Dear OMERS Plan Member,
Today, CUPE Ontario released a comprehensive and third party verified report detailing the long-term underperformance of investments at the Ontario Municipal Employees Retirement System (OMERS) pension plan.
The report, Not Just One “Tough Year”: The Need for a Review of OMERS Investment Performance, revealed OMERS’ underperforming investments over a ten-year period compared to other large defined benefit pension plans and funds while also revealing that OMERS has failed to meet its own internal benchmarks over that same period.
CUPE Ontario believes plan members like you have the right to know why OMERS’ investments have, over a ten-year period, underperformed other large pension plans and funds. As the largest representative of workers in the plan, we are calling on OMERS to cooperate fully with an independent and transparent review of its investment performance conducted by Sponsors like CUPE and other unions representing plan members. To join us in that request, click here to send a message to OMERS.
Investment returns are a critical part of funding the pensions of front-line workers. We know defined benefit pension plans are the best and most efficient way for workers to make those invest and secure their income in retirement.
Our concern does not lie with the defined benefit model but with the long-term investment return record at OMERS, which falls well short of what it could be and what is being achieved by other large defined benefit pension plans and funds. Investment returns that are not what they could be can lead to increases in your contribution rate to the plan, and to more pressure to reduce the pension benefits you’ll earn in the future.
CUPE Ontario’s report was reviewed by Bradley Hough of PBI Actuarial Consulting. PBI’s review said:
“We conclude that the comparisons made by CUPE are reasonable and show that there is a significant gap in the performance between OMERS and other comparable public pension plans and funds. In our opinion, public information is unable to fully explain the performance gap. More information is required to truly understand why performance is so different between OMERS and comparable public pension plans and funds. In our opinion, the comparisons and analysis in the report support CUPE’s request for further review of performance.”
OMERS says its 2020 returns of -2.7%, which was a loss $3 billion, was a pandemic anomaly, despite other plans showing much better investment returns last year. As CUPE Ontario’s report details, OMERS’ 10-year returns compared to other plans, in periods both before and including 2020, show OMERS underperforming investment results are not a one-time thing.
The first step to fixing a problem is to admit you have one.
That’s why we are calling for OMERS to cooperate with an independent and transparent review of investment performance by Sponsors, like CUPE Ontario, and other unions representing plan members.
Please join us by sending a letter to OMERS.