Ground-breaking research shows value of OMERS pension and investment model

December 01, 2013

In the face of negative public commentary related to Canadian public sector pension organizations like OMERS, we occasionally are asked by sponsors or stakeholders for factual information they can use to respond to this commentary. Over the past several months OMERS has worked with other public sector pension organizations from Ontario and across Canada to sponsor two data-collection initiatives designed to collect factual information on the positive impact of organizations like OMERS on the Canadian and Ontario economies. These reports were prepared by the Boston Consulting Group (BCG).

The first study, released on June 6, collected concrete data about the value and importance of Canada’s 10 public pension funds, dubbed the “Top Ten” of which OMERS is one, to the Canadian economy from the perspective of their investment activities. That study determined that the Top Ten represent a major cornerstone of the Canadian financial system and the economy at large with $714 billion in pension assets under management in 2011 – 35% of Canada’s total retirement assets – while having established the reputation of Canadian pension funds’ management as truly world-class.

The second study, released on October 22 of this year was commissioned by four of the largest defined benefit (DB) plans for public sector employees in Ontario. The purpose of the second study was to gather data to demonstrate the important positive impact of the defined benefit retiree on the economy, from the perspective of spending patterns, taxes paid, and reduced reliance on government support programs in retirement. Key findings show that DB retirees contribute significantly to the tax base when retired and rely less on government assistance programs like the Guaranteed Income Supplement (GIS).

The data shows that pension organizations like OMERS:

  • Employ sophisticated investment strategies to fund the lion’s share of the pension benefits paid through investment returns, with a much smaller percentage funded through employer and employee contributions
  • Reduce reliance on government support programs by their retirees
  • Are heavy investors in Canada supporting jobs and the economy through both their public market and private investments

These studies provide the kind of data that can be of use to sponsors and stakeholders in communicating with your members in the face of inaccurate or out-of-context information that appears in the news media from time to time. For more detailed information on the studies please visit OMERS websites or click on the links above. If you have questions about the research, or if you’d like additional information that might be of use or interest to your members, please feel free to contact OMERS.