OMERS 2024 Annual Meeting Transcript

Good morning, everyone and thank you for joining us today. My name is Jackie DeSouza, I lead our Pension Communications and Engagement team at OMERS and I'm offering the following land acknowledgement on behalf of OMERS as the pensions representative on our enterprise-wide Inclusion and Diversity Council. We respectfully acknowledge that the land on which we are gathered, on which our buildings stand, our people work, and our business operates is part of Treaty 13, the traditional territory of the Mississaugas of the Credit, the Anishinaabeg, the Chippewa, the Haudenosaunee, and the Wendat peoples. We give thanks to Indigenous Peoples as the traditional caretakers of this land and thank them for their care and stewardship of these lands and waters that have shaped this place since time immemorial. Today, this traditional meeting place is still the home of many Indigenous people from across Turtle Island and we are grateful to have the opportunity to work on this land. We recognize our responsibilities as Treaty people in Canada to engage in the meaningful, continuous process of truth and reconciliation with all our relations. OMERS and Oxford are committed to a shared future where we listen to, learn from, and build genuine partnerships with Indigenous peoples and communities. We are convening here today in the spirit of reconciliation, as part of our commitment at OMERS and Oxford, and to align with Call to Action #92 of Canada's Truth and Reconciliation Commission, aimed at the corporate sector's role in the journey towards truth and reconciliation. 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. Thank you, Nia-wen, Miigwech. Now it's my pleasure to introduce the moderator for today's meeting. George Cooke, Chair of OMERS Administration Corporation Board of Directors. George.

(audience applauds)

Thank you, Jackie. And good morning to all. We have something in the range of 200 to 250 people here in person. Thank you to all of you that have come out in person on this otherwise rainy morning following a pretty odd night last night with wind and rain. And we have over 500 people registered online virtually. So, this is another twist on a hybrid meeting but because of the technology, we're able to engage with a large number of people that are showing interest in what we're going to do today. So again, welcome to all.

What we're going to do is, hear some presentations from both the Admin Corp., senior folk and from the Sponsors Corp., senior folk and then we'll go to a question-and-answer period. We're going to start as soon as I stop, with a presentation on our 2023 financial results from Jonathan Simmons, the Chief Financial and Strategy Officer of OMERS Admin Corp.

Jonathan will be followed by Blake Hutcheson, who is our President and Chief Executive Officer. There'll be a couple of videos that are part of Blake's presentation, they'll highlight some of the assets and investments that we actually have here in Canada and when you see those investments, you'll also find an environmental theme, a very positive one that runs across many of those assets that are going to be showcased.

Earlier this year, or sorry, late last year, the Board of Directors of the Admin Corp. approved the first ever Climate Action Plan for OMERS. We're very proud of the work that our management teams have put into it and we're very proud of the progress that we've made against it. Blake will talk more in his remarks about not only the climate action response, but about our Canadian investments and when he does, he has the full and complete support of our Board of Directors on both points.

Following Blake, Celine Chiovitti, our newly appointed Chief Pension Officer, and congratulations, Celine, I think everyone in this room is very thrilled that you've now assumed this role, you will follow Blake and thereafter we will shift to the Sponsors Corp. Barry Brown, the Chair of Sponsors Corp, will begin and he'll be followed by Laurie Hutchinson, the Chief Executive Officer for Sponsors Corp.

Then I get to come back to moderate what we hope will be approximately a 45-minute Q&A. I will highlight at the time that I'm back, how it's going to work, but just so people can, we're going to do it twice. I figure if I repeat a couple of things, it'll penetrate more clearly for some. The idea here is there's two floor mics, and then there's people online that are able to send questions in from wherever they may be. We'll alternate back and forth between the sides of this crowd and the people that are online and we'll try to get through as many questions as possible.

What I ask is that when you come with a question, please pose the question. Please don't use it as an opportunity to take space and make a speech. It's not that we don't want to hear your speeches, it's that we want to respond to as many questions that people have as possible, and we have a very limited period of time. So, I think that's an important message that I'll try to share for all.

That's enough for now, let's get going. Jonathan, please.

(audience applauds)

Morning, everybody. This is my 11th annual meeting, and my opportunity today is to share with you the financial story of OMERS for 2023. So, I've got control of the clicker. Let's just see if it works. Here we go, it works.

So, let's start with the headlines, 2023, how did OMERS perform last year? Well, the primary plan generated a return of 4.6%. That was $5.6 billion of investment income, which was compounded into the value of the fund. A little bit short of our benchmark of 7%, I'm going to get into that in a moment and share a little bit about the overs and unders that we experienced last year.

As CFO, I'm really focused on the long term. As you'll hear from Celine, our youngest member is 14, our oldest is 108 and we measure time in decades and so long-term performance is really important. Very pleased to see our primary plan 10-year return at 7.3%. Over the past 10 years, that's added $65 billion of investment income to the plan, which is a very important part of the pensions we deliver. The funded status, which we know is of key interest to our members who are interested in understanding how secure their pension has improved, up by 2% during the year back at 97%. I'm going to spend a little bit more time later in my presentation talking about our funded status as a pension plan.

But let's get a little bit deeper into 2023. 2023 was a very choppy year in financial markets. There was a very significant divergence between the performance of public and private asset classes. It was a very strong year in public markets. The major equity indices all roared ahead. With higher interest rates, the bond and credit markets did quite well, but it was a difficult year for private assets and OMERS has a significant allocation to private assets and the performance there was held back by higher cost of debt because of higher interest rates, some fears about recession, impacts on operating costs and lower expected economic growth. And currency, we're a globally invested organization, went against us. Some years currency supports us, some years it took away. It detracted by about 1.2% from performance last year.

Not only was the investment performance across markets quite choppy in 2023, it was also quite a different year from 2022. 2023 was a year of strong performance in public assets. 2022 was quite the opposite.

I've put on the slide, this is perhaps my most detailed slide today, it presents our asset class performance across each of our major asset classes. At the top of the screen, you see our public investments, which generated together about a 9% return in 2023 and our private investments is at the bottom with a return of 1.2%.

In public investments, bonds are back. For many, many years, coming out of the great financial crisis, returns in fixed income securities like bonds and credit was very, very low. And that was because interest rates are very low and as you'll know, interest rates have gone up a lot over the last couple of years. The last couple of years, interest rates have gone up by almost 5%, which is a very significant change. That means that fixed income investments are much more attractive. Bonds, as you see, generated a return of almost 6%, much better than we've seen over many, many years. And credit, this is where OMERS makes loans to medium-sized businesses to help them fund their capital structure, has also generated very attractive returns. I talked about this a year ago. We talked about the expectations that we had for good returns in this asset class. And we're seeing that with the strong returns of over 8% we saw this year. And finally public equities in our public investments had a very good year with a return of over 10%. Private assets, as I said, were held back. Higher interest rates, increasing costs, fears of economic recession acted as a drag. And you see that in private equity where the returns of approaching 4% are much lower than the returns we've seen in previous years. Our infrastructure business, a 5.5% return. Quite good, but not as strong as we've seen in other years. And finally, our real estate, which was the only asset class last year to present negative, experienced a tough time.

We see that as valuations are declining in that sector mainly because interest rates have gone up and when appraisers take that into account, they increase the valuation interest rate that they use that asset class and we've seen some losses in that sector. Now the good news is that we have expectations that those are getting behind us. We're not all the way through that valley yet. But we have quite a low exposure to commercial office, it's about 20% of our real estate portfolio and we're seeing improvement there. The most interesting thing is operating income across that business last year was actually up considerably. And that's a really good thing to see.

So, a year ago, when I stood in front of this room, OMERS had printed a return of 4.2%, which we were satisfied with in the context of the year that was where financial markets were very difficult. But we didn't quite know how that stacked up globally. In the late spring of last year, an organization called Global Sovereign Wealth Funds put out a report. I've reproduced it on the screen. This is a report that surveyed the performance of 36 global sovereign wealth and pension funds. On this chart, there are 10 Americans, there are 2 from South America, there are 6 Canadians. The Canadians are identified in green. There are seven from Europe, seven from Asia, three from Oceania, and one from Africa. And as you see, OMER's performance, when we look back over a year ago, was leading. So what I asked my team to do was one year does not a trend to make.

Tell me how that performance trended over two years. Now, couldn't have the data for 36 funds. It wasn't publicly available. 27 organizations, pension plans, and pension funds globally had that data. And as you can see, OMERS performance even on a two-year basis was the strongest. And so I said, "Okay, here we are in 2024, We now know the 2023 results and presumably we know the '23 results of all of the 27 names on this list.

How are we doing on three years?

Not quite the top of the pile as we've seen for the last two years, but certainly doing very well. As you can see, OMERS performance over on the right hand side, very, very strong on a three-year basis. Three-year returns of 8% is something that we are very, very proud of.

Let's shift from returns to expenses because expenses matter and they need to be managed. That's one of our core beliefs at OMERS. And the metric that a CFO, I track most closely is something called our management expense ratio. This measures our investment expenses as a proportion of our assets. It's expressed in basis points. 1 basis point is 1% of a percent. So 1% of a percent and here you can see that our management expense ratio has trended down over the last three years.

I always look at this over a trend basis. And that is predominantly explained by the lower performance that we saw in private assets this year. Net assets continue to grow, this chart tracks our assets back since 2019. Now standing $128.6 billion strong, our organization is AAA rated by two global credit rating agencies and has the second highest ratings from two others, which is which is a phenomenal hallmark of financial strength.

And our assets are globally very diversified. This is one view of asset diversification. This is by asset class. This chart corresponds with the asset classes that I talked about early in my presentation. It's actually been quite stable, the highest level over the last couple of years, but there have been some movements. Back to way a little bit from public equities, that exposure is a little bit lower. We now have relatively low financial leverage. That's cash and funding. That's the black piece of the pie, which is just pulled out. Low leverage means that we've got lots and lots of cash available right now to make investments when attractive opportunities come their way. And our other asset classes, as I say, the allocation to those have been quite stable. Although below this, there are a number of things going on. In the fixed income category of bonds, we've been increasing duration over the last little while and duration of those bonds has now gone up to seven years because we think making investments in longer term bonds is much more attractive. And we've been rotating the credit book from public credit into private credit because we think that those are where the best opportunities have been over the last year. This is the second view of diversification. We are a proud Canadian investor, but we are also diversified globally. George at the beginning commented that Blake is going to unpack some of our commitment to Canada later on, so I'm not going to do that. But other than Canada, we have about half of our assets invested in the United States because we have observed the strength of that economy and with significant allocations to Europe and to the Asia-Pacific region where our allocations in Asia-Pacific are mainly in Australia and in India. Let's switch from the investment side of the business to the pension side of OMERS. OMERS paid over $6 billion in pension benefits to our members last year. That is a terrific driver of economic activity at home here in the province of Ontario. It generated close to $14 billion of GDP for our province. That is about 1.5% of the GDP of the province, which is phenomenal. Our activities spun off close to $4 billion of taxes for our governments to fund all of the programs that our governments have underway. That's up about 14% since we last did this analysis back in 2020. And finally, we are making a real impact on jobs here in the province of Ontario. Over 140,000 jobs are generated through OMERS activities, whether that's through the pensions we pay, our own activities, the investments which we make. About 25% of those jobs are held by individuals under the age of 30. So, it's impacting youth employment and about 30% of those jobs are in rural areas outside of the main municipalities and so that's supporting Ontarians across our province. I'm just going to go back one, a lot of people ask me about, "Well, pension contributions now, Jonathan, are lower than the pension benefits we pay. Is that an issue for us?" And the answer frankly is no, for a number of reasons. One is we've been understanding the fact that more and more people are retiring in our pension plan for many years. And so, we're very well prepared. We're prepared for that in the way we invest our assets to generate the cash flows that we need to continue to meet our pension payments as we go into the future. We've thought about it in our funding policies, both in the Administration Corporation and in the Sponsors Corporation in making sure that we're building up our assets to be able to pre-fund those pension liabilities before they are due for payment. And we're modeling, and here's one of the models that I look at most closely. This tracks our net pension outflows, which is the pension contributions that we collect, less the pension payments that we make and compares that to our total assets. And as you can see on this chart, we think those net pension outflows are going to stabilize it at well below 2% of our net assets. And that means if going forward, OMERS is able to generate, pick a number, 7.3% is our 10-year return going forward. That is easily going to cover our pension outflow going forward, meaning there's plenty of liquidity in our plan. This is my final slide. And I have saved what I think is the most important slide to last, because this is the long-term picture of the progress of the OMERS pension plan over the last 10 years. Actually, I've taken this back to 2012. And the reason why I took this chart back to 2012 is at OMERS we smooth investment returns over five years. And so 2012 is five years after the great financial crisis of 2008, which was a difficult time for all pension plans and all asset managers globally. And this chart tracks two very important lines. The light blue line, which slopes up from left to right, is the progress of our funded status on a smooth basis. This is the ratio of our assets to liabilities and back in 2012, we had $0.86 for every $1 of pension liabilities that OMERS had and today that's standing at 97%. And so that's been building back over the last little while, and that 10-year investment return of 7.3% is a key driver for that. Now you'll see that the funded ratio dipped a year ago from 97 down to 95. What was that all about? That was all about that high inflation that we saw coming out of the pandemic. You might recall that back in 2022, we put up $5 billion of additional liabilities. Members got up to a 6% increase in their pensions a year ago. This year they've got a 4.8% increase in pensions for inflation. We've been able to absorb that increase in inflation, and the funded status is now back at 97%. Financially stronger, but also more conservative. And that's the dark line that slopes down from left to right. And that's the discount rate, which is the interest rate excluding inflation that we use on our liabilities. And we have been on a pathway to reduce that discount rate over time, now stands at 3.75%. That is right in the middle of the strategic range that the Administration Corporation Board of Directors approved back in 2023. And so we're very comfortable with the discount rate that we're using to value our liabilities, and we're very pleased with the improvements that we've made over time. That's the financial picture of OMERS in 2023 and over the last little while, Blake, welcome to the stage.

(audience applauds)

So good morning everybody, and again I will join the chorus of those who thank you for being here on this rainy day and those on the screen. I wanted to begin today actually by sharing three very sincere thank you.

I don't often in a crowd of this nature have an opportunity to do that, so, I thought I would start with that today. And the first is to our executive leadership team. 14 terrific executives today spread all around the world, bringing lots of diversity, lots of strength to the table. We're an organization today that nothing happens with an individual effort. It's all a team effort. And we have equal and opposite strengths and I just wish you knew my team the way I do. They're deeply dedicated, they're incredibly committed to you and I really would like to just say I would put them up against the best in the world. And I thank you all sincerely, many of you are in this room. Jonathan Simmons, you got a brief glimpse of him. No, I didn't give him the black eye, quite the contrary. We are very supportive of our CFO and I just wanted to say thank you to the team. I also wanted to thank our Board of Directors. Again, I don't get a chance to do that very often. OMERS is increasingly a complicated global platform but also investment entity, complex services to all of you. And if you think about it, we have 1,000 employers, we have 444 municipalities, we have 33 substantial stakeholders and sponsors. Today we have roughly 3,200 employees, although through our various connections and companies, it's over 100,000 employees. At any given time, we have 30 big infrastructure investments, roughly $30 billion of your money. We have 25 big private equity businesses, roughly $20 billion of your money. Our real estate platform today is 750 assets in many continents around the world, roughly $24 billion of your money. And then on any given day in the markets, we'll have somewhere between $30 and $35 billion in equities. And the same in what Jonathan described as bonds or credits when we lend to others, we have 10 global offices in 14 times zones. So, an incredibly far flung operation to handle. Our board have their arms around it. Our board are a quick study. I can promise you we don't always agree with the views of our boards, but the healthy tension that is in that room, I think, serves you incredibly well. And again, I just wanted to thank them for their professionalism and their commitment to all of you. Most importantly, I want to thank everybody in this room and on the screen and at home across the great province of Ontario. It is an honour and I speak on behalf of our board, our management team, and our entire employee base to work with and for you. We have deep respect for what you do for our communities, like very deep respect. I've had a chance to travel, so appreciate you keeping our community safe, looking after them, advancing them, improving them year in, year out. And we know every day you wake up and your working life, and some of you are already through your working life, you contribute to something very meaningful to you in exchange for what we call the pension promise. And our job is to deliver on that promise, because the way I grew up, I was taught, a promise is a promise. So, I just want to let you know everything we do is in service of that, in honour of you. And we are going to continue to do it, not only for today or tomorrow, but for the weeks and the months and the years and the decades ahead. So, thank you for the honour to work on your behalf. I'll turn to some slides and my agenda is really to take a little glimpse of our history to talk about 2023, some of the things Jonathan didn't touch on and then I'll look forward, again a little bit of a glimpse of what we see between now and 2030. So, looking back, I love this particular slide. This was our first Annual Report. That was the cover of the first Annual Report, 1962 and I'll read it for impact. "OMERS removes the burden of planning, financing, administering a pension plan for municipalities, thus helping them transfer and develop their employees. It allows municipal employees to look forward with confidence to a period of well-learned retirement upon completion of their service." What was true then is exactly true today. Some things do not change. What is different? On that particular day, we had $4.8 million under administration. That's with an M. We had 133 employers, we had 9,900 members and we had 12 employees. Fast forward to today, we have $130 billion with a B dollars, 1,000 employers, 620,000 members and about 3,200 direct employees. While how things have changed, what hasn't changed is, even though there have been tweaks to the system over time, for now, over 62 years, we have found a way to pay pensions on time and as planned and as promised. This next slide talks a little bit about our history. It's a little complex on the screen, so, I'll just address it at a very high level. In 1963 with 12 employees, and frankly for the next 30 years, we basically outsourced all of the investment performance. So, we were paying high fees to others to manage your money and then about 30 years into the program, we started to develop capital markets expertise of our own. A, it saved fees, B, we put together really professional people who could manage your money on your behalf. And then it was about 1991, we got into the infrastructure business directly with one small investment here in Toronto, happened to be in the hospital sector. Today, that seed of an idea, originally called Borealis, one small investment is a $40 billion global business with 30 significant assets, that business has traditionally, even in the last 10 years, delivered between 10 and more than 10% year in, year out, from the seed of an idea.

We bought Oxford Properties in 2001 for $3 billion. We OMERS had a small collection of real estate assets prior to that, that gave OMERS a platform. That business today is approximately $85 billion of assets under management. Your money with some debt, plus we manage a lot of third-party capital. For example, we manage about $10 billion of CPP's assets. We bring them in, charge them fees. Don't tell them and we lead their business for them. And that business, Oxford Properties today is among, I would say, the five greatest real estate business in the world from a seed of an idea in 2001. We then started, and our CFO at the time originated the business into the private equity space and today fast forward, we as I say, are about a $20 billion business. And that business has consistently delivered north of 10% for you during time.

So, then it was about 2008 that we said we have diversified our strength in many, many divisions with deep teams. But now we have to diversify internationally. Why? Because in order to do extremely well with any business, you put your chips on some squares early, and then you spend the rest of the time trying to keep your portfolio strong through diversification, through multiple facets and multiple industries and multiple platforms. So, we set up an office in London we set up an office in New York, we set up an office in Sydney and we set up an office in Singapore. So, we arrive here today with a deeply diversified enterprise for you.

And I'll share one other footnote in our history and that was in 1998. Mike Harris was the Premier of the day, we were 134% funded and they took the decision to save municipality's money and our members' money to take a contribution holiday. And that holiday opened up about a four-year period where we didn't pay into the plan and so our funded status of 134% went down about 50 points. It went down to the low 80s. And as Jonathan said, that's a hole we've had to climb out of ever since those days, but that's part of the history.

Today we arrive with a plan that's about 97% funded and I would say to you out loud, I think we are diversified to where we need to be for the size of our plan. And all we are focused on is just getting better at everything we do. We don't need more geographies. We don't need more platforms. We will see things. We started a ventures platform. We started a growth platform. We have a carved out piece that I'll talk to later that can get us access to some of the new economy and things like green tech and other things. So, we will add some nuances in diversification.

But the truth is we are just going to get better at everything we do, because why? In order to compete in this world, if you aren't great at what you do, you can't compete. So, our focus today is setting our plan up 97% with a view to get to 100, just getting better for you with every interaction, every decision we take. So we set this plan up to be sustainable for the decades to come.

We've talked a little bit about our Canadian story and I think of OMERS as an unbelievable Canadian success story. I think we're in the greatest country in the world. I think we're in the greatest province. And I think we are one of the examples in this country as to how truly terrific businesses can be built and sustained. And when I think of it, when you think of the great businesses that many of us grew up with, they didn't make it over a 62-year history. Eaton's, Sears, Olympia and York, the Reichmann Empire, it was the largest real estate company in the world based here in Toronto. Nortel. Lots of examples of perilous stories over 62 years.

There are lots of examples of great Canadian businesses that get sold to foreigners. Four Seasons, Fairmont, all the beer companies. Even when we take our kids or grandkids to hockey practice and drink Tim Hortons today, the profits from those go to Brazil and New Jersey because that business has been sold elsewhere. This is a story that isn't for sale. It's your enterprise. It's your platform. This is your plan, it is never for sale. You're going to have it for the next 62 or 162 years, I think that's a really good story. It's intact. It's not for sale. It's yours. And I do think it is truly a great story in Canada and the Canadian Maple Eight are often touted. We are not perfect, we have issues. We always will have issues. That's the nature of enterprises this size and when you have a massive family, some days things are good, some days things aren't good. Some days kids are sick. Some are failing. We're always going to have an element of that and I'm readily prepared to admit it. But in the global context, the Maple Eight are thought to be among the best examples of pension plans in the world and our job is to make ours the envy of the Maple Eight.

There's been a lot of noise recently in the press saying Canadian pension plans aren't investing enough in Canada. I will just say out loud, those criticisms are largely directed at a few others that I won't mention. I think you can be very proud of our story here in Canada. Roughly 24% of our portfolio is invested here at home, 3% of the global GDP is in Canada. So, when you think about that, we're still 24% invested in a nation that's 3% of the global GDP. You want us to have diversity, but you also want us to be here where the numbers warrant and it makes sense. That's a $34 billion portfolio today in Canada and if anyone asks you, because you are all influencers, you should be very proud of us. We own Banff Springs Hotel, Jasper Park Lodge, Chateau Lake Louise, Chateau Whistler. We own some of the best office buildings in this nation, including 100 Adelaide. We own Yorkdale Shopping Center, Square One, Scarborough Town Center, Upper Canada Mall. We own 50% of Bruce Power as you know, 31% of the power supply here in Ontario. We own Teranet, which is the land registry system here in Ontario. We own great equities here like RBC. We've just taken, and I'll talk about it in a minute, a little piece of the Raptors, and the Leafs, and the FC, and things of that nature in our backyard. I could go on, but I just want you to know we are heavily invested. We are committed to this nation. When we see opportunities to do more, we will and when you read it in the press, let's keep proper context, because I think what OMERS is doing is something you should be proud of.

Next slide please.

(uplifting music)

We are so grateful to our more than 600,000 members for their dedication and commitment to Ontario's communities. We remain focused on our ability to deliver a plan that will continue to provide security in retirement for generations of members to come. We achieve this by having a diversified global portfolio. As part of our portfolio, we are proud to invest in assets that are future focused and contribute to a sustainable and strong future.

Let's have a look at some of our investments in Canada that are working to build your tomorrow and a stronger community.

We've always put sustainability at the forefront. We've always tried to lead the market and we're doing it with The Stack, the first zero carbon building in the country. There's six buildings delivering in Downtown Vancouver right now we're the only one who made a zero-carbon pledge.

We made that in 2017 when we started planning the building. It says a lot about us as leaders, that we're the only ones delivering today in 2023 with a zero-carbon building.

(calming music)

It's pretty widely accepted that carbon removal will have some role to play in everybody's net zero plans. In investing in a business that is aiming to remove carbon at a global scale, OMERS is not only contributing to its own net zero goals, but also to the greater goals of society. Deep Sky is an early-stage project development company that is aiming to be the first in the world to remove gigatons of carbon from air and water. Canada's uniquely positioned with the three ingredients that you need to build a business like this. That includes the expertise which comes from people who've worked in oil and gas. It includes renewable energy and access to things like hydro and nuclear power. And it includes the space to be able to store the carbon underground, which Canada has. What Saudi Arabia is to the oil industry, we believe Canada could be to the carbon removal industry.

We are at James Snow Business Park, which is a master planned, 3.3 million square foot business park in Milton, Ontario, one of Canada's fastest growing communities. There's multiple sustainability initiatives from targeting Leed Certification, as well as doing something that certainly sets Oxford apart, which is putting rooftop PV Arrays on a speculative building which was intended to provide the future occupants with clean renewable energy. We even had involvement from Department of Fisheries and Oceans asks that we engage the consultation services of Mississaugas of the Credit First Nation. So there was many, many stakeholders involved with ensuring that any species at risk were not harmed during the course of this development. You can clap if you want.

(audience applauds)

That's one of two short videos we have just to help tell our story better than we can up here in terms of our commitment to this nation. I will go quickly through some of the 2023 highlights. Today we have approximately $130 billion of your money. As Jonathan said, we are very proud at an 8% three-year return to be among the top few in the world, tracking a three-year return.

Our net investments last year were lower than usual because we took it very carefully, particularly in the privates during a difficult year to deploy capital at $3.5 billion. And we've redirected $4 billion to, as we say, credits lending to others where we think we can get an 8 or 9% return, which is an equity sort of return without taking equity risks.

And today, if you think about it, we're about 50% in privates, we're about 30% in bonds and private credits. Only 20% is subject to the volatility of the capital markets, which may mean in a year where capital markets roar, some of the other pension plans will do better, but in years where they don't, we will be stable and be able to deliver in a very, very respectable range. That's the goal, that's the objective, that's how it's set up.

Our infrastructure business deployed $2 billion last year, 2 significant acquisitions, 3 divestitures. We're today about a $40 billion business and I'll use this slide to address a question that may come up. One of our smallest investments, but it's a real one, is Thames Water and you may have read about it in the press. We've had a position in the water system in the city of London, with nine partners, including the largest pension plan in the UK, which is the biggest partner.

And recently we were asked by the regulator to spend over 5 billion Canadian dollars to reinvest in that structure and that system, which we were prepared to do under fair economic terms but the truth is they wanted us to agree to a deal that would not satisfy you from a return perspective or any of the other nine pension plans. And so, we thought we could get to a place where the regulator would be fair and reasonable. At this point, they haven't. So, in the last week or so, we put our pen down.

You don't want us to spend money on your behalf that isn't going to be economic and deliver the proper returns. It's been a difficult environment because it gets played out in the press, it happens to be an election year there and I just want to assure you when you read it, we've done our level best to try to make this work. We could have a write-down this year, it is a fraction of 1% of your portfolio, it'll affect the returns in a very, very insubstantial way, like a few dips maybe.

But nonetheless, it's not something we're happy about, it's not been something that I'm happy about, because everything we touch, we want to make work for you. But when you read about it, it does not affect your plan in any material way, not this year, not tomorrow, not ever, but you may read about it in the press. And I thought rather than duck it in a meeting like today, I should address it square on.

Oxford, as Jonathan said, it was up 9% last year on an income basis, at least more than 10 million square feet. We have 70 active development sites that usually can unlock a 25% return as they roll out in the next 10 years or so. This business has historically been a 10% returning business for you. Last year was a tough one, largely because as Jonathan said, the metrics. Some of our evaluations are down because because appraisers placed them down. But this is a great business on a go-forward basis, it happened to have a difficult year. The stack, which one of the videos just spoke to, this has won so many international awards for being the most sustainable building built in this continent to date in an office building. and St. John's Terminal, which is a building we built with CPPA, $2 billion spec building in New York, we sold it to Google for about a $500 million profit and this asset was just named in the most prestigious international conference in France, the office development of the year, globally. So those are stories for Oxford. Private equity today again, continues to grow.

120 small acquisitions for our platform last year. We have about $2 billion of your money invested in the new economy in ventures. And we have today about $6 or $7 billion of your money that's being deployed into green tech and life sciences and some of the biggest tailwind opportunities that are presenting themselves in the world today. I'm often asked the question about sustainability. Are we committed? The answer is, yes, we are. George alluded to it. We are as a team, we are as an organization. I will tell you a story,

10 years ago, Oxford decided we needed to be the leader, or a leader if not the leader, in the sustainability space. Oxford is represented that way today, just won Fast Companies magazine's 10 most innovative and sustainable real estate companies in the world. And about three or four years ago, we at OMERS made the same commitment. We need to be a leader in this space, it's important to you. it's important to our customers. No, we don't have to compromise our returns to continue to invest in good ideas here. In fact, we can enhance our returns by getting this right. And if you haven't read our Climate Action Plan, I would encourage you to do it. Again, we have a long way to go, we can't declare victory. We'd like you to read it, we'd like you to share it. We'd like to share it with you and I think you'll be proud of the direction we're headed.

I also get asked a lot about Maple Leaf Sports and Entertainment. We agreed through a deep relationship that we have to buy a 5% interest in this platform. I think it's really great that 620,000 Ontarians, all of you, now own a piece of the Raptors, the Leafs, the FC, the Argonauts, but more importantly this should be an unbelievably profitable investment for us over the long term. We were able to get in through a relationship, people haven't been invited in and we just fundamentally believe that the long-term value of this asset will be extraordinary for you from a return perspective.

I'm going to call Celine up in just a second, I will just say this, we have 400 dedicated people. Last year, 96% members satisfaction. That's the feedback we get for you. We responded to 145,000 phone calls and I've watched a lot of service companies grow, and we've built them, including Oxford. And this is really a service platform that is trying to anticipate your needs. I know we're not always getting it right, but I'm really, really proud of the work they're doing. You'll continue to give us feedback. We are here for you anytime of the day or night, any need, any question you have.

We've had a chance with Celine's team to travel extensively across the province, I would just like to say it's one of my favorite things to do, to get out of the office on Bay Street or wherever we are, to meet with many of you. I have to say, I just want to thank you for having us out and if you have ideas for us to visit your community, we will make a level effort, right? Celine, over the next few years. Every time I come out of those meetings, I understand a little bit more what's on people's minds, It helps us improve our business, and it inspires us, frankly. So, thank you very much.

As an organization, far too many awards to mention. I would just like to say that these are external validations, They sort of underscore what I know internally as to where we're headed, including best places to work. One of Canada's most admired culture is one of Toronto's top 50 employers and the list goes on. And looking forward, I think this is my last slide, we're just approving this year, a 2030 plan that we hope to get support from both boards in the next several months. And the one thing I'd like you to remember is 1, 2, 3, 4. Between now and 2030, we fundamentally think we can be 100% plus funded. That's one. Two, our plan goes from $130 billion to we think around $200 billion of your money. So, a 65% growth over the next 5 or 6 years. We will be a dominant force in the 3 continents and about the 12 countries that we have decided to invest in. We're being very strategic and focused on where we're investing. And the enterprise itself will be approximately $400 billion of assets under management, which includes some third-party capital and the five that isn't on this screen is if we get a 5% return, which is on a real basis, which is equivalent to 7 or 8% return when you factor in inflation, which is our goal, we should be at our current discount rate, we should be as much as 110% funded between now and 2030. Now we may bring our discount rate down. There may be other things that happen along the way but that's our ambition, is to be fully funded, plus a cushion, between now and five or six years hence. So I'll leave it with that. I just wanted to restate on behalf of the board and our management team and all of our employees, it's an honor to work with and for you. Keep looking after our communities beautifully, and we will do everything we can to take all your expectations and hopes and better them with our every interaction. Celine, if I could ask you up.

(audience applauds)

Good morning, everyone. It's so great to be here with all of you today. As you heard, I am the Chief Pension Officer for OMERS now. As the Chief Pension Officer for one of the largest public sector defined benefit, jointly sponsored pension plans across Canada, you can appreciate that one of the most important things that I do in my job is help people prepare for their retirement, right? Like I'm in the business of retirement. So, it might surprise you to know that I've spent a lot of time over the past 12 months thinking and asking this question. Is it time to retire retirement? Now, I know that sounds a little ironic coming from me or at the very very least, maybe a little career limiting. But just hear me out. You see, I believe that the traditional way that we think about retirement needs to be modernized because it doesn't necessarily represent the way we live in the 21st century. You know the image that I'm talking about? It is the Freedom 55 image of retirement. It looks something like this, right? Spending our days, living a life of leisure and relaxation with the love of our life. My favorite photo here is gazing into the eyes of our loved ones for the remainder of our days. Now, I don't know that this ever represented the reality of retirement. But at the very least, it's built around a very linear three-stage life model that assumed that we would live our life in the following way: We'd spend the first 20 to 25 years of our life in an education stage, right? We'd go to school, we'd learn a trade, we'd learn a skill, we'd figure out what we want to do with the rest of our lives. We'd then work. We'd spend the next 35 to 40 years of our life working, making a living, paying some bills, paying our taxes, maybe purchasing a home and saving some money so that we could afford to spend the next 10 to 15 years in the retirement stage of our life where we would live our days in that life of leisure, rest, and relaxation. Now, if you do the math around this, you'll see that that gets us until around age 75. And back in the early 1960s, Blake talked about OMERS was formulated back in the early 1960s, this was the average expected lifespan, right? We were expected to live until around age 75. But we know today that, that is no longer the case. With investments in infrastructure, improved healthcare and advanced technologies, we are now living well into our 80s, 90s, and even 100’s. In fact, the oldest living human today is 117 years old. We have more than 500,000 centenarians across this planet. And at OMERS alone, we have almost 300 members who have celebrated their 100-year birthday. And so, the question now is, what do we want to do with that gift of 30 years? And how might we reimagine what retirement in the future looks like? And so, as we think about it, we look towards some trendsetters who are really squashing a lot of the biases around ageing and showing us that we can age and retire any way that we want. Now, what that might mean, and what I challenge everybody to think about in this room, is retirement might not any longer be a one-size-fits-all approach.

Perhaps it's as personal and unique as each and every one of us. What that might mean is that some individuals might want longer working careers and that's okay. Others might decide to go back to school and learn something new and others still might decide that they want that life of leisure and play. And to all of that, I say bless you because there is space for all of this in the future of retirement. And so, our job in pensions is the same job we've always had and that is to be of service to all of our members and be with them across their lifespan and really help them make the decisions in their 30s, 40s, and 50s. That's going to allow them to live out their extraordinary life in their 60s, 70s, 80s, and beyond. And so, as we started to think about this, we tried to understand, what is the secret sauce? What is the magic to longevity? And how can we look at living well into our 100-year life? And so, we look towards the blue zones. I'm sure many of you have heard about the blue zones. There's five countries throughout the world where there is a higher proponent of individuals who live to 100 than anywhere else. And it turns out there are three things that they do. I'm going to tell you the secret today. So if you have a pen and paper, get it out. So, three things that they do that seems to help them live a wonderful life into their 100s, the first is financial security. They're not worried about their finances. They have enough money to purchase healthcare, to purchase nutritious foods, to go out and do activities that they like. They don't worry about outliving their savings. Well, guess what? You heard earlier today, we've been paying pensions for decades. One of the basic premises of the defined benefit model is our members will never outlive their savings. So, we can check the box on this one. But the second thing they do is social connections and purpose. We need human fellowship and people within the blue zones take the time to nurture their friendships and relationships. They go and they commune at places of worships. They go to local community centers, they have long beautiful meals with families and friends. We know it's being widely recognized that loneliness is a significant health issue. And there's research out of the National Institute of Aging that talks about individuals as they get older are more susceptible to loneliness and social isolation. Again, at OMERS, we have a beautiful community of over 600,000 members, more than 1,000 employers and 35 unions and associations. I know we can find a way to help our members better build those social connections and maintain them in their retirement. And then the last magic piece of individuals out of the blue zones is mental stimulation and giving back. OMERS members spend their careers being of service to the public, and so having a reason to get up in the morning and having that purpose-filled driven activity at retirement is something that we need to help members think about. And so, we're starting to think more and more of pensions as basic social infrastructure, which is becoming even more important as the world is graying. We know today in Canada, there are more individuals over the age of 65 than there are under the age of 14. And so, it's so important for us to build a financial resilient society for all individuals. You heard earlier today from my friend Jonathan Simmons, we know that there is good economic sense in these pension plans. We positively impact more than 1 out of 11 households across Ontario and we know that this is a good thing for society. So, I've talked a little bit about how pensions are good for members, how pensions are amazing for communities, but they're also a powerful attraction and retention tool for employers.

My friend Brian Rosborough is in the room today. The Association of Municipalities of Ontario underwent a survey, and they surveyed thousands of municipal employees. And the questions that they asked included, what brought you to the public service, and what do you like most about your job? In both cases, the number one answer was their pension and benefits. So, we know that this gives employers a competitive advantage that is so important when we're looking at building out the future workforce of municipal and public sector services. And so, all of this information is being taken back. We are going back and one of the things that my team and I do is travel across the province to help members prepare for their retirement. We will continue to do that, and we will be now focusing on three themes. Financial security, so understanding your pension, social connections, and mental stimulation in retirement.

Now, I would be remiss if I didn't mention, I know that we have equal payday coming up. I must talk about some of the things that we're doing at OMERS to help narrow the gender pension income gap. Sadly, today, across all OECD countries, women continue to retire with about 26% less pension income than their male counterparts. That in part is because of the fact that women tend to take more time off of work to have and care for children, and that impacts their income in the future. At OMERS, we are talking about this more than ever before, and we are making it even more affordable for individuals to be able to purchase their breaks in service and we will be starting a campaign to educate members about this in the coming months.

Blake talked earlier about the fact that we run a service business within pensions. Everything that we do really is of service to you and we're trying to get better each and every day. Last year we released the Pension Blueprint. Thank you so much for making it one of the top five debuting podcasts with about 20,000 followers. We are busy curating creative content for you with season two launching later this year. So, if you haven't followed us, please do that. We're also really busy building out our digital platforms. We know that the next generation of OMERS members want to engage with us in a different way. And so, we continue to build out myOMERS and provide more tools for members to have information about their pension at their fingertips. As well as our 1,000 employers, we continue to work on e-access and build a relationship model to help support you in the work that you do.

And so, to wrap up, I actually, and I did this last year, but I'm going to ask all of my pension team members in the room today to please stand up so everybody can see you. Anyone on my team, please stand up.

(audience applauds)

Thank you.

(audience applauds)

Last year you rewarded us with a 96% member service satisfaction rating. We do not take that for granted. We work at it each and every day. Please see one of us at the end of this session if you have questions about your pension. We have our OMERS booth set up outside. If you'd like us to come out and talk to your members, we are happy to do it. We know that we are stronger together, and together we can make an impact on our members' lives. With that, I'm going to ask to roll the second video before I turn the stage over to my friend Barry Brown.

We are also helping to build vibrant and strong communities that will support Canadians, OMERS members, and their families for the long term. Building a community that will stand the test of time was our inspiration for the Square One District. It is the largest mixed-use development in Canada's history. It is an 18 million square foot development that will deliver over 18,000 residential units and over 10 acres of park, community, and transit infrastructure, and all of this on Oxford-owned land. This is an exciting project for all of us at Oxford and OMERS to be part of, because in life we don't often get the opportunity to build something of this magnitude from scratch.

Bruce Power is the largest operating nuclear facility in the world, supplying approximately 31% of the electricity for Ontario. Bruce Power is OMERS's single largest investment with our initial investment dating back to 2003. Beyond the generation of electricity, however, Bruce Power has been a global leader in the production of medical isotopes for over 35 years. The isotopes produced at Bruce Power are used to fight cancer, keep hospitals clean, fight disease, and sterilize food. In 2019, Bruce Power partnered with the Saugeen Ojibway Nation, known as the SON, to enter in an agreement to market current and new medical isotopes, supporting the global fight against cancer while creating new meaningful economic opportunities within SON territory. This partnership includes an equity stake in revenue sharing and is an example of one of Bruce Power's strategies to engage with local Indigenous communities.

Beanfield is an owner and operator of fiber infrastructure delivering services to commercial and residential customers in Toronto, Montreal, and Vancouver. Digital infrastructure has become an essential part of our daily lives. They connect us to loved ones, friends and family, our financial services, our healthcare, our education, and even more. Digital infrastructure is a very interesting place for investment. We believe that over the next decade, technology will really reshape many industries. Beanfield is always looking for ways to have a positive impact. It's more than just about fiscal growth. It's about a local homegrown story about how we can contribute and invest in the economic and social value of the Canadian landscape.

Because of the work you do each day, we are honored to work on your behalf to build a sustainable, affordable, and meaningful defined benefit pension plan that supports you and your families, communities, and the planet for years to come. (audience applauds) - Good morning and welcome. My name is Barry Brown. I have the privilege of serving as the Chair of the Sponsors Corporation Board. And I'm grateful for the opportunity to provide you with some updates on behalf of the SC. So far this morning, (clears throat) excuse me, you've heard from representatives of the AC, the corporation responsible for administering the plan and investing its capital. Our CEO, Laurie Hutchinson, from whom you'll hear shortly, and I represent the SC, the body with the responsibility for all decisions in respect to the benefits and contributions of the plans and the board composition and compensation. We often refer to our mandate as OMERS ABCs, appointments, benefits, and contributions. Under appointment setting, we are responsible for the appointments protocols for both boards. This includes determining the composition, compensation, term limits, and the appointment processes for each board. Each board has 14 members. The AC board also has an independent board chair who is appointed through a separate process. In 2023, we completed five re-appointments and five new appointments. As I noted, we are, sorry, we're behind in the... As I noted, we're also responsible for making all decisions about the design of the benefits provided and contribution rates required of active members and their employers. In 2020, the SC board approved a plan, changed it, effective in 2023, would allow employees who work less than full-time to join the plan immediately upon their hiring. This change recognized the importance of providing all employees with access to the plan so they can build their retirement income. I'm delighted to say that in 2023, almost 45,000 non-full-time employees took advantage of this change and enrolled in the plan. The board also made three very narrow plan changes in 2023, to address specific changes in employment status for smaller subsets of the membership. While important to certain employees, these changes had no material impact on the plan, and the details of these changes can be found on our website at omers.com. Much of the work the SC does is focused on ensuring the plan continues to be strong and resilient over the long term. OMERS has been delivering pensions, as Celine has noted, over 60 years. Our goal is to provide sustainable, affordable, and meaningful pension plans to you and to future generations for many decades to come. As you can see on the slide, we define sustainability as a plan that consistently, over the long term and across generations of members, deliver a meaningful, valuable, and appropriate range of benefits to members within a range of costs that is affordable to active members and their employers. This naturally becomes more difficult as the plan matures. And this is why we include the long-term perspective in all of our decision making. It is our responsibility to carefully and regularly monitor the plan and future outlooks to ensure that the plan has the reserves it needs over the long term or if not is on an appropriate path to build them for the plan's continued success.

To this end, the SC board conducts regular reviews of the plan. These reviews are not singular events, but rather a part of an ongoing process to fulfill our mandate. Last year, this time on this stage, I provided you an update on a plan review that the SC board was in the process of conducting. In the course of that review, the SC board took the time to ensure that all relevant information was considered and a wide range of potential outcomes was thoroughly evaluated. And as many of you know, we met with sponsors and stakeholders during that process to get your perspectives and your advice.

After this thorough review, we concluded in October, 2023, that the plan was sufficiently robust, that no changes to benefits or contributions were necessary to improve its long-term sustainability. We were satisfied that the current path will allow the plan to build the necessary reserves as it matures. Of course, this is never a one-and-done exercise and the SC board has the responsibility to continue to monitor the health of the plan as the current environment develops and other risks or opportunities arise. Constant monitoring will help us to achieve our objective, to deliver our pension promise to current and future generations of members.

Thank you for this opportunity. I'm now going to turn the stage over to Laurie Hutchinson, our CEO, for further updates. Thank you very much.

(audience applauds)

Good morning to everyone in the room and to those of you who are joining us online. My name is Laurie Hutchinson, and I'm the CEO of the Sponsors Corporation. I will say, although it's been said before, it is an honor and true privilege to help look after your pension plan. I'd like to thank all of you for taking some time out of your busy day today to hear from us. I will note that I am the final speaker before we move to question-and-answer period. So, I will just take a couple of minutes to provide and expand on a few of the remarks made by Barry.

We take very seriously the importance of making any decisions about the plan's benefits and contributions. It's about achieving balance, which can be challenging for a number of reasons. The first and most important reason is that we have a very diverse membership in the plan.

Over 600,000 members, as you've heard. And in making decisions about benefit design, we strive for benefits that are meaningful across different profiles of members and across different sectors. Often the needs and wants are not the same, not for everyone, but we need to strike a reasonable balance in the decisions that we take.

Second, we need to make sure the benefits remain meaningful over time. Celine talked about many of the trends and the evolving of societal changes. We monitor the needs of our membership throughout these trends, especially as they evolve, so members and employers will continue to find value in the benefits that we provide in the plan well into the future.

And third, we need to make decisions about the price we charge for the plan. The price needs to be affordable, job number one. Our goal is that members pay contributions that reasonably represent the value of the benefits they can expect to receive from the plan when they retire. And we also avoid placing a financial burden on any one generation of members over another, as well as employers. We regularly monitor the funding and the contribution rates to achieve this balance over time.

Our sponsors and stakeholders play an important role in our decision making. We work with the various organizations that represent you to make sure we understand the needs and the issues that matter most to you. And a great example of that was last year during the plan risk assessment, when we reached out to our 33 sponsor and stakeholder organizations, inviting them to come talk to us about how they felt about the health of the plan and the options available to the plan going forward as part of that project.

We also receive lots of information about our members and employers from Celine's team. And as you know, they interact with you through a variety of ways each and every day. And that information is also taken into consideration as we make decisions on your behalf. And all of these views are factored into decisions and discussions in our boardroom and the need to strike the best balance we can.

The continued financial strength of the plan for the decades to come. You've heard that said by everyone so far in their presentations. It's also about getting the right balance. This illustration shows how pensions are funded for you, as well as the pensions for the future members for decades and decades to come. It looks pretty simple when you first look at it, five elements. And then you realize that four of the five elements are about the future and we have no crystal ball. Nobody knows what the future may entail, it's uncertain.

And making this formula work requires a lot of important and often complex decision making by both AC and SC. The good news is all of you in the room and listening virtually can relax because you don't have to worry about it, that's our job. We look after the pension for you so you don't have to. It's one of the benefits, as Celine said, of having a large defined benefit pension plan like OMERS, that's managed by experienced purpose-driven people whose focus is to secure your pension future.

You heard Barry remark that the SC board concluded in 2023, that we will remain on our current path to building reserves in the plan as it continues to mature, to make sure the plan is strong for years and years to come. What does the current path actually mean? It means that we will use favorable investment and demographic experience in future years to improve our funded status, as Jonathan indicated, and help build additional buffers in the plan to provide that additional benefit security, that you all deserve in the future.

It means that we are delivering today, while securing delivery of our promise for tomorrow. Our job at the SC is to continually monitor the plan and address any risks and opportunities that may arise to ensure we continue delivering for decades to come. Our ongoing work at SC really is focused on four key areas.

First, we make decisions about benefits and contributions with a deep understanding of the needs and different perspectives of our diverse membership. Second, we look to the future to protect the long-term health of the plan over time. And third, we support our sponsors during board appointment processes to optimize their contribution to the success of OMERS bicameral governance model. And finally, we make sure we have the necessary documentation and processes to support continued strong governance.

Together, we are all committed to delivering our promise to you, that is a sustainable, affordable, and meaningful pension plan for the long term. I'd like to take this opportunity before wrapping up to thank the SC board members, a team of 14 people who bring passion for all of you and an extraordinary amount of care and diligence into the boardroom. I'd also like to thank the SC team and all of those at AC who help us in delivering on our mandate.

I'd like to thank our sponsors and stakeholders for their continued dedication and time in helping contribute to the success of OMERS through their nomination and appointment processes to our two boards, as well as helping us stay informed of the needs and perspectives of all we serve. And finally, I would also like to express our sincere gratitude to all of you in this room and virtually and those who couldn't join us today, for what you do, have done, and will continue to do in serving the people of Ontario. We appreciate you.

And now I'd like to pass the podium back to George Cooke, who will moderate our question-and-answer period. Thank you very much.

(audience applauds)

So, I'm back. There's a microphone over here to my right, microphone over here to our left. Again, the people online, I'm told, have been sending questions in as the discussion has taken place. Apparently one of the most frequently asked questions is, how do I get tickets to the Maple Leafs? Being a lifelong Montreal Canadian fan, I could answer that in probably a very different way than many of you would. But, it's not really a question I'm going to pose to the panel.

Celine, when she was speaking, identified a number of the people on her team that are in the crowd. If your question is about a personal circumstance, I ask that you find one of the people from plan administration and pose it there. You'll get a much better answer, and everybody else won't be asleep while it's being done. So, if we can try to keep the questions general in nature, we could move forward. And I'm ready to start whenever somebody comes to a microphone. Thanks. Gentleman over here, please.

Thank you and good morning. My name's James Watson. I'm president of CUPE Local 503, City of Ottawa. And my question is for the Sponsors Corporation. The SC recently concluded its plan risk assessment, concluding that no changes were necessary to the plan. This was a good outcome for OMER's members, but we remain deeply concerned about the fact that this decision was reached behind closed doors at the SC due to the SC's confidentiality policies. We as members don't know what the plan changes that were being examined, what your actuarial modeling said, or what the assumption was based on. So consultation behind rigid confidentiality policies is not a substitute for real direct voice at OMERS. Will the SC work with sponsors to revisit its restrictive confidential policies?

(audience applauds)

We always, as far is my mic on? We always try to strike a balance in our work between engaging with and consulting with our community, our sponsors and our stakeholders, and also recognizing that some of the work we do, because it isn't ready for disclosure yet, has to be conducted at the board table. Through the plan risk assessment, as Laurie mentioned, I think as I mentioned, we met with all of the stakeholders and sponsors who wished to meet with us, to engage with them in the process, to hear their views and hear their perspectives. So, we try to strike the balance. I hear from your question that from your view, we don't always get it right. I think you're probably right about that. All we can do is try to work harder to get that balance better.

Good morning. My name is Daniela Melo. I am a child and youth worker for the Toronto District School Board. I am here with my OSSTF group, and the question I have is for the corporations committee. There has been a lot of news coverage about re-employment rules for another major education plan here in Ontario. Is OMERS contemplating a similar rule for OMERS members in which similar re-employment rules would apply?

Mic please. Oh, I'm on. Great. Thank you for your question. At this time, we are not considering any amendments such as the one at the other plan that you refer to. But we do have rules around retirement and reemployment. And if Celine would like to provide just a short summary for that, that would be great. Thank you.

Sure, we're very different than the Ontario Teachers' Pension Plan.

I mean that we have 1,000 different employers and so we don't have the same rules that they do. Essentially, if you are a retired member, So, there's been a bonafide break and you're retired, and you decide to go back to the municipal workforce or the school board sector or other local boards, you can do that. But you would need to suspend your pension in order to re-contribute. Or if you decide to keep accessing your pension, you would not contribute to the pension plan. So very, very different rules. And I'm happy to drop by your table and give you some more detail after.

[Daniela Melo] Thank you.

Let's go to the next lady here please.

Hi, my name is Bobbi Piccolo. I'm from Thunder Bay, an OSSTF member in the education sector. My question is, we have seen the overwhelming uptake of non-full-time members joining the OMERS pension plan. Is OMERS contemplating making enrollment in the plan mandatory?

[Laurie Hutchinson] Do you want me to do that one?

[George Cooke] Sure.

Mic, again. Great. Thank you again for your question. Yes, we've been very pleased to see the number of enrollments from our non full-time employees because everyone up here believes that everyone deserves a defined benefit pension plan. So, it's the enrollment numbers were actually higher than we expected, and we are pleased to see that. At this time, our board has decided that this is a very new provision. And we are going to wait until we have a couple of years of experience with the provision to see how it's performing. And we have planned to do another review of the NFT provisions and plan rules in a couple of years time.

I'm going to go to some online questions here. I get to look at these in advance. So, I'll give the SC a break for a minute. This is from Rebecca. She says, "I'm a mom, climate change professional, and an OMERS member. It's great to see OMERS taking the climate crisis seriously. What is OMERS's position on investment in oil and gas as the climate crisis intensifies?"

So, I'm happy to take that, George. And look, Canada's economy, as you know, is largely based in oil and gas. I think 10% of the Canadian dollar, in one way or another, is affected by those commodities. We have been incredibly selective as to where we invest in that space. It's primarily in some key equities that are among the best, most sustainable, most thoughtful Canadian-based enterprises. They happen to be doing very well for your portfolio. They happen to be organizations with a sustainability plan that's well articulated and well regarded by the investment community. We've often been asked, would we stop investing in that space? Never is a, you know, word that you don't tend to use. And the future, one never knows. But I would say today we're very thoughtful.

We put a really, in every investment committee meeting, over what makes sense for you reputationally and otherwise. And right now it's a space that we have a small position on. We're not thinking about taking it off the table because of bigger features. But we'll always contemplate that in the future as the world changes. - Got another one for you, Blake. And this is from Mark. "Having not yet met your 7% benchmark for 2 years, are you going to try to sell some of your office real estate properties that are losing money?” - So listen, as I said earlier, Oxford, over a sustained period of time, you'd put their record against the best businesses in the world. Since COVID, it's had a tough time, right? We had legislators shut down our malls. The office environment, as you know, has changed dramatically. And it's a living organism, Oxford. We are always constantly rolling in and changing and getting in the way of the best tailwinds and getting out of the way of the worst headwinds. And the truth is, I think in 2010, about 55% of our portfolio is office. Today it's less than 20%, and the assets we have are the very, very best in the cities in which we choose to invest. And so, when you read the headlines, you would think that office of every asset class was in deep trouble. It's just not true. Great office assets are doing actually very well. Secondary and tertiary office assets aren't. You own great assets. So, we've gone from 50 to 55% of the portfolio to office to roughly 20. The direction of travel is fewer. But it is still a great business for you. Our occupancy is significantly higher than average. Don't always read the headlines because we've made a lot of money in that business for you in the past. We'll continue to make money for you in that business in the future, but only focusing on truly great assets and selling out our Bs and Cs and the likes, which is what we've been doing. - Gentleman to my right, please. - Hi there. My name's Keith Fiering. I'm with CUPE Local 79, first vice president. We represent over 30,000 members in the city of Toronto Bridgepoint Hospital and Toronto Community Housing Corporation. One of our concerns is that when we communicate to our members around OMERS, what we have to communicate to them about is that certain cuts aren't taking place. This comes after your comprehensive plan review or your plan risk assessment. And the messaging that is always going back is these cuts aren't taking place. And what's being set up is that your pension is looking at cuts again, cuts here, cuts there, in various ways to make your pension sustainable. What we're concerned about is benefits. And we've seen some comparisons earlier about how we're performing against the market in general. But what we'd like to understand is how we're performing against other pensions and the benefits they're providing. So we know that the accrual rate, for example, HOOPP, is 15% higher than what ours is.

And we also understand that they've increased that by 25%. What we want to know is, when are we going to turn the page on cuts and look at benefits that are better for our members, especially given that now we're moving into part-time enrollment? And how's it going to be better for them? When are we going to start looking at benefits as opposed to just hearing about cuts, cuts, cuts, proposed cuts, maybe a cut down the road, because we're extended to 2025, or I forget what the actual year is? When are we going to be looking at that as opposed to takeaways?

(audience applauds)

My gut tells me there's going to be more than one person who wants to respond to this. But do you want to start, Laurie?

Sure. I'll take that. Thank you again for your question. You saw one of the charts that Jonathan provided, that we are on an upward trajectory in improving the financial health of the plan, not only for today. Today it's very secure. As you saw in the slides today, we have $130 billion and a $6 billion a year pension payroll. So the plan is very secure today. But what we need to do, and what our focus is, is on making sure that that security is good well into the future as the plan continues to mature and becomes a little less resilient in dealing with adverse experience. We are on a path. We've been on it. We've made good progress. And I think everyone up here would agree that we are committed to continuing to strengthen that robustness of our long-term financial health. And at that time we will be able to take a look at things, such as, what the other plans are doing, who are already at that secure financial position in terms of benefit improvements. - Anybody else want in? - Nope. - No? - No. - Okay. - [Keith Fiering] Thank you. - Thank you. - Thank you. - Please.

Good morning and thank you for the presentations today. My name is Melodie Gondek. And I'm an education worker from Ottawa. And our question is for the Sponsors Corporation. Although members may take the value of pensions out of the plan before early retirement, there are currently no time limits in commuting pensions, including taking the commuted value the day before early retirement. This potentially has implications for the overall health of the plan. Would OMERS contemplate creating parameters around when the members can commute their pension? Thank you. - Thanks. I understand last year, it was my very first annual meeting on the stage and I got a free pass because I had no questions. But thank you again for your question about the plan design.

(Blake Hutcheson) Welcome, Laurie.

(Laurie laughs)

In respect of commuted values, currently the way we administer the plan is in strict compliance with the Pension Benefits Act. And under the provincial legislation, Members have an option if they terminate employment to elect to receive the commuted value of their pension up and until the first day that they are eligible to retire from the plan. So that's not age, your normal retirement age. That's the first date that you are eligible to retire from the plan. And the calculation of that is driven again by statute. So right now we administer the plan in accordance with the act and our legislative requirements.

Okay, thank you. Mark, I think we're over to you.

Thanks, George. My question is for Celine. First of all, Celine, thanks for the presentation today. And I'm really interested to learn more about how it's going to be easier, particularly for our women, to purchase back time when they've, you know, lost time for mat leave. I think that's something I know it's going to have an impact on us. And today, just we happen to be, I happen to be sitting with two of our colleagues from the TPS, who received the OMERS email and thought, "Hey, I'm going to come to this annual meeting to learn some more." And it really got me thinking about, how can we arrange to get more information out to our members and perhaps a session for our members in order to help them in assist and preparing for retirement in the future?

Thank you, Mark. I mean, first of all, thank you, and like towards you and the PAOL, for always allowing us the opportunity to come out and speak to members about a diverse range of issues. So I would say we're happy to come out. We are, again, looking at the regional sessions we do today. We are modernizing them so that people can more holistically prepare for their retirement. And we are starting to campaign and really focus on education in the sector and the impact of taking leaves of absences and how it's much more affordable and beneficial for people to purchase it earlier on than later on. So I would say to you and to all of our sponsors and stakeholders and employers in the room, you know, get us together with you, I think, the collective power and messaging and education is always the best approach. And so we're happy to come out to your places of work and to your organizations and share that information.

Fred?

Thanks. Fred from CUPE. I want to thank Blake for addressing the Tim's Water question that I had asked in the stakeholders meeting. But I did want to circle back for just a minute. While I appreciate it is a relatively small investment, for us, for our unit, it represents a concern that we have in the reality that our plant is invested in, you know, infrastructure that is necessary. We're talking about water and wastewater that is operated, the people of London, Thames is their singular access to these services. It does a little bit of digging to see that it would appear that investors were trying to press the regulator to allow for a 40% increase in water rates. And so I need to understand if our plan thought it was a good idea to push for a 40% increase in water, which is a necessity of life. You know, that doesn't seem to make good sense to me. I also think there's a real reputational risk here in these kinds of assets that we are invested in, not just in London, but around the globe. And so I wonder if there is, what are the concrete steps that people are taking to consider the risk assessment mechanisms in terms of investing in these kind of infrastructure projects, particularly ones that are necessary for life.

Yeah. So thank you, Fred. So a little bit of the history. Margaret Thatcher, as many of you will recall, nationalized many services. This happened to be one of them. And it was privatized. It went from nationalized to privatized. And it was put on

Out to the community in an ownership situation. And when this happens, what happens is a regulator that's set up. And it says, if it's going to be owned by private citizens or investors, you need to have a point of contact where incremental investments are consistent with what the regulator will permit, which will give the owner enough of a return to keep investing in those assets. That's the nature of the relationship. It's not like we walked in and said, "Maybe you should nationalize something." It's been nationalized for now decades. And it's had owners prior to our ownership.

We went in, in good faith, to take ownership of an asset that should be a very good investible asset for you on a go-forward basis with nine of the other, I think, smartest investors and infrastructure in the world, including as I say, the biggest pension plan in the UK, which is just wise by the way, because you should wrap yourself in with a team of people who have deep influence, especially in the nation state in which you're doing these things. And what happens is, when you inherit this infrastructure, you didn't start it, you didn't build it, it will have issues.

This particular water system has had significant issues requiring, as I say, more than $5 billion of additional equity to invest in it, to keep it safe for the 15,000 customers. And so then what happens is the regulator says, "Invest please. We need this." And by the way, we should. We have to look after our customers. But we're not prepared to give you an adequate return because it may result in higher rates. And so for us, the best opportunity is to try to get a fair deal. And you know this, Fred. You bargain all the time. We have tried for over a year to get a fair deal. And, you know, a week ago, all nine of us put our pens down and said, "What you're offering us is not fair for an adequate return on a go-forward basis."

The 40% you flash is an interesting number. Don't always believe the facts. There are a number of other water and utility entities in the UK that are significantly higher than that by the way.

And what a lot of nations do is say, rather than pass the exact cost so that the investor can get a return through, they'll subsidize that cost, or they'll find other ways to cushion that cost, which the government has the right to do. So when the headline says, you know, big owners want a 40% increase, the truth is that could be bled in over time by the governments of the day so it's fair and reasonable. And many of the utilities are much higher ones than that. And so it's an interesting headline, but there are ways to soften the blow to the consumer, and at the same time properly invest in the water system because I agree with you, people deserve that right.

And so I think those are the thoughts, the philosophy about whether or not we should invest in certain assets when we don't solicit assets to be monetized or to be privatized. When they're available, and we can get a terrific return for you, we have been in that business now for over 50 years. It's been among the best businesses we have. Bruce Powers is a very good example of a utility that we're invested in, that has been our single biggest equity and has done extraordinarily well for OMERS over time. And that is one of the, you know, private businesses we have that pays pensions.

And so that's hopefully helpful, Fred, with a little bit of the history, how it works, why that 40% shouldn't necessarily be taken at face value. And as I say, this isn't over. It might be over. It might be that we can't engage with either the government or the regulator, and walk away. I think, on behalf of the pension plan, you would, sooner we do that, than put up hundreds of millions of dollars of your money with little or no return. And you're right. It is reputationally a concern for us. And we are doing everything we can, along with the other eight investors, to make sure that people know where the blame sits and to jealously protect our reputation, 'cause that's all we have in life.

I'll also say, you know, because we have 30 assets in our infrastructure business, at any given time, 25 are doing great, and 4 or 5 are going to cause us some trouble. And is the nature of large investors. I'm sorry that this happens to be one of those at this particular time. It's certainly the one that's getting the most attention. And I can't say that, in the future, it won't be something else. That's just the nature of big investors. But we're doing our best to be fair and reasonable. We have all the way through. I think we can hold our head high that we've been fair and reasonable. And we'll continue to be, 'cause our reputation matters. And as I say, it's a diminished, you know, a very small relative to the book piece of our equity. But we will do our best to preserve it and protect it.

Please.

Hi there. I'm Aimee Carnell. I'm the vice president, chief steward at Local 79. Earlier Keith let you know that we have over 30,000 members in our bargaining unit, at our union. Over 16,000 employees are part-time. Part-time is growing in our union. It is not shrinking. Our full-timers are shrinking. I heard earlier that you had 45,000 members opt in. But we had a meeting with the City of Toronto where they told us that the enrollment was low with our part-timers. So I'd like to know your educational plan, your short term, your long term, and how you're going to sustain this plan knowing that part-timers are growing in this industry and not shrinking.

Why don't I take this? So when the Sponsors Corporation made the decision to open up the plan to all non-full-time employees, we actually had the privilege of connecting directly with many of our sponsors and stakeholders. So we met with CUPE and with OSSTF, and many others, to really try and understand how do we simplify the value of the defined benefit model. What we know about non full-time employees is overall, again I'm making some averages here, but generally speaking, they're younger than our average full-time member. And they do very diverse roles. And so it's really important that we educate them. I go back to sort of the statement that I've said earlier to Mark. The more that we can do collaboratively together to educate people on the value of the plan over time, we have to do it. And so what we've done so far, we have a dedicated page on our website, a lot of information about the value of enrolling in the plan over the long term. And so we need to get people to think about making choices today that will benefit them over the long term. And look, it's not easy. Right? Like right now cost of living is really, really high. And so when the individual is looking at what comes off of their paycheck versus the long term value, it's important that we just continue to educate them as best we can. And so this year I talked about the Pension Blueprint. We will have an episode that focuses more about why more individuals should have access to the defined benefit plan. I think the more that we can work with CUPE Local 79, I know not all non full-time employees are the same. And so we need to work collaboratively together. We need to continue to educate and talk about the value of this plan. And we need individual members to trust and believe that this plan is going to be there in the future, to pay their retirement for life. So I don't have the overall solution, but I know that together we can continue to educate.

I don't like seeing people standing here. I'll take this question, and then I'm going to go to the ones online.

Good morning, George and everyone. Bill Harford from the Municipal Retirees, past president. I just wanted to let you know that one, we held a coffee shop and it had to do with environment. And one of the groups that we had was shift who gave good marks towards the OMERS for your investment in environment. And then we had also speakers about that favorite tax called carbon tax. But what I wanted to point out is that retirees are really quite interested in our investments into environmental things. And my question is, does OMERS have experts that can come out and talk to our small groups about how we are investing in that area and what kind of process or environmental improvements it will be providing us into the future?

Thank you.

I'm going to give you the quick answer and say it's yes. But you may want to elaborate.

No, thank you, Bill. Nice to see you. Nice to see you well. Michael Kelly's in this front table. He is not only our Chief Legal Officer, but Chief Sustainability Officer, has built a terrific team around him, has really been the torch bearer for us, in making sure we get this right over the last four or five years. He and his team would be happy to come and see you. They would be happy to sit down with you. They would share where we're headed in terms of our diminution in carbon footprint goals, where we are benchmarking against it, the kinds of investments we are ambitious to be part of, with a goal of about $30 billion of the plan in green assets on a go-forward basis. And so, he would be your best running mate. He's here. We can get you together after and he would be happy to meet you wherever your coffee team want to meet.

[Bill Harford] Perfect.

Jonathan, you've been getting off easy. This is from, I think it's Henan if I can read the writing. "Is OMERS still bullish on credit investments given reports of business defaulting on paying back their loans?"

The answer, my mic on? Yeah. So, credit, as I mentioned, has been a significant area where we've seen opportunity. We have a terrific team under the leadership of Kal Patel who reports to Ralph Berg, our Chief Investment Officer. The team is very skilled at being able to evaluate the risk. The economy is starting to show a few cracks, particularly in the United States. We think that the diversification that we have and the policies that we have in underwriting will serve us well. And so, yes, this is an asset class that we continue to find attractive if interest rates start to come down a little bit, a little bit less attractive, but there's still a good runway in this area for OMERS to earn good returns going forward.

And historically, our default ratio has been a fraction of 1%. Where you're going to see defaults come up would be Middle American banks with Middle American assets, particularly some real estate assets. You will see the default rates go up. That's not the kind of investment we do. We invest in the highest quality infrastructure, private businesses, real estate.

"So it's right to be aware of it and our underwriting is more conservative than it has been. But to Jonathan's point, it's still a great business for you and we're optimistic, we're getting this right. - Jonathan, I've got another question for you. This one comes from Mark. "At what level of fund status is OMERS deemed to be fully funded? Is it 100% or 105%, et cetera?" - Well, that really depends on the discount rate you pick. Blake put out a chart earlier about our 2030 strategy and the 1, 2, 3, 4. I was adamant in my role as Chief Strategy Officer that we put a big plus behind the 100. But one of the things which our colleagues at the Sponsors Corporation do is establish a funding management strategy. Laurie, I know that you've got some work on that. I've always said that 100 is not enough. We need to build a substantial buffer. Mark, I don't think it's 105, it's probably a little bit more than 105. I would like to see it personally at 110. As Blake said, if we get that 5% real rate of return going forward we can see a path there at the current discount rate over the foreseeable future. And I think we should have high ambitions to build those buffers for OMERS. - Just a time check quickly for everybody's benefit. We've got about 13 minutes left, I'm going to go to the gentleman over here on my right, please. - Thanks. Thanks very much. Dhananjai Kohli from CUPE Ontario. During the course of today's presentations, we saw, both in the videos and in some of your folks' presentations, information about how OMERS has changed its investment strategies in response to the climate catastrophe and in response to ESG principles that we've been seeing become more popular. Currently, OMERS is invested in companies, in multiple companies that either are directly involved in weapons manufacturing or that manufacture components of weapons, including about half a billion dollars in companies that are supplying weapons to the current conflict happening in Palestine. So, I was wondering, as part of its commitment to building a better world, if OMERS is considering divesting from weapons manufacturing. - Michael Kelly, do you want to answer that? - Yeah, yes. Thank you. Hi, Michael Kelly, Chief Legal and Sustainability Officer. We do have some restrictions around landmines and otherwise, in terms of our absolute no-go areas. I don't know the specific companies that you're referring to, but we could certainly talk about that. I would imagine they might be in our public equity book and probably very small stakes of large companies, but, again, something to talk about. But we do have a process where we would think about what kinds of companies we would put on an absolute no-investment list. And we do keep them at a minimum. Whenever you, you know, restrict your investing universe, is going to affect your return. Now, obviously something like these issues are critical. So again, we have restrictions on landmines and other things like that. We have restrictions on tobacco as well. So, we can look at that, for sure. But all our assets do go through an E&S energy filter as Blake said. So, you know, under the S factor, we would look at things like community relations, and supply chains, and use of product, et cetera. So, there is definitely a filter that these go through, whether you sometimes get a huge conglomerate that has, you know, some component of its division, that's a difficult thing." But obviously we would look at it.

Som I'd be happy to talk to you about specific companies that you seem to have in mind for sure. But thank you for your question. I think it would be helpful because those statements are big and powerful, and I actually don't know which companies that in your mind you think are focused there or the size of our investment. So, I think rather than accept that statement at face value, I think you should meet with Michael, sit down, share the story, take it offline. And I think, I'm quite certain we're going to be able to satisfy you. Okay?

Would you like a response just to that, just quickly- Sure, please. Happy to provide that information. We've got at least three companies that we've been able to find and happy to engage in that conversation. - [Blake Hutcheson] Thank you.

Please. Good morning. Blake, I'm going to lob an easy one for you. We've all had the opportunity this morning to, I'm sorry, Dan VanderLelie, with the Burlington Professional Firefighters Association. We've all had the opportunity to see the numbers, to see what you expect, where you see OMERS growth, and what have you, and where we can do better. But I also think it's important for us to get a better understanding of our leader and a better understanding of where your head's at.

So aside from the Toronto Maple Leafs winning the Stanley Cup, what's keeping you up at night?

That's an easy one. How long do we have, George?

[George Cooke] You got about nine minutes, please.

Yeah, you know what, what honestly keeps me up at night is a promise is a promise.

So, we live with that every night we go to bed. And, you know, I think it's really easy to make money one year in a row and really easy to have a bad year one year in a row. Every move we make is trying to think down the road, long term, how do we make this as sustainable as possible 2 years, 5 years, 10 years, and 15 years from now? And sometimes you have to endure short-term decisions in order to plant seeds to unlock what I think will be extraordinary for you in the future.

So, from an investment standpoint, it's remaining focused on the long term, recognizing that the responsibility we have is not an option. It's not a goal. It is a firm responsibility to meet the promise. So, I worry about that. And I particularly, when short term, sometimes short term spends will affect your current P&L, but you just know long term, it's in the best interest of the plan.

The other thing I worry about is they're always people issues. They're always somebody's sick or somebody's having mental health issues, or, you know, teams have dynamic issues, and the people in our organization are our most important assets. And the calls that break your heart at night are those sorts of calls. They keep you up at night. And we're fortunate to have a great HR team that gets our arms around them. But those are, you know, a deals, you know, a deal comes and goes. And when I really know we've underwritten, that doesn't keep me up at night. But when people are broken, that's often harder. That's how I feel. Yep.

Please.

Hi, my name's Krista. I've been a plan member since I was 18. I'm 30 now. So, bear with me. This is the first time speaking at the mic here. I have a question around compensation. So, compensation for those inside OMERS has increased significantly. CAO compensation is up 12% largely due to a new bonus program that was introduced. SC and AC director compensation is up again, by similar amounts.

This all is farther than the increases OMERS members receive with indexation or salary increases that like I would even get as an OMERS active plan member right now. And it's not an anomaly. It's happened the last couple of years. The raises are increasing way faster than the OMERS plan pension members. So, for me and my membership of 200 people where we're struggling to keep up with the cost of living ourselves, looking forward, how does OMERS anticipate these trends will continue? And if so, how would you explain to OMERS members who continue to face austerity at the bargaining tables?

George. Perhaps, I can deal with the board compensation. And I'll let you deal with the executive compensation. So, (coughs). Excuse me. What I can tell you about board compensation is, I think I said in my remarks, the SC board is responsible for the compensation of both boards. The last time the compensation for the board members was adjusted was in January, 2023. I think that was reported in our Annual Report, and that was the first change since 2020. And that change, what came about through the process we always use, which is we engage with experts in the field who survey the marketplace, who produce lists of benchmarks, appropriate comparators, so that we can make a decision on board compensation to try to arrive at a level that is fair and competitive so that we can continue to attract and retain the qualified board members that we seek. But also being mindful that for all of us, being members of these boards is a privilege and something that cannot, you know, be reflected in compensation. There was no change to board compensation this year in 2024.

George, do you want to speak to the...

Let me take a shot at the broader question related to OMERS. First of all, a lot of the businesses that we're involved in are very complex. But regardless of that, we benchmark against other entities that are operating in similar spaces and do so both with internal resources and external independent resources so that we're certain that the comparisons that we're seeing are reasonable and fair.

I think, it should be obvious at least, that in order to be able to be successful, we have to attract people with the skill sets in the markets in which we're otherwise employing those people. And so, we have a very deliberate process that's reviewed by the HR Committee of our board. The various structures that drive compensation are approved by the HR Committee. The senior executive are reviewed by HR. The CEO's performance is approved by the board. There's a very detailed section in our Annual Report that sets this out. And I would suggest to you that our practices are extremely comparable and consistent with what the other Maple Eight plans are doing and other entities involved in the type of activity worldwide that we are. And part of the trick to financial success is both asset and geographic diversification. Some of our people will be paid the going rates in New York or London, or for that matter, Australia. Some will be paid from Canada, where the resident, where the activities are taking place. I'm not suggesting it's a simple process. But I am suggesting that it's one that is undertaken with a great deal of diligence and then independently reviewed. Now I want to translate that back to the situation that you've identified because I am empathetic to the situation that you're discussing. The solution, however, to the comparison, I think, is not to underpay our people and hence underperform. And, I should say, I should have pointed out, all of our people have performance-related criteria built into their constructures. And so, they have to perform in order to receive. The solution to your problem isn't to underpay our people, too. There's a different problem that I can't address. What I can say to you with great comfort is I'm very comfortable that all of the salary approach in OMERS has been incredibly diligently reviewed. Again, we have independent external consultants that come in, whose job it is, is to make sure that we are seeing and understanding what is going on. I hope that's helpful. - No. I appreciate it. The struggle I'm having though is with less than full-time workers who are choosing not to buy in because they're taking the money that would be paid to OMERS and using it for everyday expenses. So for me, it's a tough argument to get them to buy into the plan when they need that money for other things. So, I just thank you for answering it.

[George Cooke] Okay. Please.

Hi, my name is Tina Faibish. I'm an OMERS member from an OPSEU member. And I just wanted to touch upon and revisit the question that was proposed by one of my brothers from CUPE. And I just want to bring forward some information that was missing. So according to some research, OMERS has investments of approximately $462 million in three companies supplying weapons or component parts of weapons to the Israeli military. And those companies are Alphabet, Chevron, and Honeywell, and Honeywell being the most egregious as they're directly supplying Israeli war crimes, and workers' investments should not be going to arming genocide. And I'd like to know is, why are our retirement savings helping to finance the war in Israel? And will OMERS make a commitment to divest?

Again, we can take it offline. So Alphabet's a good example. That's the parent company to Google. It's been one of the best performing stocks in the world. You know, I suppose if someone to extract out the hundreds of thousands of businesses they're in and the billions of dollars, they might find something. It seems that that's been the exercise. But, again, it's very hard when you take one of the biggest public companies in the world, it's one of the best performers in the world. And I'm sure you've done, somebody's done the analysis and says, "Okay, this is where the money's going." It's probably an infinitesimal amount of the business that they are doing. We will do more homework, Michael Kelly. But, again, is that we are certainly not choosing Alphabet, because we think they're doing all the things you've suggested. We're choosing Alphabet because it's one of the most extraordinary businesses operating in 200 countries in multiple spaces around the world. And that may be part of it. That's the first time I've been aware of that. But I think we again can take it offline. And, Michael, you can do some further homework.

[Tina Faibish] And what about the commitment that (indistinct)?

So, you're asking us to sell out of Alphabet because somebody is determined somewhere in their organization. I think we have to go do a lot more homework before we make that kind of a commitment, frankly.

I am going to... I'm sorry, I didn't see this lady here. We're actually over time. But we're going to take this question. I've got one more from online, and then we're going to conclude. So please go ahead.

Yes. Thank you all for coming today, I am very happy to be here. I'm from Brampton, so I took an Uber to get here, I didn't care, I just wanted to be here. (all laughs) Anyhow, I wanted to say that I'm very happy with OMERS and what they're doing and your team. I'm very happy to be part of this. And I'm an early childhood educator with the Peel District School Board, so, I'm very happy to be here. And I just was so excited. And my colleagues, they love OMERS. They're very happy. We are very pleased to be in a good place and we are happy to know that you're taking care of us. And thank you so much for doing such a wonderful job. Thank you. - [George Cooke] Thank you.

(audience applauds)

George, can I just say come and visit us at the booth outside, and we will arrange to get you home.

(audience applauds)

So, this is the time that the chair gets to call an audible. We'll answer the rest of the questions online in some of our member newsletters as we go forward. I can't think of a better way to end this session than the way you just offered up to us. So, thank you very much for your kind remarks. - [Laurie Hutchinson] Thank you. Thank you very much to the panel. Thank you very much to all of you that posed questions. I look forward to a year from now, more or less being back in this room and having an opportunity to present our results from 2024, which I'm sure will be a very good thing to do. So, we don't have an exact date, but we will get it soon so it gets in people's calendars. And with that, I'll say thank you very much to all for your participation over the last couple of hours.