the corporation in an annual confirmatory resolution.  Also, to facilitate the signing of certificates and powers of attorney, it is useful to appoint various corporate counsel as assistant corporate secretaries.

The OAC Board approved a resolution that gave effect to this intention.

Enterprise Risk Report – Q4 2017

The quarterly Enterprise Risk Report to the Board provides an update on OMERS risk profile.  The Q4 2017 report included a new section on the risk profile at the Primary Plan level.

Following questions and discussion with the Chief Risk Officer, the OAC Board approved the Q4 2017 Enterprise Risk Report.

2017 Valuation of the OMERS Primary Pension Plan

Each year, Willis Towers Watson prepares an actuarial valuation report for the Primary Plan.

As recommended by the Audit & Actuarial Committee at its meeting held on February 8, 2018, the OAC Board approved the following:

  • the actuarial methods and assumptions for the Primary Plan; and

  • the annual actuarial valuation of the Primary Plan.

2017 Valuation of the Retirement Compensation Arrangement for the OMERS Primary Pension Plan

Each year, Willis Towers Watson prepares an actuarial valuation report for the Retirement Compensation Arrangement (the “RCA”).

As recommended by the Audit & Actuarial Committee at its meeting held on February 8, 2018, the OAC Board approved the following:

  • the actuarial methods and assumptions for the RCA; and

  • the annual actuarial valuation of the RCA.

2017 OMERS Primary Plan and Supplemental Plan Valuation Regulatory Filings

Each year, Willis Towers Watson prepares an actuarial valuation report for the OMERS Primary Pension Plan (Primary Plan) and, if applicable, an actuarial valuation report for the OMERS Supplemental Pension Plan for Police, Firefighters and Paramedics (Supplemental Plan).

Pursuant to its mandate, the Audit & Actuarial Committee recommends to the OAC Board whether the Sponsors Corporation should file these actuarial valuations with the applicable regulators.

As recommended by the AAC at its February 8, 2018 meeting, the OAC Board approved the following:

  • the recommendation to the Sponsors Corporation to file the actuarial valuation of the Primary Plan with the applicable regulators; and

  • the recommendation to the Sponsors Corporation to file the actuarial valuation of the Supplemental Plan with the applicable regulators.

2017 Audited Financial Statements, Management Discussion and Analysis, and Press Release

With respect to financial reporting, Section 21 of the OMERS Act, 2006, requires that OAC prepare a report on the affairs of the OMERS Pension Plans during the preceding year containing a copy of the audited financial statements and that OAC shall give a copy of the annual report to every employer participating in the Pension Plans and to any member, former member or retired member of the Plans who requests it.

Pursuant to its mandate, the Audit & Actuarial Committee is to recommend to the OAC Board approval of the following:

  • annual audited financial statements; and

  • management discussion and analysis content to be included in OAC’s Annual Report and other material public announcements regarding financial matters.

As recommended by the Audit & Actuarial Committee at its meeting held on February 15, 2018, the OAC Board approved the following:

  • OMERS Administration Corporation’s 2017 consolidated financial statements and Audited Financial Statements – Managed Plans;

  • the management discussion and analysis (“MD&A”) and the Front Section included in OMERS 2017 Annual Report and other material public announcements regarding financial matters; and

  • the press release with respect to the 2017 results.

2017 OAC Board Remuneration and Attendance Report (Annual Report)

For the past several years, the Governance Committee has reviewed and recommended to the OAC Board the governance portions of the Annual Report, in a similar manner as the Audit & Actuarial Committee reviews the financial statements and MD&A and the Human Resources Committee reviews the Compensation Discussion & Analysis.

There are two main areas in the Annual Report that deal with governance matters – in the report dealing with Board remuneration and attendance and in the overall narrative.

As recommended by the Governance Committee at its meeting held on February 21, 2018, the OAC Board approved the 2017 OMERS Administration Corporation Board Remuneration and Attendance Report for inclusion in the 2017 Annual Report.

Risk Oversight Committee Mandate

In June 2017, the OAC Board approved the establishment of an ad hoc Risk Oversight Committee to oversee, on behalf of the Board, a number of significant risk management issues, including the development of an overall Risk Appetite Statement for OMERS, corresponding subsidiary risk appetite statements, a risk framework and a risk governance structure.  The expectation was that the mandate would terminate on June 30, 2018.

A Risk Appetite Statement for the Primary Plan was approved at the December 2017 OAC Board meeting and work progressed against the other deliverables.  At its January 30, 2018 meeting, the Risk Oversight Committee realized that it would be challenging to achieve the deliverables by June 30, 2018 and that the Committee would not have an opportunity to oversee the implementation and operation of any of these initiatives.  As a result, Risk Oversight Committee requested that the Board Chair propose to extend the mandate of the Committee to December 31, 2018.

As recommended by the Governance Committee at its meeting held on February 21, 2018, the OAC Board approved the extension of the mandate of the ad hoc Risk Oversight Committee to December 31, 2018 with a minor amendment.  Mandates are posted to the OMERS website.

Investment Committee Mandate

The Investment Committee mandate gives authority to the Investment Committee to approve transactions that exceed the authority delegated to Management.  The OAC Board was asked to consider a change to the IC mandate to expand the scope of the existing mandate to include the following responsibilities:

  • review of OMERS Finance Trust (OFT) strategy and plans regarding borrowings, either by way of credit facilities or note offerings; and

  • approval any OAC guarantees of such OFT borrowings.

As recommended by the Investment Committee at its meeting held on February 20, 2018 and by the Governance Committee at its meeting held on February 21, 2018, the OAC Board approved the amended Investment Committee Mandate, effective March 1, 2018.  Mandates are posted to the OMERS website.

Compensation Discussion and Analysis (Annual Report)

The Human Resources Committee mandate requires the Committee to recommend to the OAC Board compensation-related disclosure in public documents such as the OAC Annual Report.

Each year the OAC Annual Report includes a section on executive compensation, which covers the compensation and pension value earned to the end of December 31 of the respective performance year for the CEO, CFO and the three other most highly compensated executive officers.

The Canadian Securities Administrators require executive compensation disclosure for all Canadian public companies.  While OAC is not subject to these requirements, OAC has voluntarily adopted similar disclosure as a good governance principle and to enhance transparency to Plan members.  The CD&A is also consistent, although more transparent than some, with how other Canadian pension plans capture executive compensation information in their annual reports.

As recommended by the Human Resources Committee at its meeting held on February 20, 2018, the OAC Board approved the 2017 Compensation Discussion and Analysis for inclusion in the Annual Report.

HR Matters

Following discussion, and as recommended by the Human Resources Committee at its meeting held on February 20, 2018, the OAC Board approved the 2017 CEO compensation awards and payments.

2018 Governance Committee Work Plan

The Governance Committee mandate requires the Committee to establish its Work Plan annually.  The Work Plan describes how the Committee will meet its mandate obligations.

The Governance Committee approved its 2018 Work Plan, which was prepared to comply with the Committee Mandate, as approved by the OAC Board at its meeting held on December 14, 2017.

2017 Enterprise Political Donations and 2018 Plan

In accordance with the Political Donations Policy, the Vice President, Government Relations is required to make a recommendation to the Governance Committee at its first scheduled meeting each year regarding OMERS enterprise plan and budget for political contributions in the coming year. A report on contributions made in the previous calendar year is also required, with a summary report posted to OMERS public website in order to promote transparency with Plan members.

The Vice President, Government Relations presented the enterprise donations made in 2017 and proposed donation plans for 2018.

Following a question and discussion period, the Governance Committee approved the 2018 Enterprise Political Donations Plan.

2018 Technology Committee Work Plan

The Technology Committee mandate requires the Committee to establish its work plan annually.  The work plan describes how the Committee will meet its mandate obligations.

The Technology Committee approved its 2018 Work Plan, which was prepared to comply with the Committee’s Mandate, as approved by the OAC Board at its meeting held on December 14, 2017.

2018 Work Plan – Human Resources Committee

The work plan for the Human Resources Committee is the document developed and approved by the Committee to identify the activities and delivery to be carried out by the Committee to meet its obligations under the HRC mandate approved by the OAC Board.

The HRC approved its 2018 Work Plan, which was prepared in accordance with the HRC mandate, as approved by the OAC Board at its meeting held on December 14, 2017.

2018 Investment Committee Work Plan

The Investment Committee mandate requires the Committee to establish its Work Plan annually.  The Work Plan describes how the Committee will meet its mandate obligations.

Following questions and discussion, the Investment Committee approved its 2018 Work Plan, which was prepared to comply with the Committee Mandate, as approved by the OAC Board at its meeting held on December 14, 2017.

Investment Performance Reports to the SC

At its meeting on May 22, 2014, the OAC Board agreed that quarterly reporting on the results of the Primary Plan fund would be released to the Sponsors Corporation once the Audit & Actuarial Committee met and reviewed the quarterly financial results.

The AAC approved the OMERS Investment Performance and OMERS Asset Mix Exposure Report, as at December 31, 2017, with both to be provided to the SC.

Assurance & Advisory Charter

The Audit & Actuarial Committee mandate requires the EVP, Global Head of Assurance & Advisory to review and, if appropriate, recommend to the Committee changes to the Assurance & Advisory Charter.

As there were no fundamental changes proposed since the Charter was last approved in February 2017, the AAC approved the Assurance & Advisory Charter, effective February 15, 2018.

2017 Risk Adjustments for Compensation Plans

The risk adjustment is a compensation design feature that has been incorporated into compensation plans to enhance plan governance by incenting and rewarding teams for achieving the desired risk culture of the organization.

Following questions and discussion, the Human Resources Committee approved a 0% risk adjustment for 2017 for all compensation plans organization-wide.

2018 Audit & Actuarial Committee Work Plan

The Audit & Actuarial Committee mandate requires the Committee to establish its work plan annually.  The work plan describes how the Committee will meet its mandate obligations.

Several amendments suggested by the Committee were incorporated into the 2018 Work Plan.

Following questions and discussion, the AAC approved its 2018 Work Plan, which was prepared to comply with the Committee Mandate, as approved by the OAC Board at its meeting held on December 14, 2017.

The Technology Committee received updates on various matters, but no final decisions were made by the Committee at the meeting.

A special meeting of the Investment Committee was held on January 30 to consider two pending investment transactions.  Due to legal and contractual reasons, the Committee’s decision on the first transaction is required to be kept confidential.

The Committee deferred a decision on the second transaction and decided to adjourn the meeting, with the intention to reconvene once the transaction was at a more advanced stage.

The meeting was reconvened on April 16 to make a decision on the second transaction – the sale of Airports Worldwide.

Sale of Airports Worldwide

OMERS Infrastructure sought the approval of the Investment Committee to proceed with the disposition of Airports Worldwide (“AWW”). AWW is a portfolio of airport assets and management contracts located in the United States, Costa Rica, Northern Ireland and Sweden.

Following a question and discussion period, the Investment Committee approved the sale.

In a press release issued April 24, 2018, OMERS and OMERS Private Markets announced that OMERS Infrastructure agreed to sell Airports Worldwide to Vinci Airports. The transaction is expected to close later this year.

2018 Risk Oversight Committee Work Plan

The Risk Oversight Committee mandate requires the Committee to establish its work plan annually.  The work plan describes how the Committee will meet its mandate obligations.

Following discussion, the ROC approved its 2018 Work Plan which was prepared to comply with the Committee Mandate, as approved by the OAC Board at its meeting held on December 14, 2017.

Acquisition of Leeward Renewable Energy

OMERS Private Markets sought the approval of the Investment Committee to proceed with the acquisition of Leeward Renewable Energy LLC. Leeward is a leading wind power asset owner, operator and developer of wind projects in the United States across 19 operating projects with a total installed capacity of 1.7 GW.

Following a question and discussion period, the Investment Committee approved the acquisition.

In a press release issued March 22, 2018, OMERS announced the agreement to acquire Leeward from affiliates of ArcLight Capital Partners, LLC. The transaction is expected to close in the third quarter of 2018 and remains subject to customary approvals.