MEPCO Member Newsletter - January 2021
MEPCO's work in 2020
2020 was a year like no other. The COVID-19 pandemic rocked global markets, highlighting the importance of sustainability for OMERS. MEPCO continues to support measures that will help the $100 billion Plan weather economic storms today and for the long term. Highlights of our work in 2020 include:
- Improving long-term sustainability by supporting Shared Risk Indexing. MEPCO has supported changes to Plan indexation for several years. The Shared Risk Indexing amendment passed in 2020 allows the Sponsors Corporation (SC) Board to reduce future inflation increases on benefits earned after December 31, 2022, if needed. This is a “sustainability lever” that can be used as needed and allows the impact of changes to indexation to be shared broadly across Plan members.
- Dealing with exceptional circumstances caused by COVID-19. The three measures requested by municipal employers to help manage COVID-19 related employment impacts were: 1) extending leave purchase deadlines; 2) reducing or eliminating the 36-month employment requirement for purchases of periods of reduced pay, and; 3) permitting temporary layoffs as purchasable service. All three of these measures were approved.
- Supporting strong governance by opposing potential changes to weighted voting at the Sponsors Corporation (SC) Board. As part of its routine review of Board composition and effectiveness, the SC considered discontinuing the practice of weighted voting – a change that MEPCO strongly opposed. Weighted voting provides employer groups with a level of influence over OMERS decisions that is in proportion to its level of Plan membership. Municipal employers represented by AMO account for nearly 40% of Plan members, resulting in two votes for each AMO appointee to the SC Board. Ultimately, the SC decided not to make changes to weighted voting.
- Ensuring strong representation for municipal employers on the OMERS Boards. MEPCO’s Board approved the re-appointment of two AMO representatives to OMERS: Marianne Love on the Sponsors Corporation and Michael Fenn on the Administration Corporation. Both representatives are experienced professionals and MEPCO is confident that they will continue to successfully fulfill their duties as municipal employer representatives to OMERS.
- Building sector alignment on OMERS issues. MEPCO works closely with other municipal associations such as Ontario Big City Mayors and the Municipal Finance Officers’ Association, as well as other OMERS employers to share information and build consensus on OMERS issues for our advocacy.
We need your support to continue this important work in 2021. If you have not done so already, we ask that you renew your MEPCO membership for 2021 to help ensure that the collective voice of municipal employers in Ontario is heard loud and clear. As COVID will impact markets through 2021 and beyond, it is more important than ever that MEPCO continue to support strong and effective OMERS governance and administration.
Employer and employee sponsors work together to oppose accounting changes
In December 2020 employer and employee sponsors, including AMO, CUPE and others, signed a joint letter to the Public Sector Accounting Board (PSAB) outlining concerns about the organization’s ongoing consultations.
PSAB is considering requiring public entities to report their share of a pension plan’s accrued benefit as a liability on financial statements. Plan sponsors believe that these changes are not appropriate for public sector pensions in Canada. They could increase volatility in public sector financial statements, lead to higher administrative costs and added complexity.
COVID-19 OMERS update
OMERS provides regular updates on how COVID-19 is impacting the Plan, including information on leaves and temporary layoffs. Updates for employers and members are available at www.omers.com.