Ontario amendment to Teachers' Pension Act shows foresight
TORONTO - "The Ontario government's proposed amendment to the Teachers' Pension Act represents an encouraging step forward towards pension reform for thousands of Ontarians," said Jim Leech, President and CEO of the Ontario Teachers' Pension Plan (Teachers'). The amendment was introduced as part of the Ontario government's 2009 budget.
"This move would allow us to help smaller pension plans and other institutions meet their beneficiaries' needs," he said. "We could pool significantly large amounts of capital and make our resources, such as our direct investing expertise, available to manage their funds. Their beneficiaries would benefit in gaining expertise, scope and scale.
"Importantly," he added, "we also could offer our pension administration services to others – service that's rated first in the world among its peers." Teachers' manages one of the biggest payrolls in the country, paying out $4.2 billion to 111,000 pensioners annually.
"Our plan would benefit in having a larger capital pool available to invest," said Mr. Leech. "It would be a win for our pension plan members and our sponsors, as well as for those of any other fund on whose behalf we might act."
He also noted: "The Ontario government should be commended for its foresight and quick action on this recommendation by the Expert Commission on Pensions lead by Dr. Harry Arthurs." The commission's report states that the cumulative effect of the several advantages that large plans have over small plans is extremely significant. These include lower investment fees, in-house investment expertise, private placement capabilities, ability to spread investment risk through diversification, reduced administrative unit costs, and enhanced availability of education, information and service.
The Ontario Teachers' Federation, which jointly sponsors the pension plan with the Ontario government, also has expressed its support for the benefits the amendment offers its members.
The Ontario Teachers' Pension Plan is the largest single-profession pension plan in Canada. An independent organization, it invests the pension fund's assets and administers the pensions of 284,000 active and retired teachers in Ontario.
Director, Communications and Media Relations
Ontario Teachers' Pension Plan