Meeting Summary

OAC Board - February 23, 2017

2017 OAC Board Work Plan

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

The Board Chair noted one major change to the 2017 Work Plan.

The OAC Board approved its 2017 Work Plan, which was prepared to comply with the OAC Board mandate approved by the Board at its meeting held on December 15, 2016.

Confirmation of Appointment of Corporate Officers

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

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

RCA Funding Policy

The updated RCA Funding Policy (“Funding Policy”) was presented for review to both the Audit & Actuarial Committee at its meeting on November 30, 2016 and the OAC Board at its meeting on December 15, 2016.

In accordance with the resolution approved by the OAC Board on December 15, 2016, Management submitted the Funding Policy to the SC Board for information at its meeting on January 17, 2017. No further comments were received from the SC as a result of that meeting.

The OAC Board approved the RCA Funding Policy, effective February 23, 2017.

Q4 2016 Operational Risk Report & 2017 Deliverables for Risk Management Group

The SVP, Risk Management, presented a high-level overview of the Q4 2016 Operational Risk Report which was updated to reflect recent developments. He also presented high-level descriptions of the key deliverables planned for the Risk Management Group for 2017 across the four main risk categories (e.g. investment, operational, pension and known-unknown) in addition to highlighting specific areas of focus for OMERS.

Following a question and discussion period, the OAC Board approved the Q4 2016 Operational Risk Report and the 2017 Risk Management Deliverables.

2016 Actuarial Valuation Report of OMERS Primary Pension Plan

Each year, Willis Towers Watson, the actuary appointed by the OAC Board, prepares an actuarial valuation report for the Primary Plan.

As recommended by the Audit & Actuarial Committee at its meeting held on February 8, 2017, the OAC Board approved the following:

  • the actuarial methods and assumptions for the Primary Plan; and
  • the annual actuarial valuation of the Primary Plan.

2016 Valuation of the Retirement Compensation Arrangement for OMERS Primary Pension Plan

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

As recommended by the Audit & Actuarial Committee at its meeting held on February 8, 2017, the OAC Board approved the following:

  • the actuarial methods and assumptions for the RCA; and
  • the annual actuarial valuation of the RCA.

2016 OMERS Primary Plan and Supplemental Plan Valuation Regulatory Filings

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

As recommended by the Audit & Actuarial Committee at its meeting held on February 8, 2017, the OAC Board approved the following:

  • the recommendation to the Sponsors Corporation to file the actuarial valuation of the Primary Plan with the applicable regulators;
  • the recommendation to the Sponsors Corporation to file the actuarial valuation of the Supplemental Plan with the applicable regulators; and
  • the OAC Board shall consider implementing reviews of the following for the Supplemental Plan when members first join the Supplemental Plan: (a) Asset Mix, (b) Statement of Investment Policies and Procedures, (c) Funding Policy, and (d) actuarial valuation assumptions and methods.

2016 Audited Financial Statements, Management Discussion and Analysis, and Press Release

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

As recommended by the Audit & Actuarial Committee at its meeting held on February 15, 2017, the OAC Board approved the following:

  • OMERS Administration Corporation’s 2016 consolidated financial statements and Audited Financial Statements – Managed Plans;
  • the management discussion and analysis (“MD&A”) and the Front Section included in OMERS 2016 Annual Report and other material public announcements regarding financial matters; and
  • the press release with respect to the 2016 results.

Competency Framework and Gap Analysis

The Governance Committee annually conducts a formal process to evaluate the OAC Board’s current collective skills and experience against a Competency Framework set by the OAC Board. This gap analysis, once approved by the OAC Board, is communicated to the Sponsors Corporation and Sponsor Organizations for use in the nomination process established by the SC to evaluate and appoint Directors to the OAC Board.

OAC most recently reviewed and revised its Board Competency Framework effective January 1, 2016.

Following a discussion and question period, the OAC Board approved and authorized the OAC Board Chair and the Chair of the Governance Committee to communicate with the SC regarding preferred qualifications for appointments to be made to the OAC Board effective January 1, 2018.

2016 OAC Board Remuneration and Attendance Report (Annual Report)

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

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

As recommended by the Governance Committee at its meeting held on February 21, 2017, the OAC Board approved the 2016 OMERS Administration Corporation Board Remuneration and Attendance Report for inclusion in the 2016 Annual Report.

Compensation Discussion and Analysis (Annual Report)

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

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

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

As recommended by the Human Resources Committee at its meeting held on February 22, 2017, the OAC Board approved the 2016 Compensation Discussion and Analysis.

HR Matters

Following discussion, and as recommended by the Human Resources Committee at its meeting held on February 22, 2017, the OAC Board approved the following items:

  • the final compensation payment payable to the retired CEO under the 2014 long-term incentive plan and 2014 long-term performance plan;
  • the 2016 CEO compensation awards and payments; and
  • a revised 2017 CEO Performance Scorecard.