OMERS Tax Strategy

Introduction

Established in 1962, OMERS is a defined benefit pension plan that invests and administers pensions for employees of municipalities, non-teaching staff of school boards, emergency services and local agencies across Ontario, Canada. OMERS investment strategy is intended to build long-term value that supports our obligation to pay pensions today and in the future.

Canadian pension plans, including OMERS, are exempt from Canadian income tax on investment income. This tax status was designed to encourage retirement savings by deferring the tax on pension contributions and investment returns until payments are received by pensioners, at which time the retirement income is fully taxed at an individual level. Globally, several other governments also provide similar tax exemptions on investment income to pension plan investors, including OMERS.

The tax strategy outlined below applies to all OMERS businesses across all locations where we operate.

Attitude towards tax planning and level of risk

As a global investor, OMERS is subject to tax laws in each of the countries where we have offices or hold investments. Integrity is a core value at OMERS and we comply with all tax laws, regulations and obligations in the jurisdictions in which we operate and invest, taking a conservative approach to tax risk and tax planning. Consistent with our approach to risk management, OMERS has procedures, processes and policies in place to ensure that tax risk is maintained at an acceptably low level. In keeping with our obligations as a pension plan, we plan our tax affairs to be efficient – to support the business activities of the enterprise and our ability to pay pensions to our members.

OMERS supports the various OECD initiatives, including the Base Erosion and Profit Shifting (BEPS) project which creates a framework to ensure that profits are taxed where economic activities are performed and value is created.  In accordance with enhanced BEPS filing obligations, OMERS now produces Country-by-Country Reporting, a new tax filing requirement in 2017 to promote tax transparency globally.

Governance and management of tax risk

OMERS governance framework includes tax-risk management. The Audit & Actuarial Committee assists the Board of Directors in fulfilling oversight responsibilities for the organization’s processes for monitoring compliance with tax laws and regulations. The Chief Financial Officer has executive responsibility for tax matters and is supported by a team of tax professionals led by the Head of Tax. Given the evolving external tax environment in which we operate, we actively monitor global tax developments to ensure continued compliance. We are committed to upholding high standards of business conduct and ethics, as reflected in our published Code of Conduct and Ethics PDF.

Tax law is complex.  OMERS uses reputable external tax advisers to obtain expert, objective advice on the application and interpretation of tax law.  In the event that a difference of opinion arises between OMERS and tax authorities, we will openly engage in discussions with authorities and support our position as appropriate.&

Approach to dealing with tax authorities

When we engage with tax authorities, we are transparent in disclosing all relevant facts, striving to maintain positive long-term working relationships. We believe there is value in actively participating in consultations with tax authorities and policy makers to promote certainty in tax-law interpretation.

OMERS regards the publication of this document to comply with the requirements set out in U.K. legislation, under Schedule 19, Finance Act 2016.