TORONTO, July 6, 2016 /CNW/ - Further to the Government of Ontario's announcement earlier today, Ontario Pension Board (OPB), the administrator of the Ontario Public Service Pension Plan (the Plan) welcomes the creation of an asset pooling arrangement through the new Investment Management Corporation of Ontario (IMCO) Act which was proclaimed by the Ontario Government on July 1st.
The IMCO Act 2015 enables OPB, Workplace Safety and Insurance Board (WSIB) and other broader public sector entities to pool the management of their assets together through IMCO. OPB and WSIB will be the first two organizations to place their assets under IMCO's management.
"OPB's investment performance has been strong since it was established in 1990 to manage the Plan. In a global investment environment, scale can be an important contributor to consistently strong investment returns. We believe asset pooling will enhance our ability to invest directly in a broader array of high-quality opportunities and continue to generate strong returns over the long-term," said Mark Fuller, President and CEO of OPB.
IMCO, with an initial combined pool of approximately $50 billion of assets under management, will:
- achieve cost efficiencies through economies of scale;
- enable OPB to have access to top investment talent;
- enhance our investment decisions with strong research and risk management capabilities;
- greatly increase our ability to invest directly in a diverse range of high-quality opportunities; and
- help us realize higher risk-adjusted investment returns.
"These benefits together support the long-term sustainability of the Plan," said Fuller. "We believe the pooling strategy will benefit the financial status of the Plan and is in the best interests of the Plan beneficiaries and stakeholders."
While IMCO will be responsible for managing OPB's assets, OPB will continue to own its assets and maintain control over the strategic asset mix of the Plan. The Plan's assets and liabilities will remain separate from WSIB and any other clients of IMCO. OPB will continue to administer the Plan just as it does now.
The Board of Directors of IMCO was also announced today, marking an important milestone in the implementation of asset pooling.
David Leith has been appointed Chair of the Board and brings years of extensive experience in debt and equity markets, government finance, and M&A from his time with CIBC World Markets. He served in various executive positions at CIBC including Deputy Chair of CIBC World Markets' Investment, Corporate and Merchant Banking.
"OPB is pleased that two of its experienced Board members Vincenza Sera and Hugh Mackenzie have agreed to move from OPB's Board to join IMCO's Board. With their diverse backgrounds and extensive business experience, they will make strong contributions to the IMCO Board," said Fuller. "OPB fully supports the Government and WSIB appointments to the IMCO Board and we believe the governance structure is now in place to be able to successfully move the implementation of asset pooling forward."
"We are looking forward to continuing our partnership with WSIB and the Government of Ontario on the pooling initiative and to IMCO offering its services to other Ontario public sector investment portfolios," said Fuller.
IMCO is expected to be operational as an independent investment manager for its first clients, OPB and WSIB, by the first half of 2017.
For more information on asset pooling in our 2015 Annual Report, visit http://reports.opb.ca/2015/asset-pooling
Ontario Pension Board (OPB) administers Ontario's Public Service Pension Plan (PSPP), a defined benefit pension plan serving approximately 42,000 active members and their employers, as well as more than 42,000 retired and former members. With over $23 billion in net assets under management, the PSPP is one of Canada's largest pension plans. It's also one of Canada's oldest pension plans, successfully delivering the pension promise since the early 1920s. To learn more about OPB, visit www.opb.ca
SOURCE Ontario Pension Board
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