Preparing for the Future
The OMERS mission is to provide secure and sustainable defined benefits pensions to our members. Our teams in offices around the world take this mission seriously as do both of our Boards. It is a mission and a common purpose that unites all of us at OMERS. Together we aim to ensure that the Plan is affordable for members and employers, meaningful in the value and benefits provided, and sustainable for generations to come.
As we look to protect and grow the Plan, there are serious headwinds that continuously challenge our efforts. Planning for those today puts us in the best position to ensure that we can deliver for members well into the future. On an ongoing basis we conduct reviews to evaluate our response to the following influences:
Longevity
The number of people aged 75 and over is projected to rise from 1.1 million in 2019 to almost 2.7 million by 2046. The 90+ group will more than triple in size, in the same time frame. OMERS members are living longer. This is great news for our community, while placing additional financial pressure on the Plan since the Plan pays pensions for life. (Source: Ontario Ministry of Finance)
Plan Maturity
What do we mean when we say the Plan is aging, or mature?
The term Plan maturity means that the ratio of active to retired members is shrinking – due to the fact that the number of active members is growing at a much slower pace than the number of retired members, and that our members are living longer. This results in OMERS paying out more than we are collecting in contributions. This dynamic lowers the financial resilience of the Plan, and makes it more vulnerable to economic downturns.
Workforce Trends and the Changing Nature of Work
In 2017, Deloitte conducted a Membership Evolution Study on our behalf to help us understand the changing nature of work and implications for OMERS active membership. The study identified areas of potential workplace disruption, including growth in non-full-time work; new, alternative service-delivery models; privatization; and automation and technology. These factors are expected to contribute to active membership leveling off, or even potentially declining in the coming years.
Economic Factors
Modelling confirms that we must plan for economic downturns - years where we are challenged to produce a high rate of investment return. In order in order to sustain Plan health for the long term and to weather these inevitable market conditions, we need to build protections into the Plan.
Additional factors
In addition to the forces above, the full impact of COVID-19 on economic factors or the changing nature of work is not known but may accelerate the pace and depth of change.
Did you know?
Over the years, the Plan has enhanced the benefits, adding early retirement, survivor and other benefits that have increased the value of the Plan. For every $1 dollar in value that the original Plan provided, the current Plan provides $2.60 in benefits today. In other words, the current Plan provides 2.6 times as much in benefits as the original Plan did.