MEPCO Member Newsletter - May 2020
MEPCO Board report: May 2020
What’s new at OMERS
OMERS hosted its 2020 Annual Meeting on April 8, held entirely online via webcast. Blake Hutcheson, OMERS President, told the more than 600 members who logged in to the meeting, how OMERS is contributing to the fight against COVID-19 and provided an update on key strategic initiatives. Mr Hutchison will take over as OMERS Administration Corporation CEO on June 1, 2020, replacing Michael Latimer. Members who did not attend the virtual meeting can watch a recording on the OMERS website.
OMERS Plan performance in the spotlight
At the May 11 MEPCO Board meeting, which was also held remotely due to COVID-19, the Board heard from representatives of both the OMERS Sponsors Corporation (SC) and Administration Corporation (AC) Boards. This included a discussion about proposed OMERS Plan design changes with SC CEO Michael Rolland, and a discussion with OMERS President and incoming AC CEO Blake Hutcheson. COVID-19 and its impact on global financial markets was covered in the discussion with Mr Hutcheson.
Clearly, the uncertainty around COVID-19 will be of concern to all OMERS Plan members and employers. MEPCO is committed to ensuring AMO appointees on the AC and SC Boards continue to have the resources and support they require to carry out their responsibilities, fully informed of municipal priorities. It remains a key goal of MEPCO to ensure that both Boards benefit from the understanding of municipalities that our representatives provide.
Latest on proposed Plan design changes
MEPCO and AMO staff have continued conversations on the two proposed Plan changes due to be voted on by the OMERS Sponsor Corporation (SC) Board in June 2020. The changes involve Shared Risk Indexing and the Inclusion of Non-Full Time Employees in the Plan.
If approved, shared risk Indexing would mean that the SC Board, based on its annual assessment of the Plan’s health and viability, would have the authority to reduce future inflation increases on benefits earned after December 31, 2022. The concept behind this proposed plan change is that risk would be shared across a larger pool of members. This approach is intended to support the long-term financial sustainability of the plan and is supported by the MEPCO Board.
In terms of Non-Full-time Expansion, the proposed change would open the Plan to all non-full time employees of OMERS employers. Those not currently eligible to enroll in OMERS, including part time and seasonal workers, would be eligible if the change is approved. Enrolment for these employees would be on an opt-in basis. In the previous MEPCO newsletter, it was estimated that the impact on municipal employers if this change were approved would be up to $135 million annually if every eligible employee joined the plan (which is not anticipated) – or $13.5 million for every 10% who opt in. Following discussions with OMERS staff, this figure has been revised, with the new cost impact estimated at up to $97 million for 100% opt-in – essentially $1 million for every 1% of newly eligible, non-full-time employees who choose to join. The revised costing information has been shared with other employer organizations. The MEPCO Board’s concerns over the impact of this proposed change remain, and this proposed change is not supported by the Board.
More details on the proposed changes can be found on the OMERS website.
Board Activities and Highlights from May 2020 Board Meeting
- OMERS leadership will be invited to provide an up-date at the 2020 AMO Conference
- Board approved MEPCO’s audited 2019 Financial Statements
- Updates from OMERS SC and AC directors presented to MEPCO Board
- Next Board meeting is set for September 14