OMERS 2025 Annual Meeting Transcript

Good morning, everyone, and thank you for joining us today. My name is Tito Adebajo, and I'm pleased to offer the following land acknowledgement on behalf of OMERS. I first want to begin today's annual meeting by acknowledging that the land on which we are gathered, on which our buildings stand, our people work, our business operates, is part of Treaty 13, the traditional territory of the Mississaugas of the Credit, the Anishinaabe, the Chippewa, the Haudenosaunee, and the Wendat peoples. As an immigrant to Canada, my family came in search of new opportunities and a better life. However, while I may call Canada home, it is crucial to recognize the indigenous peoples who have cared for it and have called it home long before any of us have arrived. We give thanks to them as the traditional caretakers of this land, and for their care and stewardship of these lands and waters which has shaped this place since time immemorial. Throughout history, and to present day, indigenous peoples have faced, and continue to face, the hardships brought on by colonization. However, through it all, they have remained strong and have persevered. Their fight for justice, equality, and the preservation of their culture in the face of all challenges is an inspiration and a powerful example of what it means to care for this land and for others. We are convening here today in the spirit of reconciliation as part of our commitment at OMERS Oxford, and to align with Call to Action 92 of Canada's Truth and Reconciliation Commission. Part of our goal is to enhance understanding, empathy, and education on the devastating history of indigenous peoples in Canada, and to celebrate the vibrancy and resiliency of indigenous peoples today, despite this traumatic history. At OMERS Oxford, we recognize the importance of building bridges between cultures and between people and have a responsibility to engage in the meaningful, continuous process of truth and reconciliation. May we learn from the legacies of those who came before us, listen and engage with the indigenous peoples and communities who are presently with us, and together, build partnerships to create a better and brighter future for everyone. Thank you. (Tito speaking indigenous language)

Now I would like to please welcome on stage our Chair of the Administration Corporation Board of Directors, George Cooke. Thank you.

Good morning. Tito, thank you very much for that land acknowledgement. And for all of you in the crowd, just for some background, Tito is an Analyst on our Alternative Investments Team in Capital Markets. We are coming together for this annual meeting at a very challenging time, perhaps a serious understatement. It has been heartening, in recent weeks, to see Canadians bonding together, and if we were attending any number of public gatherings in Toronto, we would be starting with a singing of "O Canada" to recognize our renewed nationalism. I will spare you my singing. But I do want to acknowledge that we are a group of proud Canadians demanding respect for ourselves and for our sovereignty.

This morning, we will share our solid financial results and update you on matters of interest. From my perspective, this is a very troubling time. In fact, maybe the most troublesome that I have witnessed in my lifetime. It's characterized with economic, social, and geopolitical uncertainty, democratic institutions are under serious attack from within and from external forces. Misinformation is widespread. We face the challenges and opportunities of climate change, along with the challenges and opportunities arising from technological change never before experienced. With all of this facing us, it pleases me to see OMERS members coming together today connected by our pension plan. Our message this morning will be one of confidence. I have enjoyed a front row seat for over a decade, and I strongly believe that your plan is well-positioned and led by an extremely capable team that will successfully navigate all these issues. There may be good quarters and bad quarters, but this team has demonstrated that they can, and will, protect your plan and your pensions.

We're excited to have a record number of attendees this morning. There's over 400 people here with us in person, and I'm told another 2,000 that are joining virtually. Welcome, to everyone, and thank you for your interest. Many of you are aware that the Ontario government is undertaking a governance review of OMERS. It's not our place today to weigh in on this review other than to say that we are committed to cooperating fully. You will find material, including an FAQ document provided by the government's review team posted on OMERS' website. This morning, there will be five presentations, beginning with Jonathan Simmons, OMERS Chief Financial and Strategy Officer, followed by Blake Hutcheson, President and CEO of OMERS Administration Corporation, followed by Celine Chiovitti, Chief Pension Officer. Next will be Max Cananzi, Chair of the Sponsors Corporation, followed by Sponsors Corporation, CEO, Laurie Hutchinson.

Following these presentations, there will be a question and answer session of approximately 45 minutes, allowing us to end the meeting as scheduled at 11 o'clock. For those of you joining virtually, please submit your questions using the ask a question function on the right of your screen. For those in-person, you can see floor mics in the aisles. With so many members attending today, I'm going to do my best to keep us at time, while also allowing those who wish to ask a question to do so. We're going to limit it to one question per person per trip to the microphone, and I ask you to please keep your questions focused and brief so that as many as possible will be able to ask their questions. For those that have questions related to their personal circumstances, this, per se, is not the correct forum. We have several members of the pension team here today at the back of the room who can speak with you directly. With those opening remarks, Jonathan, the floor is yours.

Good morning, everyone. It's great to see so many familiar faces in the crowd, and a few new ones. I'm Jonathan Simmons. As George said, it's my privilege to be the Chief Financial and Strategy Officer for OMERS. And my job this morning is a really simple one, I get to tell you about the results from the year that was just behind us. And I know that when we come to questions, many of your questions are gonna be about the here and now, but if you'll bear with me, I think it's a good opportunity to look back. We're now deep into the current year, but let's have a quick look back at 2024.

2024 was a successful year for the OMERS pension plan. The primary plan posted a return of 8.3%, that was $10.6 billion of investment income, which were compounded into the value of your pension plan. And it was above our benchmark that we set at the beginning of the year of 7.5%. So, always good to see when OMERS is exceeding the benchmark. At OMERS, we measure time not in quarters, but in quarter centuries. Our youngest member is 14, our oldest is 109, and therefore the long term is really important to us. And our 10-year returns are a very solid 7.1%, slightly behind our benchmark of 7.3, but very, very strong. Those returns have compounded $70 billion of investment income into the value of the plan over that time period, and that has made a tremendous difference to the level of funding that we enjoy, and I'm gonna get to that later in my presentation. But the headline is that funding has improved again, we're now up 1% on the year, to 98%, and we're doing that with a more conservative discount rate. And I'm just gonna unpack that concept as I go through the rest of my presentation. So let's get into a little bit of detail.

There's a lot of numbers on this slide, but not only was 2024 performance above benchmark, it was also better than 2023. And I'm gonna try and interpret all of these numbers for you in a way that makes it a little easier. These are the results of our seven strategic asset classes, which our investment teams invest in throughout the year. And five of those strategic asset classes, those are the ones with a little green up arrow, performed better in 2024 than they did in '23. One of them performed about the same, that's our public credit. And only one of them performed lower than in the prior year. That is a terrific improvement. And the one that performed a little low was government bonds, and that's because interest rates are increasing in the long term, and actually that's a good thing for us, because we're savers, and higher long-term interest rates are better for savers. When I think about why the performance in 2024 was what it was, well, the major return drivers came from a number of places. First of all, we had very positive performance from our exposure to the U.S. dollar. It added 4% to the value of the plan, and that impacted all of the asset classes I've circled in that blue chart. We had double-digit returns from public equities and from private credit. So, two years of back to back, very positive returns in public equities, but also in credit. And for those of you who have been coming to this annual meeting for a few years now, you would've heard me and my colleagues talk about how the investment team are taking advantage of higher interest rates to invest in the credit business, which is where OMERS lends money to businesses. And as you can see, that's generated another very strong performance for us in the current year.

Now, not every asset class performed positively last year. I acknowledge that. We had quite strong performance in our operating income from our real estate business. When I look across the portfolio, I'm very pleased to see how well-leased the portfolio is. 92% occupancy here in Canada, with record rents being realized. But that asset class has struggled a little bit as interest rates have gone up, valuations have gone down, and so that's something that we're keeping an eye on, and we are focusing on the quality of that portfolio very carefully as we go forward.

So those are short term returns, but what I said earlier is we're really interested in the long term. So those of you that were at the annual meeting two years ago will remember that I put up this chart. This was a chart that was published on our '22 results by the London Business School, and was published in a publication called, "Global Sovereign Wealth Funds." And I go back to 2022, because that was the year in which they indicated that OMERS performance, when they surveyed 36 global funds, was leading in that year. And that was a very important year, because as you can see in that year, only three sovereign wealth funds and pension plans that year were able to generate positive returns, and OMERS was one of them. And that was a very difficult year in investment markets.

My team grabbed hold of this chart, and they actually did a study for me. I asked them the question, "How would that look since OMERS emerged from the pandemic?" And in the aftermath of the pandemic, that leadership position on that league table, now this is not 36 funds, we could only get data for 30, shows that OMERS continued to be industry-leading over that two-year period. Last year, I showed you the three-year history. And by the way, the other significant Canadian pension plans are indicated by the maple leaf on this chart. And as you can see, OMERS performance continues to be very strong with a three-year 8%. And so the question that you should all be asking me is how does that chart look today? Well, I'm really pleased to see that, over that period, OMERS has averaged an 8.1% investment returns. We are solidly in the top part of the first quarter, and it is testament to the strategies that our investment teams have been following over that time period. It is the long term returns which pay pensions, and as CFO, when I see a chart like this, I feel very good about what I see.

Now, it's not only returns that matter, expenses matter, and they need to be managed. This chart tracks our management expense ratio in basis points, which is a measure of the cost of our pension plan over a period of time. I've chosen to give you five years of history here. If I do any more than that, the chart gets really small. And we bounce around a management expense ratio in the high 50s, below budget for the current year, which is something which I'm also pleased to see. And it goes up in periods of high performance, and it's a little bit lower in periods of lower performance. And it's driven by very many factors. When we invest in private assets, costs a little bit more to manage our money. We think it's worth it. When we diversify the portfolio into foreign countries, we get better overall diversification in the portfolio, but it costs a little bit more money, and we think it's worth it. And so I would not be surprised to see this ratio stay where it is, or perhaps creep up a little bit, as we continue to diversify the portfolio globally, and as we continue to diversify the portfolio into certain funds in the private equity space over the coming years. And we're managing it and we're monitoring it very carefully.

When you take into account the investment income that we earn, and you deduct the expenses that we pay, and you factor in the contributions we take in, and the money we pay out, we get to see how the fund is growing. And the pension plan has continued to grow steadily over this 10-year period. Not every year, but the trend is certainly up. And that really matters, that matters for a number of reasons. When we grow, we have economies of scale, and that is a benefit to all of our members, because it enables us to manage our costs. When we grow, we have wider and deeper access to a broader selection of investments, and that means we can diversify the portfolio more fully and lower the risk of unstable investment returns into the future. And finally, when we're growing, we can attract talent. And that is really important to us, because, at OMERS, we want to attract the very best investment talent we can, because managing the money for all of you is a sacred task, and we want the best minds focused on getting the returns to pay your pensions.

And our balance sheet today is exceptionally well-rated. Four global credit rating agencies rate the strength of our balance sheet, and as you can see here, three of them have rated us AAA, which is the highest credit rating available, and one has rated us on the second level. When you compare that to the G7 countries, OMERS credit rating is better than five of the G7 countries. It is stronger than the United States, it is stronger than Japan, it is stronger than the United Kingdom, and it is certainly stronger than France or Italy. And that position of financial strengths allows us, when we need to, to borrow money, to leverage our investments, and improve the returns for all of you.

And those investments and that balance sheet is rated strongly for many reasons, but one of them is because of how well-diversified we are globally. This chart shows the diversification of our portfolio over what we call our asset classes. And each of these asset classes has a very important role to play in our portfolio. Some of them, like private credit and public credit, are there to generate cash, because we need cash to pay our pensions. Some of them are there to seek out long-term capital appreciation. That could be public equities or private equities. Some of them are great hedges against inflation, because, as you know, inflation is the enemy of our pensioners, and we want to inflation-link our liabilities, and so infrastructure and real estate provide a handy hedge against inflation. And then some of them just provide liquidity, and government bonds are the best example of that, they provide tremendous liquidity to the portfolio to allow us to pledge them in times of difficulty and collect a coupon along the way. And many of our asset classes perform more than one function, very important to us.

And it means that we are in the business of delivering risk-adjusted returns. And when you have a portfolio as diversified as this, the objective is to have steady, positive returns throughout time. That means that we're not in the business of seeking the highest returns, although we certainly are ambitious. We're in the business of seeking risk-adjusted returns. And that means that in periods of excess performance in capital markets, you might see us not at the top of the heap. But that's okay, because we are very, very focused on managing the downside. And one of the ways that we manage the downside is not just with diversification by asset class, but it's diversification by geography. And this is a chart that shows how geographically diversified we are around the world.

Canada is a small country, we represent about 3% of global Gross Domestic Product, and therefore it's essential for a plan of our size to diversify globally. But we are proud Canadian investors, Canada will always be core to our portfolio. Today, we have about 20% of our book in this country, and Blake is going to talk a little bit more about our commitment to Canada and the assets that we have when he takes the stage. And yesterday, we had more than half of our assets invested in the United States, and we know that will be a question on your mind, and so we expect that we'll have a conversation about that as we go through our presentation this morning.

OMERS has a tremendous impact on this province. More than 1 in 11 households are impacted by us. Last year we took in $5.6 billion of contributions, half from our members, half from our employers, and we paid out $6.5 billion in benefits. Sometimes people ask me, "Jonathan, are you bothered that we pay out a little bit more in contributions than we collect?" So we pay out a little bit more in benefits than we collect in contributions. And the answer to that? Not a bit. We designed the asset mix to account for this eventuality, because we knew it was coming decades ago. In fact, when I project the cash flows of our pension plan, the contributions that come in, the benefits that we pay out over a 20-year period, my estimate is that we'll end up paying about 1.7% of our fund out every year as a net pension payment. And when we're earning 7, 8%, that is no difficulty for us as we face the future.

Those benefits that we pay out have a terrific impact here at home. They contribute almost $14 billion to Ontario's economy. About $9 billion comes from the spending of our pensioners in retirement. And another $5 billion comes from the assets that we invest in here in the province. Our plan generates about $4 billion of tax revenue for our governments. And guess what? Those get reinvested in public services, creating a very virtuous cycle, and supporting our workers in our municipalities, but also in our province and our federal government. And jobs. Our plan generates or contributes to about 150,000 jobs in this province. About a third of those are in rural communities, and about a quarter are among young people, and that makes me very proud when I see statistics like that. And I hope you feel the same.

If I got to have one chart in my annual presentation, this would be the one. This is a chart that tracks the progression of our funded status over the last 12 years. And why do I go back to 2012? Well, 2012 was the low. The funded ratio is the ratio of our assets in our plan to our liabilities. And that's the light blue lines sloping up from bottom left to top right. And in 11 of the last 12 years, our fund's status has improved, either by virtue of an increasing funded ratio, or by a lower discount rate, and I'll get to that in a minute. That is what we've been focused on, building up the funded status of the plan to ensure the sustainability of the plan into the future. And so, financially stronger, only one year did it dip, and that was the year when inflation ripped high. We've been able to cope with that high level of inflation, and as you can see, the funded ratio has improved again. And the discount rate, which, in simple terms, is the interest rate that we use to figure out the current value of our liabilities we've been taking down. And when we reduce our discount rate over time, that lowers the risk of the plan into the future, because it makes it easier for us to earn the investment returns to pay the liabilities, and that improves the sustainability of the plan as we go forward.

That's it from me in terms of a presentation today. I'm about to hand over to Blake to talk about where we stand today and about the future. But before I do that, we'd like to show you a short video about how we're building tomorrow together. Thank you for listening.

First of all, I want to thank my partner, Jonathan, he's a reasonably good speaker. And we heard a lot today, but the one that stuck out to me was, I don't know if you noticed, that your rating by the bond rating agencies of the OMERS plan is a little higher than that of America, the United States. I don't know if you heard that piece, but that's probably worth an applause.

So hello, everybody, and welcome. It's so great to see so many familiar faces out there. Thank you for those of you who are here, but also so many on the screen who found a way to attend this meeting, it's the biggest attendance we have had, I think, in our history. And all the best from the OMERS family and my personal family to all of you. My agenda today, I was gonna start with a little bit of current context, 'cause I know so much is happening out there, and what is likely on your mind. We're gonna look back at history a little bit, share a little history, 'cause it helps us understand today's context. I'll share a few more facts and figures from 2024 to augment what Jonathan said, and then I'm gonna communicate some thoughts on our plan looking forward. I also wanted to take this moment very sincerely, 'cause I get one opportunity a year to say this, and that is at the annual meeting, just to communicate my gratitude for the opportunity to work with, and for, all of you, our members. As a CEO of the Administration Corporation, the idea of waking up every day knowing that we can impact 1 out of 11 households every year when we make good decisions on your behalf is so inspirational. And I speak for my entire global executive leadership team when I say it is truly an honor to serve you.

So to begin with some context, I'll just park it there for a second. I want to acknowledge, as others have, that this is a pretty complex, confounding, and difficult period, we're all experiencing it each and every day in the corresponding work that we are doing on your behalf to navigate these historic times. I also know many of you have questions about tariffs, and the other threats to our plan, to our nation, and as George mentioned, indeed, to our sovereignty. So before I speak to my slides, I just wanted to address these concerns head on. And in doing so, I'll use word association, which always helps me frame my thinking. And the words that immediately come to mind are sad, focused, and a very powerful word that Jonathan's already touched on, which is that of diversification. And I'll start with sad. You know, speaking from my heart, to all of you today, I can say that I'm not entirely shocked by much of the behavior of Donald Trump. Throughout my real estate career, I have had many opportunities to meet this individual, this is just how he rolls, unpredictability is his motto. And unfortunately for all of us, I think we are in for a roller coaster ride between now and the day he hands over the keys. Nonetheless, our thoughts are with all those in Canada, the United States, and beyond. And we are, as you know, all being directly impacted by these tariffs, but also other concerning policies and positions. This reality is disheartening, it's disturbing, and I'm just gonna say it, frankly, sad, given the long-dated relationship between these two great nations. However, let's keep the long term perspective. Common sense and common goodness will prevail, particularly between our two nations. In the hierarchy of the things the United States should be worried about, Canada should not be on that list. Look at the front page of the Global Mail today, and the discourse that's going back and forth between the United States and China, as an example.

And through our deep U.S. relationships and partnerships, increasingly we're hearing apologies, and strong views that one individual, regardless of the tone or title, does not speak for the vast, vast majority of Americans. And it may not seem like it today, but cracks are emerging from these hard-baked positions. The U.S. will increasingly need their closest and greatest ally, and we're confident that time will be our friend. Even in recent days, you've seen Republicans cross the house, from a Senate perspective, to stand up for our friendship, for our long-dated relationship. And frankly, in some ways this is a wake up call for Canada, and I think you've read about it and thought about it, it's just in disguise. And for OMERS, we're already jumping on a few strategic buying opportunities that capitalize both on this moment and our healthy balance sheet. And I've been speaking to our equity teams in the last few days particularly, and we have been farming out our equity book, I'll talk more about that in a second, bringing it down, down, down to the lowest point it's ever been, it's about 18% of our portfolio today. For years, it was as much as 50, anticipating a pretty hard knock, so we're very well-positioned. We've been stockpiling cash so that when others don't have capital, we have capital. So we've already started to deploy, particularly in some equities, and we're getting opportunities for assets that heretofore have been tough to buy in recent years. Great equities with great dividends, high quality, that may not come back this year, but we're a long-term investor, it will come back for you in the years to come. So we're really taking advantage of this moment in many ways.

The second word I'm gonna draw on is the word "focus." And I learned from a mentor really early in my career, when you're in an office, and you have all seen it with office politics, and people are playing games, and you're at the water cooler, and I was like, "How do I defend against that?" Or Big P Politics, when you read the papers, you look at tweets, you look at social media, you look at whatever's on the news, it can drive you crazy. And the best advice I ever received was, when that happens, just put your head down, focus, focus, focus in at work, everybody, and maybe in those moments, everybody doesn't love you, but they will respect you, and that's what we're doing here at OMERS. As you know, I hope, that we have an extremely, I think terrific, well-conceived 2030 strategy for OMERS. It's been approved by both boards, we feel it will serve you incredibly well, our members, over the next two, three, four, five years. And every component of our platform has an annual business plan that builds to that date. As a result, I can promise you that every single one of us is focused with our various responsibilities and authorities on this plan, on our priorities, on your priorities, and the things we can control and influence. We're not gonna get distracted nor demoralized by these taunts or tweets or turbulence as we continue to deliver on the pension promise with a vengeance. A promise is a promise, that is our job. And trust me, we are focused on it with every single interaction every day.

And the third word I am gonna share with you is, "diversification," and Jonathan's already spoken to it. A very wise investor once told me, "If you wanna get extremely wealthy, put all your chips on one square, and if you wanna stay wealthy, diversify, broaden your shoulders, take on more so that you can weather storms. When something's down, something else is up." And I'm proud to say, over the last few decades, OMERS has been diversified, diversified, diversified, I'll talk to that more in a minute, by geography, by revenue streams, by industry, by our backgrounds, by experience. And this diversification is paying off. And in fact, much of what we've done in the last two or three years is to survive and thrive through periods just like this one.

And so for example, your plan, your portfolio, 'cause you own it, today, has about $25 billion in equities. As I say, it's the lowest, as a percentage of our book, that it's ever been I think since the 62 years of inception, we brought that equity portfolio down. And as Jonathan said, in a great year when equities roll, other plans may do better, 'cause they have a much higher proportion of equities, because in a difficult year, we're protecting the downside. You have about $35 billion in fixed instruments, credits, paying predictable income streams. You may not crest and do extraordinarily well, but they're in a point where we can get high single digit returns, $35 billion, we have more in that today than we do in our equities. You have 30 terrific infrastructure assets, with contractual revenue streams. You have 25 big companies that you control through our private equity platform. You have 850 real estate assets through the platform that you own, as you know, called Oxford Properties. And all of this is run through 14 offices in 10 timezones around the world.

So when we look at our portfolio with this tariff sieve, which we've been doing day in, day out, with, and at the request, of our board, here's how I'm kind of looking at it, and I hope it gives you some comfort. And it's not easy, I'm not gonna say it's easy. But as we look at it, our equity portfolio, as I say, it's gonna be volatile. It is just the case. It will be volatile day in, day out depending on who says what at what moment. Yesterday was a good example. The markets rolled a couple of untimely thoughts or statements, and the day ended up not so well. So just get used to it. Remember, we're a long-term investor, we're trying to buy things today that we couldn't buy a year or two years ago, we don't know whether they'll come back this year. But that component, which, again, is only 18% of your portfolio will be volatile. That's our life. The credit book, very predictable. $35 billion is very predictable. When we look at our infrastructure assets, the 30 big infrastructure assets, there are two that can get directly impacted by these tariffs. Actually, one through tariffs, and one through decisions that Washington may take, that would be antisocial towards that one investment. So, 28 strong ones, two we're worried about.

Of our 25 big private equity businesses, frankly, most of them are business to business, intra-United States, or intra-Canada, that aren't affected by these tariffs. They can be affected by the general recessionary times, if they come, and other things, but they're not affected by these tariffs, because we're not in manufacturing, we're not in the car business, we're not in things that get directly impacted. And when we look at our real estate business, we have the best assets in the best cities the world over, as I said, 850 assets. Our hotels are doing well, our retail's doing well, our office products, doing well. We do expect some diminution in rents, and some setbacks in the industrial space, because as supply chains are so uncertain, people just aren't making decisions. And generally speaking, people may not make big decisions. But your portfolio's intact.

So, generally speaking, we're, I think, very well positioned, given all the noise out there, particularly on a relative basis. Where we can't duck the storm, and you can't duck the storm, businesses can't do it, consumers can't do it, is higher inflation. These protectionists tariffs will drive higher inflation. What happens to the cost of money, what happens to your staying power? And those are the places that'll affect all of us. Let's just hope it's short dated. Let's hope, as I say, common goodness and common sense prevails, particularly vis-a-vis Canada. But on balance, we feel that we are as well or better positioned as any pension plan to get through this uncertain period.

A few other reflections, listen, we live in the greatest country on the planet. Thank you. We say it, we believe it, it's fundamentally true. We also live in the strongest and most resilient province in this nation. And OMERS, among a very few other Canadian DB pension plans, is the envy of the world, a platform that most admire greatly, and few can emulate. And as a reminder, we have found a way, over 62 years to pay pensions on time and as planned. And we've managed to succeed through 11 presidents, we're working on the 12th. So please know that we have your back, we will see through the cycle. I often say we find ways to walk between the raindrops. And the one thing I've learned about pensions is they don't care who's president, they don't care who's prime minister, they don't care what's happening geopolitically, they don't know what happens, they don't know what inflation is, they don't know what interest rates are. Pensions don't know that stuff, and they don't care. They just know they need to get paid, and that's their job, and that's our commitment to you today, and always.

I'm gonna augment my comments just with a few slides. This is actually the first cover page of the annual report the first year that OMERS opened its doors. And if you read, "OMERS removes the burden of planning, financing, and administering a pension plan for municipalities." An inspired idea, that statement was as true then as it is today. And when I look back, 'cause I did my homework in that year, you had $4.8 million. That's with an M, 4.8 million. Today, almost $140 billion. In that year, you had 8,000 members. Today, 640,000 members. In that year, you had 12 employees. Today, we're doing all this with about 2,700, 1,700 at Oxford, 1,000 at OMERS. In that day, you had 160 employers. Today, 1,000 employers. So we have come a long way in 62 years. Think about where we will head in the future. And as Jonathan said, in the last 10 alone, we've been able to get investment returns of $70 billion, which is half of your equity today of roughly $140 billion.

I won't go back and bore you with a lot of the history, but this speaks to the point both Jonathan and I are making on diversification. We have tried to diversify this plan with every year, particularly in the last 30 or so years. For the first 35 years of the plan, you had a skeletal staff, really good people who were picking fund managers for equities and credits primarily. But you weren't able to directly invest in hard assets in many of the things we do today or privates. And it was around just before the turn of this century that smart people sat around, because all of us stand on the shoulder of the giants that came before us, and said, "You know what? We should get in the direct investment business." And with a little, tiny investment, I think it was $10 million in a hospital here in Toronto, the infrastructure platform was born. And our infrastructure business, the one you own today, I would put against the top five in the world, with roughly 25% of the portfolio you have with the 30 great assets that I've talked about. It was a seed of an idea.

We bought Oxford Properties in 2001 for $2.1 billion, it was a public company. Today, that business, assets under management are close to $80 billion. The business you own, Oxford Properties, I would say is one of the five greatest real estate companies on the planet. Our private equity business was also started early after 2000. We took the CFO of this business, don't get any ideas, Jonathan, and we said go start a private equity business. And that was a seed of an idea, and today, we have an unbelievably competitive, primarily North American private equity businesses competing with the household names that you read about, in papers here, there, and everywhere.

So for about 35 years, we stayed in Toronto, outsourcing. The next 10 or 15 years, we really built our muscles as direct investors, including in capital markets, and more and more, taking on great people to invest your money at a lesser cost. And then we said, okay, in order to get wealthy, put all your chips on one square, if you wanna stay wealthy, diversify. We started to set up global offices. So we set up an office in New York, we set up an office in London, we set up an office in Singapore, we set up an office in Sydney. So, today, we have incredibly broad shoulders for storms like this one. And I will say to you, between now and 2030, which is our plan, we don't intend to put out more new offices, we don't actually think we need more muscles in terms of the way we're investing your capital. But what we do, and what we're fully committed to doing, is just getting better at everything we do. And that is quality, quality people, quality markets, quality assets, and the one thing I know from a lifetime investing is when you invest in quality people, quality assets and quality markets, you'll see through cycles. So that's the story of our diversification history.

People ask the question, and Jonathan touched on it, "Do we have enough in Canada?" You've seen politicians say, thou must, you know, think about at least, investing more. You see lots of articles in the papers saying, "Canadian pension plans ought to be investing way more in Canada." And I remind them, and I hope you appreciate it, when a politician says that or a journalist says that, it's not the politician's money, it's not the federal government's money, it's not the province's money, it's not my money, it's your money. And as fiduciaries, it's our job to protect your money, and to make sure that we make good decisions for you. And I will tell you that most of the criticism you're hearing is not directed at OMERS. In fact, very, very, very little. It's mainly against some of the other big plans. I won't mention any names, but CPP comes to mind. And so what you're finding out is, a lot of the other plans have been a little less cognizant of this nation. We've never lost sight of where we are and the fabric in which we invest.

So you will be very proud to know, we own, with partners, some of these, Banff Springs Hotel, Jasper Park Lodge, Chateau Lake Louise, we own 15 or 20% of the best office buildings in Vancouver, Calgary, Toronto, we own great shopping centers, Yorkdale, Square One, Scarborough Town Center. If you don't mind, go spend a little money in all three, it helps you, helps us. We own Bruce Power, 50% approximately, which provides 31% of the power supply for this province. Largest nuclear plant in the world, tremendous asset that you own. You own Teranet, which is the Land Registry System here in Ontario. As Jonathan mentioned, we own 5% of Maple Leaf Sports and Entertainment Corp, the Maple Leafs, the Raptors, the Marleys, the FC Soccer Team, and this year's Great Cup champions, the Argos. That's where it's happening. And we own many, many great Canadian equities, including all the Canadian banks. I could go on. The point is this, we have been very heavily invested in Canada, we will continue to invest in Canada, and I will make this point, we wanna invest more in Canada. Notwithstanding the fact that Canada is 3% of the global GDP, and we have 20% of our book, if you were a Martian, you'd say, "Why would you do that?" The reason is we understand the rule of law, like you, we care about this country, we have relationships in this country, we know the currency, and we are at a point, as fiduciaries, 'cause we're never going to not do the right thing for you, all things being equal, if the governments can create a condition where we can invest more of your money and do better for you, we're at a point where we're very happy to engage in those conversations. We're just not gonna be told to invest just because, because it's your money, nobody else's.

A couple of other very quick highlights. This just gives an order of magnitude of the size of OMERS. Again, we have roughly 140 billion of equity, that translates into a balance sheet of roughly 230 billion when we put some debt on some of our holdings. And with assets under management, 'cause we manage some third party capital, it's about $300 billion. We have 6,500 various stocks across the enterprise that we invest in, again, for diversification. Last year alone, in a difficult year to make things happen, we invested roughly $22 billion, not invested, we had transactions, some sales, some acquisitions, and because of our bond rating agency, we raised about $3.2 billion so that we can buy things and finance things very inexpensively on your behalf.

I don't always put this slide up, it's kind of been a fun week for us, we need some good news, I'll just share a few of these. We, OMERS in Oxford, get hundreds of awards a year. And one that's particularly nice to share with you, there's an organization called Great Places to Work, every organization in Canada wants to get recognized by them. They pick 50 top companies across Canada in various categories. Over 1,000 companies apply to be recognized. This year, just last week, there was a big GALA event, and we were named, I think seventh, out of the 1,000 applicants in terms of Great Places to Work in Canada. We also were among the top in trusted senior executives, women, and young talent. And why that means something to you is we are creating a culture where we can attract unbelievably great people to do unbelievably great things for you. And the only way to get results is having a great culture, a great team, a great brand, be forward-focused. When those things happen, results come. So it really bodes well for everyone in this room that we can attract the right talent, and we've set up a culture that you'd be proud of.

Oxford, thank you. That was one of our directors that started that. Thanks. Thanks, Dan. Wasn't staged. In terms of Oxford alone last year, was named by Top, top, what is it? Fast Company Magazine, as one of the world's most innovative companies, one of the top 10. Also, we built an office building down in New York that we sold to Google, which was the single, won the biggest award globally for an office construction project at a convention in France. But, big honors. I won't go on. The reason I share this news with you is just so you know the sorts of things we're doing on your behalf, it translates into results, and frankly, we needed some good news this morning.

In terms of our plan, and I just have two slides left, for 2030, the north star for us, and every one of our employees can recite this as well or better than I can, 1, 2, 3, 4, 5, our north star between now and '30 are those five things, 1, 2, 3, 4, 5. First, we intend for you to be 100%+ funded 100% at a minimum, funded between now and 2030. The 140, roughly, billion dollars you have will be roughly $200 billion between now and that period, so that's a growth of 50%. We are very focused. Three is for three continents. If we cannot be great at what we do, we do not go there, we do not have the right to invest your money. So we are focused on three continents, 12 countries, about 15 cities, and we are very, very prescriptive as to where we go so we can actually be extraordinary at what we do.

We will be roughly $400 billion of assets under management, so that includes debt, and that includes third party capital. So fast-approaching a half a trillion dollar enterprise, which is a local company based in Canada, global in its reach, almost a half a trillion dollar enterprise, which helps us, by the way, attract the best talent in the nation to want to work on your behalf. And five is when we get a five-year real return, and that means about a 7 or 8% nominal return, depending on inflation, a 5% real return back to the first objective, we should be 107% funded between now and 2030. So that's our north star. We have business plans against all of this. I just want to tell you, directionally, where we're headed, and you can hold us to account between now and then.

This is my final slide. I started by saying it's an honor to work with and for all of you, I mean it from the bottom of my heart. And I can't tell you how fun it is to get out of our office, and all the pressures on Bay Street, and math, and people problems and all, and just get out, when I can, to go out and meet our members across this great province of Ontario. And I want to thank those of you, many of you in this room who have hosted us, seeing the sites, seeing what you're up to, meeting your people, it's incredibly inspirational, it's incredibly important for all of our team. We try to get as many as possible to be reminded just why we wake up in the morning. So I want to thank you, sincerely.

And here's what happens. Every meeting we're at, we get some really good questions, and someone always stands up and they say, "Hey, Blake, I've been here a long time. I'm retiring in 7 years, 4 months, 11 days, and 9 hours." "Am I good?" And the short answer is, we will do our level best to ensure that's true, we have done so for 62 years. The short answer is, you're good. There you go. And then I hear this. Now we own a bit of the Leafs, so they're gonna win the cup this year. And we've talked a lot today about the complexity of the times. What's Donald gonna say? What happens to this tariff? How does it interplay with investment returns? How does it interplay with inflation? Those are complex questions. I don't know. But do you know what's a tougher question than answering to a member or anybody else why the Leafs haven't won a cup for 58 years? Do you know what's a tougher question? I don't.

But do you know what's a tougher question than answering to a member or anybody else why the Leafs haven't won a cup for 58 years? Do you know what's a tougher question? I don't. It's more complicated than all the rest. So here's the deal, I can't promise a Leaf victory, but as it relates to your plan, a promise is a promise, we've got this, it won't be an easy year, but we have your back, we'll do our level best, we will get through this, we're here for the long term, and we're with you all the way. So thank you very much.

For questions, please welcome your Chief Pension Officer, Celine.

Thank you, Blake. Thank you. Good morning, everyone. I'm Celine Chiovitti, I am the Chief Pension Officer at OMERS, and I am so very grateful to be here with all of you this morning. Now, George started off today by letting us know that there are over 2,500 OMERS plan members joining our meeting today. And I know that each and every one of you has your own story to tell, right? Some of you are relatively still early in your career, and your retirement probably seems like a very far away and distant thought. Others are maybe getting a little closer to that magical date, and you're starting to pay a bit more attention to your pension, and others still are amongst the 200,000 plan members who receive a paycheck from us each and every month. But no matter where you are in that journey, we stand, today, united and together, as part of this OMERS community, this phenomenal Canadian institution which has been giving financial security to workers for over 62 years.

And so you've heard already today from Blake, from Jonathan, from George, everyone is acknowledging that these are difficult times, right, it's complicated right now. And my heart really goes out to every Canadian who doesn't have access to this type of a pension plan. Canadians, like my mother, who is recently widowed, and who called me yesterday saying she's really, really terrified to open up her savings and look at that statement, because she, like many other Canadians, have woken up to the realization that they have lost a lot of their personal retirement savings over the past few weeks. And that's the reality that many people live off, they require those savings in order to sustain them in their retirement. And so that's one of the reasons I am so very passionate about this pension plan, and so grateful to be a member of it.

Now, you've heard a lot already this morning about the strength of the OMERS plan, the strong results in 2024, the fact that we've improved our funded status, we've added additional conservatism to the discount rate, making the plan even stronger than ever before. Blake has talked to you about how he is leading his global investment teams through a very diversified strategy that's designed to put dollars on that statement to build the assets, but even more importantly, to protect against the downside. And you've heard all about that this morning. And so what I wanted to do in my time with you today is to ask you to go a little inwards, and think about your own OMERS pension, and what it means to you and your life. And so I'm gonna start by asking you a question, it's a relatively simple question, but probably something that you don't think about often. And so my question to you today is, when was the last time you felt really excited about your future?

Now I'm talking about the type of excitement that keeps you up at night, giddy with anticipation for that next day to come. A moment in your life when it felt like you were about to embark on a brand new chapter, and that anything was possible, the world was your oyster. Can you imagine a time when you felt that energized about your future?

Well, for me, like many of you here today, I've been through many highs and many lows across my life. But my most vivid recollection of feeling this way, like something brand new was about to start, was when I was a senior. A senior in high school, that is. There I am, in all my glory. Now, when I look at that young woman's face and I see beyond the big hair and the red lips of the 90s, that was my Madonna era, I actually see a young woman who was so excited about her future, she was ready for that next chapter. She didn't quite know what she was in store for, but she felt really, really confident about it.

Okay, so I know you're now all thinking, "That's fine, but what on earth does that have to do with me and my OMERS pension?" So, I'm gonna go there. Our job, my job, as your Chief Pension Officer, is to make sure you have enough accurate information and tools to get super excited about your future. That's what we're here to do, right? That's the pension promise. Because if we're all honest, OMERS is in the business of your future. And so we need to give you enough information to get you excited about that future so that you can ignore all of the noise out there, and pay attention to your pension, and the fact that you can write your own chapter. So that is what we are here to do, and that is our goal for you today.

And that's becoming even more important, right? Because we're living so much longer than ever before. So the value of your defined benefit pension is worth more today than it has ever been in the past. And research tells us, research tells us that a baby born today, this is Bob Aziz's gorgeous grandchild, but a baby born today, our future OMERS members have a 50% chance of living to 100 and beyond. That's a lot of living.

Now, because you have access to a pension plan, you know what the gig is, no matter how long you live, no matter how long you spend your chapter in retirement, you have access to secure, stable income for the rest of your life. You don't need to worry about a lot of the financial aspects that other Canadians have to think about simply in order to think about their retirement. In fact, we know that 61% of Canadians fear running out of money in their retirement. So think about that for a moment. We don't often talk about our pension in this way, but have you ever considered, if you didn't have access to this plan, how much would you need to save in order to retire? You're working, you're spending your career, you're doing all of the things.

What if you had to put money away to replicate your OMERS pension, how much money would it take? And so, for the fun of it, let's walk through an example. Now, I'm staring here at our Chief Legal Officer, Michael Kelly, and so I'm gonna put out my legal disclaimer. This next example is being done for illustrative purposes only. It's fictitious. However, we do have some really, really good data points that we can pull from. So, let's add it up. The first thing we need to figure out is how much annual pension will we get every year? We know that's individual, right, it depends on your years of credited service, and your best five years of earnings. But we also know that, in 2024, based on our published annual report, the average pension in pay, if you retired in 2024, was $34,000, so let's use that as our starting point. The next thing we need to figure out is, how long will we live for? And of course, none of us know the answer to that question, we don't have a crystal ball. But let's go big for this illustration and imagine we are going to live a long, healthy life, we're gonna live to 100 like many of our centenarians in this plan, so that's 40 years, $34,000 multiplied by 40 years.

Well, we also know that the value of a dollar today depreciates over time, and your pension has inflationary protection built into it. Sponsors Corporation looks at the plan, the financial health of the plan, every year, and determines what that will look like. But for the purpose of this illustration, let's imagine you earn 2% over that 40-year period. How much money does that add up to? $2 million. $2 million. Now, I don't know about you, but having spent the majority of my career in the public sector, having raised children, and having chipped away at a mortgage for more years than I wish to talk about, the idea of coming up with this type of money would be very, very difficult, and that is the value of your pension plan, that is the magic of being part of a defined benefit pension.

Now, that was all just an illustration, but in pensions, we are really focusing on providing you with the tools and information that you need to be able do those types of calculations on your own. And so today, my phenomenal pensions team, many of whom are in the audience today, have been building out our My OMERS platform, that is your digital platform, somewhere you can go to run those very calculations. You can run pension estimates, you can use our retirement calculator, you can figure out what the value of your pension is, you can determine what it looks like in different dates, you can even forecast what your expenses will look like, and figure out what is the best optimal time for you to take your CPP and your old age security.

We're also trying to find ways to provide you with access to the experts to debunk a lot of myths that are out there, including investing, financial planning, living your best and longest and healthiest lives. Through our "Pension Blueprint" podcast, we were thrilled to be the number one Canadian Defined Benefit Podcast out there in 2024, and we look forward to sharing season three with you in the fall of this year.

Now, we are all about service within pensions, that's what we're here to do. We are here to answer any questions that you might have. And honestly, if you have a question about your OMERS pension, the best people to call is the pensions team, they've got your back, they are the ones that you should trust to answer any questions you have. So ignore the noise and call the experts. In 2024, we answered almost 150,000 calls, we did secure communication and live chats, the team visited you and communities across the province to answer your questions. We were thrilled that you gave us a 96% member service satisfaction rating for the second year in a row. So thank you very much for that, because we are all about service.

In addition to service, we also sparked an important conversation about some taboo topics. Now, I've never been shy to talk to you about my age, I feel like I've earned every line on this face, but one of the things that we're trying to tackle is reframing retirement, and some stigma, quite frankly, around aging and this pointed direction of what you ought to do as you start to get older. Now, as a 52-year-old woman, I have to say that, growing up, I thought about women my age as being, well, old. We were considered golden, I'm not sure if you remember these girls. Right? "The Golden Girls." This is what society fed back to us as being, this age demographic is about 48 to 57. Today, that very same age group is reflected back like this, right? Young, dynamic, independent, powerful, we can be and do anything we want. And the reality is, our age should not define us. Our retirement should be as individual as we are, which is why we launched the "Preparing for Your 100-Year Life" seminar that we conduct across the province, across communities, across the province, to help you individually decide how you want to write that chapter and what you want to do.

And then the second, really difficult conversation that we started to have is about closing the gender pension gap. Now, some of you have already heard me speak about this, across all OECD countries, women tend to retire with less take home pension income than their male counterparts, exists everywhere across all OECD countries. There are many historical and societal reasons for this, but the top three, essentially, are, historically, women have tended to take on more precarious and part-time work that hasn't offered them access to a pension plan, women have taken on roles that pay less than their male counterparts, and women tend to take more time away from the workplace to have and care for children.

Now at OMERS, what this means, when we look at the retired demographic, is that for every $1,500 in annual lifetime take home pension, a woman takes home about $1,000. Now, when we saw this data point, we said, "Nuh-uh, we can and must do better." And so what did we do? Well, many of you here know that we opened up the plan to all non full-time employees back in 2023. And since that time, we've enrolled over 53,000 women into this plan, women who now have the ability to build their pension income foundation. And this year we are working with over 1,000 employers to make it easier and more flexible for women to be able to continue to make contributions to their pension during their leaves. We're making it more affordable, we're making it easier. We're trying to keep their pensions whole.

And then lastly, we will be embarking on a targeted campaign and providing more financial tools to help women have these conversations and ensure that they are building a secure and confident retirement, because we recognize her value.

So before I wrap up and pass the stage over to the Sponsors Corporation Board Chair, Mr. Max Cananzi, I had to pause, and couldn't take up the opportunity then to talk to you about the best part of my job, and Blake Hutcheson has already mentioned it, getting out of our beautiful office building at 100 Adelaide, which you all own, and getting across to communities and meeting so many of you where you live, play, and work. And it's even more fun when I get to do it with Blake. And I have to say, something really magical happens when you get Blake outside of the GTA and onto the other side of the 400 or the 401. The suit jacket comes off, the tie comes off, and you start to get a glimpse of the young boy who grew up in Huntsville, Ontario. And in every community that we go to, there is always a story to share. Usually it's about a lacrosse game, or the Payne Brothers, which I've heard a lot about. But it's a ton of fun.

So I will invite you to sit back and enjoy the next video. And I will just end my comments today the way I started, which is acknowledging the fact that it's complicated right now, the world feels really, really scary, and I know that by coming together as part of this OMERS community, we will get through it. We stand with you.

Thank you, Celine, for that inspiring presentation. It makes me so proud to be associated with OMERS. And thank you, Jonathan and Blake, for all that you do as well. Thank you very much. My name is Max Cananzi, and I have the privilege of serving as the Chair of the Sponsors Corporation, a role that I have held since I succeeded Barry Brown, who completed his term as Board Chair at the end of 2024. I would like to take this opportunity to thank Barry for his leadership on the SC board over the past two years, and for as many contributions during his time on the board. I'm honored for the opportunity to provide this update on behalf of the Sponsors Corporation.

And so far this morning, you've heard from representatives of the OMERS Administration Corporation, or the AC, the corporation responsible for administering your plan and investing its capital. Our CEO, Laurie Hutchinson, from whom you will hear from shortly, and I, represent the Sponsors Corporation, or the SC. And we have different responsibilities, which we often refer to as the ABCs of OMERS, namely the Appointments, Benefits, and Contributions.

In executing our mandate, the SC focuses on four key areas. We conduct periodic reviews of our governing policies so they remain relevant and support good governance over time. We work with sponsors to complete appointments to the AC and SC boards. It's important to have directors with the appropriate experience and skills serving on the OMERS boards who can act independently, and who bring a diverse background and perspective to the table. We also periodically assess the continued appropriateness and fairness of contributions and benefits across our large and diverse membership, including both current and for future generations. And finally, we continually monitor the long-term health of the plan as it matures to ensure its strength and resiliency for generations to come.

All of our decisions are guided by a common goal shared by our colleagues with the AC. Our objective is to provide a sustainable, affordable, and meaningful OMERS plan to you, our members, and to future generations, for many more decades to come. For that reason, we have both a short-term and a long-term focus in the work that we do. OMERS has been delivering pensions for over 62 years, and we dedicate our work to continuing our success into the future.

Now, across our 640,000 members and 1,000 employers, we consider a diverse range of needs and interests, and make plan decisions that are meant to balance design and cost across this range, delivering a plan that offers meaningful benefits at a reasonable cost. The SC board takes all of its decision-making very seriously. It requires a vast amount of information, analysis, deliberation, working with our AC colleagues, and our sponsors and stakeholders. Matters are often complex, interrelated, and take time to work through effectively. Best practices for managing defined benefit plans, like OMERS, over the long term, require a consideration of decades of future potential outcomes and environments, assessing the risk and opportunities that lie ahead, all while balancing our objectives related to the affordability, meaningfulness, and sustainability of the plan.

Increasing your plan's ability to handle risk as a mature plan is how we protect our pension promise to you. As the plan matures, OMERS believes that it is critical to continue to build funding reserves that increase our resilience. Favorable investment returns are an important element of our ability to continue the path we are on, to stay the course, build reserves to provide benefit security for the future and continue to monitor our progress.

And now I'd like to update you on a few important SC board decisions that were made last year. In 2024, and as part of our ongoing work, the SC board updated three policies that guide the SC when making decisions about contributions and benefits. All three policies are long-term in nature, and are intended to support the resiliency of the OMERS plan as they mature, and the fairness across a diverse membership today and over time.

The SC board also completed its most recent contribution rate study last year. Reviews of contribution rates are done approximately every five years to ensure that the allocation of contributions paid by our membership and their employees is fair and reasonable. The SC board concluded that, following the most recent actuarial review of contribution rates, a reallocation of the plans' funding across the four contributions was required. Consistent with the SC board's conclusion, as a result of plan risk assessment in 2023, the total contributions that OMERS collects for members and employees is not changing. The adjustment of the rates, however, will result in some members and employers paying more, and will have others paying less. And I could tell you, that was a very difficult decision for the board, grappled with it knowing that there was impacts, but overall, it was critical to establish and maintain the principle of fairness.

Approximately 70% of the membership will receive a decrease in their contribution rates, but unfortunately, 30% of members are impacted negatively. But to soften that impact as best we can, the board concluded that it would best be served to provide as long a lead time as possible, as long as a notice period. So the change is going to effect on January 1st, 2027, which is a full 30 months of notice to assist in that. And you'll be hearing more about those changes momentarily when Laurie comes up to provide her presentation.

Now, looking ahead, the SC board remains focused on its four key areas to deliver success for your OMERS, now and into the future. This means having appropriate benefit and contributions for 640,000 members and 1,000 employers, building resilience in your plan as it continues to mature so it's strong for generations to come, having effective appointment processes to retain the best board directors, and having appropriate policies and processes that support the SC's decision making in the best interest of the plan.

And you've heard earlier from Blake that our 2030 strategy was jointly approved by the two OMERS boards at the end of last year. And our refresh strategy incorporates the SC's areas of focus, and reflects our goal to continue delivering a sustainable, affordable, and meaningful plan over the long term. And finally, as George mentioned in his opening remarks, the Ontario government is conducting a review of OMERS' governance this year. The last review of our governance by the government was in 2012, and Mr. Poer has been appointed as Governor Special Advisor to lead this review, which includes a consultation process and a final report that's expected to be delivered to the government later this year from Mr. Poer. And of course, like in 2012, and in the spirit of continuous improvement, SC will fully cooperate with the government's review.

And now I'd like to welcome to the stage, Laurie Hutchinson, our CEO, to provide SC's further updates. Thank you.

Good morning, everyone. I'm Laurie Hutchinson, and I'm honored to serve you as the CEO of the Sponsors Corporation, a role I've had for almost three years now. It's great to look out and see such a large turnout in-person at today's meeting, as well as have over 1,000 people online listening to our presentation today as well. Thank you so much for your continued interest in OMERS. As the final speaker, I'll be providing a bit more detail on the comments you just heard from Max.

Over the past hour and a bit, you've heard updates on various aspects of your pension plan and how we are all committed to delivering our pension promise to you. You heard Max speak about plan maturity and funding resilience. The continued financial strength of the plan means that contributions, less expenses, plus investment earnings will pay for all the benefits you and future generations will receive over the long term. Making this formula work is complicated, it requires a lot of important and often complex decision-making. The good news is, as you heard earlier today, OMERS looks after all of this on your behalf so you don't have to.

Recent events have been a good reminder of the value of having a large defined benefit plan like OMERS, that's managed by experienced purpose-driven people who are focused on securing your pension future.

We have a very diverse membership when compared to most other plans. Often the needs, wants and expectations across our membership are not the same for everyone, and their differences can sometimes be substantial. In making planned decisions, the SC board strives for relevant benefits and fair contributions across these different profiles of members and employers, and across multiple sectors. As a jointly-sponsored pension plan, the SC board must balance the needs of both members and employers. And the board must also consider current and future generations of members, including members who haven't yet joined the plan, and different subgroups of those members and employers.

Max highlighted the key decisions the SC board made in 2024. These decisions aligned to two of the key areas of SC's focus, namely the review and update of three policies that support effective governance, and the completion of a periodic contribution rate study as part of assessing the ongoing and continued fairness and appropriateness of the contributions and benefits across our diverse membership.

Three policies relate to contribution rate decisions, and they were reviewed and updated by the SC Board. Collectively, they offer guidance to the board to ensure that plan decisions are made with consideration of both the long-term funding health and resilience of the desired goals of fairness, meaningfulness, and affordability.

And it's a balancing of those two items that enters into every decision made. The funding management statement offers guidance in making plan decisions based on the plan's current and projected financial health. Its focus is primarily on long-term funding. The RCA mechanism policy offers funding guidance for two pension vehicles that we must maintain to satisfy income tax requirements. Its focus is on the continued benefit security of our entire seamless pension promise. And lastly, the contribution rate policy offers guidance on the allocation of the plan's total funding contributions across OMERS four contribution rates. Its focus is on preserving the fairness of contributions across our membership.

While these policies are an important element of the board's decision-making, they are not the only element. The SC board exercises judgment when making its decisions, as there are many other different factors that need to be considered. And the board needs to be able to adapt to the evolving circumstances. Overall, these policy changes were meant to help ensure the decisions about contributions today and in the future are focused on a plan that remains strong, fair, and resilient as it matures, so that we can deliver our pension promise, today, and always.

Now we'll get into a little bit of the details in respect of the contribution rate study. Last year, the SC board completed its most recent periodic review, and approved reallocated contribution rates that will take effect starting in 2027. As you can see on the slide, there have been one rate that will be reduced, while three rates will be increased. The board approved this change to preserve the fairness of the rates charged to our different groups of members for the benefits they're expected to receive.

Overall, as Max indicated, a large proportion of our members, over 70%, will be paying a bit less, while 30% of our members are being asked to pay more. To be clear, this is not a change related to the pension funding of the plan. The total level of contributions that will be received by the plan in future years are unchanged from what the current rates provide. This is strictly a reallocation of who pays how much in the plan.

For the individual member, the size of the increase or decrease in take home pay will depend on how much the member earns and their according tax rates, and which normal retirement age provision they participate in the plan. Based on current data, members earning $97,000 a year or less with a normal retirement age of 65, will see a reduction in the total contributions they pay in the year, versus the current rates. All members in the plan participating in the provision with a normal retirement age of 60, which currently is most uniform police and firefighters, and all members earning more than $97,000, regardless of which normal retirement age provision you participate in, will see an increase in your contributions.

For each employer, the level of increase or decrease in pension cost will depend on the demographics of your employees, and the normal retirement age in which they participate. In the coming months and years leading up to 2027, both members and employers will receive more education, communications, and other support to help with this transition to rates that are being reallocated to preserve the fairness of the contributions we charge to all of our members in the days to come.

As Max mentioned, these adjustments were a result of a periodic contribution rate review, which we do with regularity, and the next review is scheduled for 2029.

This concludes the presentation portion of the meeting, we thank you for your attention. There's been a lot of information provided to you this morning, we hope you found it informative, entertaining, and that you have felt our deep level of commitment and focus on delivering the best OMERS pension plan we can to you, our members. Before we move to questions, I'd like to take this opportunity to join my colleagues in their earlier remarks to say thank you, and thank you deeply for everything you have done, you do, and you will do to serve the people of Ontario. We're fortunate that you have our backs to make our communities the best they can be. It's an honor and a privilege for all of us to contribute to your retirement.

Now I'm pleased to hand the podium back over to George Cooke for the Q&A session. Thank you very much.

Okay, so we're at the Q&A. We're running a little bit behind. I do want to preserve the targeted 45 minutes, so, with the permission of the crowd, we'll now target 11:15 rather than 11 o'clock, 'cause we don't want to take time away from any or all of you.

I'll repeat, if you could, please, you know, those that have questions here, come forward to the mics. Try to limit it, please, to one question, and then let somebody else get a chance. We'll try to get everybody in and taken care of. I'm gonna alternate between four mics. I also have questions that have come in over the last couple of hours from those that are on the line, and so we'll mix those in as well. And I'm looking this way, I'm gonna look through my left, start with Mr. Baxter.

Thanks, George. Mark Baxter from the Police Association of Ontario. On June the 25th, we received an update from the SC Board that provided a bunch of updates that the board had made. One of them had to do with the contribution rate increases, which was just discussed. And I think our view on that is well-established, if our members who that contribution rate will most likely affect, our members, if they were not paying their fair share of contributions, they should be paying that. And conversely, members who were overpaying, you know, that adjustment should be made so that they're paying a fair share. Our concern at the time is more around how that rolled out and the communication strategy, or lack thereof, that happened. In the same email that went out to members, the email from Laurie talked about updated policies, and that the funding management statement had been updated, the RCA and the contribution rate policy, which was just, again, highlighted. And when you click on the link to get a summary of that information, it takes you to another page, to a landing page on the OMERS website where it talks about the funding management statement being non-binding, and it says that it's been amended to increase the focus on building reserves as the plan matures, and provide greater flexibility for the SC Board to decide upon the composition of plan changes and so on. And then when you look at the annual report, it indicates that a change has been made as to when contribution rates will come down. And you really don't know that unless you knew the history and you knew what the old funding management strategy said. In the annual report, it says that the long-term sustainability funding target is now set at 110%. Previously, that was at 105%. So some communication went out in June indicating a change had been made to the funding management strategy, but really never told anybody what it was. When you go to the OMERS website, it didn't say that it was moved from 105 to 110%, and unless you had the knowledge, or you had the past document, you'd never know that our contribution rates, the target for when they're gonna start to come down has now been increased from 105 to 110%. And while I understand that this is non-binding, clearly the board has spent a lot of time considering this, because it's a very specific number, it's not a range. And it's been changed, and it's been changed, and in my view, not properly communicated to the membership, to the members whose contribution rates are affected by this. And so my question is, why has this change been made and not effectively communicated, and really just sort of buried in a couple of reports, and never really explicitly told to plan members that, "Oh yeah, we're not even gonna consider your contribution rates coming down until 110%, and we've changed that from 105%." So, just wondering if someone from the SC can maybe explain the communication strategy. Which, to be honest, seems pretty sneaky.

Well, thank you. Thank you for that question, Mark. Yeah, so I think one of the important things to realize is that, you know, the plan is maturing, the focus on plan maturity has been more pronounced over the last number of years, in our thinking, and the board's thinking on this has evolved over time as we continue to analyze the pension plan. And you're quite right, the past policy had a target of 105, and given plan maturity and the need to build resiliency within the plan, the board has decided to move to 110. I think we were very careful to state that that is a guideline, that is a document guides the board in its decisions and its future decisions with regards to any contribution reductions that may come as a result of having a fully-funded status. And fully-funded status, for us, is not sufficient, in the sense that we're not looking for 100%, I think we were very clear to signal that in the past, and even today, that we need the funded status to be well above 100%. Do we wait till 110% before we make any changes to the contribution rates? Again, that is a document that provides guidance, it is not a binding, it is not a sort of a cast in stone, it's something that is gonna require a lot of judgment, a lot of discussion, and a lot of analysis from the board. And we'll be able to communicate changes as a result of that. Also, I may add, is that we have a stakeholders and sponsors meeting coming up on April 29th. And the subject matter of that meeting is to talk about the policy changes, the FMS, and that will be fully discussed and fully detailed at that meeting on April 29th. And I encourage everybody to attend to that session.

Thanks. Thanks, Max. I'm just really trying to understand why it was never communicated that we've moved from 105 to 110.

Laurie may have something to add to that. Just to add, there is some detail in the FMS that is related to the calculation. In essence, the previous FMS and the current FMS are similar in that they define three funding zones and provide guidance to our board in respect of what those three funding zones mean for the long term. The calculation of the zones was also modified as part of the research, or sorry, as part of the review that the board undertook. And in so doing, some of the assumptions underlying the calculation of the 105% have been modified, such that the new assumptions at 110% equate to roughly the same thing. So that's why the 105 is different, there are other assumptions inside the document that offset and now translate into something that is a link to the AC's discount rate strategy. And previously there was a longer-term discount rate goal that was lower than the current range, and so we updated our assumptions in line with the work that our colleagues at AC had done, and it's a combination of the two factors that make it essentially the same funding objective.

Could you move to the gentleman on my right, please, sir?

Yes, hello, David, I've been with my OMERS employer for almost 37 years now. My question is for the SC board, it's regarding conditional indexing. As of January 1st, 2023, the indexing became conditional. Hypothetically, someone that retired December 31st of 2023, they had one year of conditional indexing, what would the conditional indexing be for that one year?

Okay, my mic's, yes, okay. Thank you for your question. Congratulations on your 37 years, you've got a great pension ahead of you. In terms of the impact for that one year, there's three things about the conditional indexing decision that came into effect in 2023. The first, which is very important for all pensioners, is that your pension can never be reduced. Ever. Okay? That's a guarantee. The second thing is, for anyone who retired before 2023, your entire pension also will receive guaranteed inflation protection every year for the rest of your life. For people who retired after 2022, service benefits earned after '22 before you retire are subject to the conditional indexing referred to in the question. What that means is that it continues to be full inflation protection, until the time when the board ever decides to make it less than full inflation protection. It was introduced as an additional tool as the plan matures to be available to the board, should it decide to use it, if the adverse experience of the plan is such that the plan finds itself in financial difficulty and some tough decisions have to be made in terms of raising contributions or reducing benefits. What this means now is there's a third tool in the decision-making which is lowering or lessening the amount of inflation protection on the benefits earned after 2022. So for your example, where there is one year out of 36 where it is subject to that inflation protection, that means once you retire, 35 years will receive annual guaranteed full inflation protection, that other year will also receive full inflation protection, with the caveat that, should the board ever need to make decisions because of the financial health of the plan, it may receive less inflation protection.

Yes, I understand that. But my question is, for that year, what was the rate that was applied?

Oh, full inflation protection. Yes. Yes. It remains at full inflation protection, unless the SC board needs to reduce it.

Okay, thank you.

So the default is full. Sorry about that.

Sorry. Over here on my left please.

Thank you, Mr. Cooke. Good morning, CEO Hutcheson and team, I'd like to start off by thanking you for what I consider to be an excellent presentation. Very impressive and wholesome. My name's Darcy Keane, I'm a business owner and a local town counselor in the municipality of Halton Hills. And take this opportunity to, if you guys haven't had a chance to visit our beautiful community yet, please do make the time sometime, we'd be happy to host you, show you around. It's just north of the 401, a little bit to the west of the GTA.

My question centers around the matter of governance and equity investment decisions, and I was struck. In the news recently, and unfortunately, there appears to be a $325 million write down concerning the bankruptcy of the Northvolt battery plan in Sweden. I understand that OMERS is taking the hit on that one, and I was wondering if perhaps we could get a little more of an update on what happened there, and what steps are being taken in the future to avoid this. Thank you.

Thank you. And if we can talk more in your council chambers in Halton one day, we'd be happy to come, thank you. You know what? It's 100% true. We invested in Northvolt, an electric battery operator, along with, by the way, 20 of the biggest investors in the world, Goldman Sachs led it, they were the biggest investor, many other Canadian pension plans. And the fact is their two biggest customers, because they're not selling enough electric vehicles, have, you know, ceased, you know, advancing with the plans. So we got hit hard. I'll remind you, 850 real estate assets, 6,500 area securities, 30 big infrastructure assets, 25 big private equity assets, we do, when you have an enterprise that big, we will get some of these. I'm not saying we're happy about it, it was one that hit us hard. Fortunately, we had many others that succeeded extraordinarily well, it was a fraction of our portfolio, but it was a situation with some of the best investors of the world, altogether, most of the Canadian pension plans also, (chuckles) and for the time being, at least, I can't say too much more 'cause it's in the courts, for the time being at least, we've taken it write down. And thank you for calling it out. Sometimes we get those. The vast, vast, vast majority of times, we don't. And we're gonna continue to monitor it, but that's the situation.

I appreciate that and just, you know, my concern is that perhaps we're being guided a little bit by an activist agenda, as opposed to a fiduciary response as a conservative institutional investor, so.

So it's a very fair question. And we really try not to make that, I wouldn't say we did, we thought we underwrote it with incredible diligence. So it wasn't an activist agenda, but the point's well-taken, and it's a very fair point.

Well, thanks very much. Appreciate it. We look forward to seeing you someday. Take care.

Along the climate theme, Blake, we've got a question online. "Can OMERS be more of a leader in sustainable design and high-performing buildings among its assets?"

So that pertains to Oxford. Quite honestly, in 2010, I ran Oxford for nine years, in 2010, we put a line in the sand, and we said to the world, we are either gonna be a leader, or the leader, for built form assets, not only in Canada but around the world. It makes sense to be executing against sustainable projects, 'cause our customers want it, we know you want it, it's important to the members, it's important to our employees, it's important to the planet. Oh by the way, when those things add up, we've actually made, you know, significantly better returns by being very sustainably oriented. So I would say today, Oxford is among, you know, two or three of the most sustainable developers in the world, have won literally hundreds of awards in that regard. And I'll give you one example, we just finished The Stack, which is about a 700,000 square foot building in the city center of Vancouver. It's the first carbon net zero building in North America. Again, has won tens of awards, it's leased up better, higher net effective rents than our original underwriting, it's gonna be a fabulous success. So I think whoever asked the question, just know, Oxford is either a leader or the leader in this space. Can we get better? For sure. Is it something that's important to us? For sure. Because it pays you better than any other alternative, as much as any other reason. So, hopefully that answers that question.

Over here to the gentleman to the right.

Great, thank you. Real estate has been mentioned a number of times this morning, as well as reference to rents increasing and that being good for us. Respectfully, I think the housing crisis in this province is not good for us. The inability of our children, friends, families, colleagues and communities to find affordable housing is having a devastating effect in Ontario. An electoral backlash to the status quo can result in massive layoffs in the public sector, and we've seen in the U.S. in the past few months what this can mean. The housing crisis and ongoing financialization of residential real estate will only raise the risk of this sort of event here. You've told us today that you have an award-winning organization and globally respected team. With that talent, can you provide us with a comfortable retirement without continuing to contribute to this housing crisis? And how do you evaluate the risks your investments pose to the members of OMERS? As you said, it's our money, how can you ensure that you're not using it against us?

What's the last question? How can we be sure?

The investments you make are not negatively affecting your membership.

Right. So, on the housing commentary, in and of itself, they're all very thoughtful comments. It's 100% true, it's a crisis. And the role that we, OMERS Oxford, play in respect to that crisis is we can't solve, with your money, society's problems, but we can use some of the tools that are available to us from the federal government, from CMHC and otherwise, to actually develop some projects that do meet our fiduciary obligations, that are high yielding for you, that do stand the test of time, in terms of investible assets. We've just announced two projects adjacent to the Scarborough Town Center where we had some land that's on our books at a very fair number. We've been able to engage CMHC, we're building two substantial buildings, much of which can be used for rent geared income and other low-income housing options. And so it helps society, it helps Ontario, but we're not compromising our returns. We're able to do it by using the tools that are available at this time and place, and that is the way that we can ensure, this isn't a pet project, it's a project that will pay pensions and stand up against everything else we're looking at.

Do we need to be involved in residential real estate? Do we have to continue to increase the cost of housing, or can we look at other markets?

So we are in residence, we are not in the condo business, we're not in the single-family home business, we're not in the business to buy and sell real estate. We do have a fairly substantial rental portfolio. Why? Because it matches your long-dated liabilities. We've been in the business for 40 years, we're extraordinarily good at it. So that is the narrow piece of the housing component that we do on your behalf profitably and well.

And so we have to do this?

Do we have to raise rents on our tenants-

Well, is the question, do we have to raise rents?

No, I'm just asking, do we have to be in this market?

Do we have to be in that space?

Can we achieve the retirement goals that we all have without continuing to use real estate, people's homes, as an investment, rather than a human right?

I think we can debate it offline whether that's a good or bad component for society. For your plan, it's been a great producer for you for many years, and we actually think we're helping, not hurting, society in that endeavor. But the first and foremost check is does it meet the fiduciary obligations? It does. It's long-dated. And it's served this plan very well for probably 50 years.

I'm just gonna interject, and call an end. Thanks, there's a lot of people that wanna get their questions answered. And I'd ask people, if you can, try to make the question short and focused, and then one question, we'll try to answer it fully. If you don't think so, go back of line, 'cause there's a lot of people who want to get in. So I'm coming over here to this gentleman.

So, my name is David Kidd, I'm an ex-City of Toronto employee, like Celine. I'm up here today to ask some questions about our future, like Celine offered to us. Now I'm with a group of retirees that, we have a double concern. We have a concern for our children, for ourselves, for our grandchildren, for the state of our planet. It is not looking healthy, in terms of the floods, the heat sources, the fires. And again, OMERS also contributes to this by the investment in our future. And for us, in terms of the long-term health of our investments, we're not convinced that fossil fuels is gonna be as successful, it's not just that it's having a negative impact on our planet, but also, we don't believe, unlike the President of United States, that short-term investments in fossil fuels profits is gonna help in the long term. That's gonna be an ending of a profit ratio soon, as the greenhouse gas that it produces will make things so dangerous on our planet that we will have to move on. So, this is a personal question for Blake, and I appreciate all of your contributions today, it was a very thoughtful exercise today, but Blake, last year, at the annual general meeting, you made a comment that OMERS has invested in some of the best, most sustainable, most thoughtful Canadian-based oil and gas companies. And you said that these companies have a sustainability plan that's well articulated and well regarded by the investment community. We just wanna know where, I mean, if you could explain that a little bit fuller. A lot of these companies have refused to have any kind of climate examination. They've asked for exemptions from all sorts of other panels. And this is both a question about the health of our planet, but also about the health of our investment. And that is what my question is based on. Thank you very much.

So, I'll be quick, 'cause I know there's a long lineup. We, OMERS, do have some equities that are in the oil and gas business. They are the most blue chip, the most well-articulated enterprises with climate strategies to decarbon their future focus. We have a very specific sieve, we are very thoughtful, it's put through multiple layers before we take those decisions. Some people feel we should never invest in oil and gas, period, irrespective of the need, and irrespective of the revenue potential, irrespective of the fact that it's a considerable piece of the Canadian dollar and the success of the country. We have not drawn a line to say we won't do it. It's always a debate between, you know, how much the fossil fuels may affect society and how much of an offset is being considered. We think the ones, and very few of them that we've invested in, will serve you extraordinarily well, they have this year by the way, from a return perspective. So no, we're not gonna put a line in the sand saying we're never gonna do it, but I can assure you we're being very thoughtful, we have a specific sieve, and we are taking the highest quality ones with the best long-term climate positions.

So the only follow-up is-

Sir, excuse me, please.

Please, sir-

At one point we invested in the-

Sir, excuse me, please.

Please, sir-

I have a letter, I'm gonna deliver to you from a number of us who signed it.

Sure. Thank you. Thank you.

Please, let us have it.

Gentleman to my right, please.

Yes. Thank you for accepting the part-time workers, I'm one of those, my name's Ron Faye. My question would be, with cities outsourcing things like garbage and this and that, and it goes to Waste Management, or GFL, or whatever, do those persons who continue to collect the garbage maintain their membership in OMERS? 'Cause we want a bunch of workers keeping the pension plan alive. Is there a way to do all that, and has it been done?

Thank you for the question. The honest answer is, not necessarily, no. In order to be a member of the OMERS plan, you have to work for an OMERS employer, and there's a clear definition of what that is. So it depends on where you go and what sort of the service agreement is with that other organization. But unless you are part of, you know, an employer that is a named OMERS employer, you would not necessarily have the opportunity to continue to contribute to the plan. You could keep the pension with us and defer it, but my team is here, so we're happy to get more detailed information. But the short answer is it depends on the organization that is providing that service, and whether they're considered an associated employer or not.

I just think it should be. 'Cause they're doing the work, it's just a different company.

Thank you.

Over here, please.

Yes, my question is, the OMERS plan is profiting millions of dollars. Now, who decides, and how is it deciding, that we only got, the retired people, like myself and a lot of other retired people in the OMERS, every January we get the increase. So why was the increase so very low at 2.6%, whereas inflation is 3% and higher. It was a very low increase this year, why is that?

So why don't I start the question, and then happy for the SC. So, essentially, the indexation is prescribed. We have a formula that's prescribed that we follow, and so what we look at is sort of the year over year increase, but at a point in time, so October to October, we would take CPI and look at the increases, and that's how we make a calculation. So you're correct, this past January it was 2.61%. You know, prior to that I think it was over 4% at one point, we hit the 6% maximum. So we just run that formula, which is prescribed and set in the plan documents.

You wanna add or you okay?

Okay.

Over to my right, please.

Hi, I'm a parks worker, I've been an FDE OMERS paying member for nine years, 23 years to go. (laughs) On their website, OMERS is listed as a member of the Canadian Council for Public Private Partnerships, whose mission is to promote P3s and infrastructures and services. But P3s are known to threaten public sector jobs, working conditions, and defined benefit plan plans, like OMERS themselves. We've seen this risk firsthand when OMERS-owned DynaLife tried to move Alberta healthcare workers from a DB plan to an RRSP. Last year, Blake said that OMERS does not support privatization, so why is it that OMERS is backing an organization that does? The question needs to be asked, is public workers' retirement money being used to attack the public sector?

Thank you. I'm gonna answer your question very clearly. The reason why we are involved in that organization is we think it's actually better for us to have an insight as to what's going on than to be kept on the outside. So, visibility is important to us, and that is not withstanding as Blake's commitment that he made last year.

Yes, my name is Lee Ramsey, and I'm an OMERS retiree. I'm very interested in climate issues, and I have a question for Blake. I was very disappointed to hear you say that we don't have a hard line in the sand on oil and gas investments. You were talking about having a very fine sieve, I'd like to ask you to explain exactly what that sieve is, because it seems to me that when a business is carbon, it's very hard to get a sustainable climate plan out of that.

Michael Kelly's our Chief Sustainability Officer, and he sits in that investment committee with us, so maybe he's best to address it.

Check. This on? Thanks. Good morning, everyone. My name's Michael Kelly, I'm the Chief Legal and Sustainability Officer. Nice to see everybody out this morning. I take your question and your passion on the issue, I share it, my colleagues will attest to that as well. These are tough issues, the energy transition, you know, we're on a pathway here, and we're always trying to figure out how to navigate that pathway, the pace of the energy transition, we've heard a question earlier, the first question was, are we taking too much of an activist agenda? So there's that point of view, and then there's another point of view of, are we not going fast enough? So we're trying to find the Goldilocks space here. The energy transition trilemma, it's often called, they call it a three-legged stool, on one leg is security of supply, on another leg is affordability, and on the third leg is making our energy green. The issue that we face, if you focus just on one leg of the stool, the stool is gonna fall over. So if we focus everything on green, we might have issues around return. If the people only care about affordability, we're not gonna clean our energy and our energy grid, and we need to have the lights turned on. So that's the way we look at it. We have our climate action plan, we've made a 58% reduction in our emissions since 2019 against a goal of 50% by 2030, so we're ahead of our goal. It can go up or down, but we're on a good path. We also want our top 20 emitters, by 2030, to have credible transition plans. So that sparks engagement for us, we engage with our high emitters to think about, ask them questions, tough questions, about how they're reducing or decarbonizing their business. So it's aligned with our plan, ultimately. You're right on the fossil fuels, it's a tricky question, what's going on in the United States too. They had the Inflation Protection Act, that's, you know, possibly in jeopardy. People still need to buy gas, people still need to buy oil. As Blake said, we do, when we put these companies through the sieve, do they have reasonable plans, do they look at things like carbon capture and storage? How are they looking at it? So, you know, it's not perfect, but people are still using these products, and so that's the dilemma that we have. But we feel like we're on the right pathway. We don't wanna over push it, because we'll get out ahead of everything and that's gonna put our returns at risk. We certainly don't want to be behind it. And we wanna frankly advocate for better disclosure from these these companies. We can't make these decisions if we're not getting good disclosure. So we're out there saying we need more, you know, there's new accounting rules coming in about disclosure, that's gonna help us look harder at these plans and make these decisions. So, it's a tricky issue, but, honestly, we feel we're on a good pathway trying to figure out the right pace of the transition so we don't put your pensions at risk, but that we're also part of this ecosystem that's trying to clean our energy grids for our future. So I hope that helps.

Hi there, Fred from CUPE. We have 180,000 members in the plan, and we're enormously proud of it, and fiercely want to defend it. And so I want to just ask a question of both the AC and the SC about the government review. It's been very peripherally mentioned, but it's kind of a big deal that our governance and the entire plan is being reviewed by the conservative government with recommendations to go to a minister of government. And so what we understand is that both the SC and the AC are gonna be able to participate in that review. What I appreciate from most of the presentations you've all made this morning is a recognition that the plan is actually the plan members, and the plan sponsors, and the plan stakeholders. So how are you gonna be reflecting what the plan sponsors and stakeholders want to say in this review, or are you just not gonna participate and allow those who are actually making up the plan to decide what should be the future of the plan? It would be really helpful to understand what role the plan is gonna play in reviewing the plan.

Fred, I'm gonna go first, and I'll let Max make his comments if he chooses to. I deliberately mentioned, in my opening remarks, that there was information that had been provided to us by the government's review team. It's posted on our website. There is a Q&A piece there that, I think, helped to inform members, or those that choose to look at it, as to what the government's all about. It's very early in the review. Yes, the review was announced some months ago, that having been said, it was suspended, effectively, all government pens down during an election campaign. There's now a new minister taking the helm. And so I'm not suggesting, in any way, that the review is behind, but our interaction with the review team has not happened as rapidly as we originally thought in the pre-Christmas period.

The position that the AC is taking with respect to the review, is to, one, not get in front of it. We're actually waiting to understand what form of interaction the review team might ask from us, and we'll respond appropriately once that's clearer. We have done two things. We have met with the review team to help them understand what the AC is all about. My understanding is that they either have, or will meet, with the Sponsors Corp in a similar vein. This is not to discuss the issues, it's not to discuss remedies to the issues, if the issues are there, this is simply, this is who we are, this is what we do, this is how we do it. So that's taken place.

The second thing that we've done at the AC side is, the governance committee of our board is the working group at the board level that is trying to prepare in anticipation of what might come our way. And we've adopted an approach that basically says, let's try to understand what the concerns are that have been raised by a number of sponsors and stakeholders that otherwise were the genesis for this review, let's make sure we have a clear understanding of what they are. And then the second step was to develop a list of principles that, we believe, are relevant to anyone considering what, if anything, to do with respect to these particular issues that have been raised, or matters that have been raised. So those two steps have been done. What we haven't done yet is engaged in, what may become a third step, may not, depending on how this review goes and where it goes, and that would relate to what comments, if any, we might make with respect to the issues governed by those principles. So we're in a position where we think we've done what's wise to be ready, but we're also in a position where we have no intention of leading on this particular review. So my comment to you is, we're ready. We're also very respectful of the fact, and I, for one, as the Independent Board Chair, my entire audience, Fred, is 640,000 plan members. Full stop. Period. No disrespect to the sponsors or others, you guys are amusing, but my focus, (laughs) my focus is to those plan members. That having been said, I fully understand we're a jointly-sponsored plan, and the sponsor's roles are critical. My understanding is that the review team will reach out to you. And if you look at the material on our website, you'd certainly draw that conclusion. Whether they have or not, I don't know. I fully expect they will reach out to us at some point, and our response will be conditioned by what I've said.

Max, I don't know, would you like to add for the SC?

Thanks very much, George. You know, much along the lines of what George has stated, you know, we've got sort of a similar approach. We are, however, meeting with them, with the government reviewer this afternoon, in fact, after this meeting, to gain a better understanding of, first of all, provide a fuller understanding of what the SC does, and to get a better understanding as to how the consultation process is to unfold. As George indicated, it's still very early days, we just recently received the invitation to consult. And, you know, we will be reaching out in some way and form in the future to sponsors and stakeholders in some fashion yet to be determined. But it's still very early for us, Fred.

But my question...

Fred is basically asking how we, as either the AC, or the SC, are gonna involve sponsors such as CUPE in our response. I think the simple answer is, from my perspective, no decision has been taken at the AC at this point. And I don't see how we could, how it could be reasonably expected, we don't know what we're responding to yet.

The only thing I would say to you, Fred, is my understanding, just having been at those preliminary meetings, is that the reviewer intends to do broad consultations. We've given them all the lists that they can in order to sort of consult with every sponsor, every stakeholder, give every member an opportunity to weigh in. And I would just remind sponsors in the room that you actually have representation on both the AC and the SC, that I'm sure will put your views forward.

Over here, please.

Hi, my name is Chris, I'm a Pension and Benefits Specialist with the City of Waterloo. I do wanna say thank you for the presentations today, and a special thank you to all the OMERS staff who answer my calls when I call in, they have a miraculous way of turning my bad days into pretty good days, or at least not that bad days. So, thank you. I do have a question with regards to both the review of contributions that was mentioned and addressing the gender pension gap. I think it's great that we've included NFTs in contributions, and the ability to enroll. My question is if it's been considered or would be considered in the future to offer a pregnancy and parental waiver of benefits, similar to say the long-term disability benefit that's currently offered?

Yes, so, let me, maybe I'll pass it, I just wanted to say, during pregnancy and parental leave, what we're focusing on right now is allowing members to continue the contributions with each and every one of their, for example, top-up checks. So making it whole. Broader plan design changes when it comes to moving from that to a waiver, I will pass to my SC colleagues.

Great, thank you. You may or may not know that there is a process whereby ideas such as that can make their way to the SC for their consideration, and right now the process is open to submit ideas such as that. The window closes for our current round of consideration on September 30th. But there are forms available on the website. And again, there's support if you need help in looking at that, if you want to make a formal request to the SC in that regard.

We are actually past time, and with your permission, I'm going to take the questions that are currently in front of the mics. If others have questions, we'll stay around to answer them for you, but out of respect for the whole crowd, we do have to end this at some point, and we have gone past time. So let's go as quickly as we can, we'll go this way first.

Thank you. My name's Marima, I'm a public health worker, and my question is in regards to the deficit compared to the other pension plans. Like you said, the new annual report shows 98% funding level, but OMERS has effectively been in a deficit for two decades at this point. And we know that it's not the fault with contributions being too low or benefits being too high, because our contribution rates are comparable to other plans, so the benefits are not superior. Other plans have been back in surpluses for a long time, HOOP, NS Healthcare, CAAT. So, myself, and all the other members we see these numbers, and we're asking why, why not us? So I guess the question here is that, if it is in the contributions or the benefit levels, why does OMERS remain the only major pension fund still in a deficit?

That is a superb question, and the answer is a very long historical reason. So, the roots of that go back now almost 25 years. There was a period in OMERS history where there was a holiday taken to contributions, and then there was a period where it was quite difficult for investment returns. But if you go back-

134%.

We were 134% at one point in our history. What I can comment on is the progress that we've made very recently. I put up a chart that showed, in 11 of the past 12 years, funding has improved. If I look back over 10 years, there's been a 17% improvement in funding because of investment returns, there's been a 6% improvement in funding because of contributions. Inflation has cost us some money, and we've been making the plan more conservative. So, it's a superb question. The answers to that question are almost 25 years old now. And that is why we are so determined in our strategy, and that is why the number one objective in the 1, 2, 3, 4, 5 strategy that Blake talked about is to have more than 100% funding for the OMERS pension plan over the period between now and 2030. It's not lost on us on how important that objective is.

Go this way, please.

Good morning, my name is Bev, and I've been retired since 2013. So because of OMERS I can take my holidays, because of OMERS, I'm living a good life. So today's a great day for me. Great means "Get Really Excited About Today." So, OMERS, you are doing a great, great job. My question is, based on your global vision, are you planning on shifting the amount that you invest in certain countries?

Very good question. Today, we're about 20% Canada. We're a little over 50% United States. We're 15 to 18% Europe, and 5 to 7% Asia Pacific. Jonathan's team and our strategy team constantly do asset allocation models to look not only at what asset classes should track capital, but where we should be investing, from a geographic footprint standpoint. So it's a constant question, and the answer is, we often change it fairly quickly. Long-dated, those are the numbers, but particularly in recent times, we've been thinking about some shifts. They'll be subtle, because a lot of our big assets we can't change on a dime, it takes sometimes several years to buy or sell significant assets. But yes, we're always looking at it, always at the margins, sometimes a little greater than that, and that process is undergoing right now, given all the geopolitical dynamics that you're reading about every day in the paper.

Okay. Just moving quickly. Sir?

Greg, municipal worker with CUPE. One of the reasons I left the private sector 30 years ago was the attractiveness of a defined pension benefit plan. My father continues to reap the benefits of such, as a retired federal civil servant 37 years ago in '92. He still continues to enjoy that benefit. My question revolves around defined benefit pension plan. OMERS was a co-owner of DynaLife, a company that won a contract with the Alberta government to privatize laboratory services in 2022. DynaLife then tried to have the Labor Board allow them to forcibly open their collective agreements to remove the workers from the Local Authorities Pension Plan, which is the equivalent of the OMERS pension plan in Alberta, and place them in a less secure, cheaper RRSP plan. Thankfully, we beat back at the Labor Board, and this offensive DynaLife request was denied. DynaLife was also under public pressure due to extremely long wait times. Later that year, DynaLife faced financial troubles, and the Alberta government was forced to admit defeat and bring the service back in-house. These lab services were again delivered on a public, non-profit basis, and the workers continue to be LAPP members. But recently, CBC reported, a new and troubling aspect to the story. The CBC reporting says that DynaLife's plan was largely premised on the savings of moving members out of the defined benefit plan, and into a cheaper RRSP, and that when it didn't pan out, they asked the Alberta government for a bailout, which the government denied.

Can I just, sorry, can you get to the question?

Was OMERS aware that the business case for a major investment of the plan was seemingly financially premised on a move away from a defined benefit plan. If so, how is it appropriate for the defined benefit plan to attack the defined benefit model elsewhere? If not, is that not also a problem? Shouldn't OMERS have process to ensure that its investor companies are not attacking DB models? How can we be sure that OMERS investments do not undermine defined benefits, if you can.

Thank you. So I'm gonna take that question. Thank you, George. So I will first of all, can't comment to all of the commentary that you made, I say that with deep respect. We are fully committed and are very clear on the fact that we are a defined benefit plan, and very passionate about the fact that we are a defined benefit plan. And I say that having been a member of this plan since my early 20s when I worked in the municipal sector. So, I would start kind of from that place. What I would say to you is, first of all, we can't always believe the facts that are out there. Secondly, I would say, as a fiduciary, we always ensure that we're making the best investment decisions in order to pay pensions, and we just heard from a lovely pensioner here, that's what we're here to do, make sure people have access to pensions every single month. But also to consider the types of considerations that you've put out there. When we purchase an investment company, we deeply respect the ability for the parties to negotiate on their own. We are no longer invested in DynaLife, but I can assure you that when we do look at investments, we do look at the social and governance considerations of that as well, as we are making decisions moving forward.

And nor do we underwrite something with a precondition that we think it's gonna be financed by changing a plan. So, full stop. That's the answer. Haven't before, won't in the future. Thank you.

Go this way, please.

Thank you. Martha Hradoway, President-Elect of the Ontario Secondary School Teachers Federation. My pleasure to be here today. I wanna follow up to the first question that was asked by Mr. Baxter with respect to how communication on policy changes is going to be communicated to stakeholders in a more transparent way. I heard why the changes were made to one of the policies that are going to guide the board, so I'll ask my question in a more direct manner, is, what can, or is, OMERS going to do to improve communication on policy changes to plan sponsors or stakeholders?

Yeah, thank you. Thank you for that question. So we've heard loud and clear that we need to improve on transparency and communication. We make a conscientious decision at every end of board cycle to review the material, the decisions that we've undertaken, and the timing of the release of that information to all members. And that is publicly broadcast on our website, as well as through CEO messaging. So, with regards to the specifics on the policy of the funding management statement, you know, I think that the disclosure through that policy was through the annual report process, and we'll endeavor to do better I guess. You know, I think we'll have to take a look at what our processes are and how we enhance them. So, thank you very much for that question.

Last, but not least. (laughs)

Hello, everyone. Thank you. I'm honored to take the last question. My name is Eric Mertles, I'm with the City of Hamilton, OMERS member for about 25 years now, and also member of the best five group. Just have a question, and I know it didn't occupy a lot of the topic's agenda today. First of all, thank you very much for the great presentation. The one question is about the segment on ABCs. With the market volatility, I understand the ABCs last year yielded about 8.3% on the return. In the last weeks, as you've seen, the markets have tumbled and whatnot, people wanting to secure their private investments or an SX for the future. What would you say to the membership as a whole on the ABC's options to be able to move or secure some of those investments from this market volatility? Would you offer that recommendation? What's your take on that? Thank you.

So I'm not sure that I understand fully the question. I will talk a little bit about the ABC program. And so the ABC program, the way, again, you get access to the exact investment portfolio, that diversified investment portfolio that we use to invest the primary plan, and so really, you know, the magic in that is you're not just investing in the public markets, but also the private markets. And so when you're looking for a long-term, stable environment, then the ABC program is really great for that. And you only get access to it when you are an OMERS member, so, again, that's something that you have access to as being part of that community. It's not for everybody, and so, if you need your money to be liquid, you need to have access to it quickly, then that's not the right program for you. If you are looking to put away sort of long-term savings to help supplement your pension, then it's a great program, and you get access, to your point, 8.3%, like you get access to the full return, which has the protection on the downside. And so we're happy to take questions more at the back of the room at the end of this, but that's sort of how we think of the ABC program.

I'll offer a comment to you personally. I met a plan member in the hallway earlier in the session, and he asked me essentially that same question. The answer I gave him was that, I am not an OMERS member, so I can't access the ABCs. The answer I gave him was, I wished, at this moment in time, that I could have the diversification benefit in my personal finances that all of you, as plan members, have the opportunity to access, so whether that helps you or hurts you, I'm not sure, but I'm very envious of the opportunity that you and your other plan members have.

There was a question, a number of questions came in online, a number of those were, were very personal, personal circumstance type questions. Our people will reach out to you to try to get you those answers. There was also an issue question raised with respect to, would the proceedings today be posted on the website? The answer is yes, they're being recorded. They will be posted, my hope is later today, but probably, I'll say, very soon. So this entire session will be available for all plan members to access.

Sir, I'm sorry, you were not in line at the time. I can't see you, but if it's really quick, I'll take it.

It's not a question. Just a quick comment. For the benefit of the gentleman who spoke earlier who gave you the letter, two quick comments. First of all, you mentioned GFL, the Chief Executive Officer of GFL was the highest paid CEO in Canada in 2024 calendar year, $69 million total compensation, 69 million. Number two, the 47th American President, yesterday launched live on Fox News, signed four executive orders for the complete renewal of what he refers to as the clean coal industry in the United States of America. Four executive orders. And he signed a record number of executive orders, by the way, of any American president. So they're going full tilt to renew what he refers to as the clean coal sector, and they're pursuing a very aggressive export policy as well. So for the people who spoke earlier today, if they're concerned about fossil fuel and its deleterious impact upon environment, it's coming right at you. It's only the beginning. It's only going to get worse.

So I think we have a very acute awareness of those particular matters, we're not investing in coal assets, as you would be aware if you looked at the annual report. And I can say on behalf of the board, because we actually approve the climate action plan, and we measure against it and monitor it on a regular basis, and then reaffirm annually, that we're actually very satisfied with the progress that we're making. We're well ahead of plan. If anything, one of the most material outcomes of the approach we've taken is that a recognition of climate risk is now embedded, seriously embedded, in the way we consider and think about investments. And, quite frankly, the choices we've made are accruing to the benefit of all plan members, and frankly, the society. So, Mr. Trump can issue as many executive orders as he'd like, it's not going to have any impact on us.

With that remark, which I probably shouldn't have made, but in any event, I will simply look out and invite all of you to join us a year from now. We do not yet have a specific date, but it'll be in early April, you'll be informed. We look forward to sharing our results from this current year with you at that time. I thank you very much for your attendance and for your patience. And this meeting's concluded.