Re: Pension Education Conference
Brothers and Sisters;
Report on the 2012 IFEBP ATMS Part III Pensions in Halifax, NS
I recently attended the ATMS (Advanced Trustee Management Standards) Part III â€“ Pensions this continuing education part 3 of a 4 part series focusing on strengthening the Boards leadership role on managing the pension fundâ€™s balance sheet, stressing strategies for dealing with crises in funding. The curriculum also examined the best practice considerations for investment governance and other investment oversight issues.
To save paper I will give a brief overview of the 2 days and a binder the thickness of 2 telephone books. If anyone would like to view the course handouts or content let me know and will make it available.
Part III is a 2 day in-depth and review and overlap of Parts 1 and 2 with a focus on Introduction and Effective Governance in Funding and Investment Policies.
We reviewed two overviews of:
A) Funding Policy Process:
Actuarial and Regulatory standards
Monitoring and review
B) Asset Management Process:
1. Plan Design
Asset Mix Policy
Investment Manager Structure
Monitoring and Review
During the 2 days our learning objectives were to understand the key components in developing on effective Funding policy and the pros/cons of different approaches.
To understand the key components in developing an effective Investment Policy and the pros/cons of different approaches.
To strengthen the oversight capabilities with respect to our asset management program and our funding policy and actuarial valuation process.
The ability to assess what is critically important and what is a trivial detail.
Our learning objective included
-review of our fiduciary responsibilities
-discuss the role of governance in meeting fiduciary responsibilities
-learn the Ambachtsheer-Ezra governance model
-highlight key CAPSA guidelines
-Pension Plan Governance Guidelines (October 2004)
-Draft Prudence Standards (November 2009)
Discussion began with â€œWhat is governance?â€ â€“ An ongoing oversight process whereby the roles and responsibilities of all parties involved in managing a pension plan are formally defined and each party is held accountable for their actions.
We reviewed the â€œAmbachtsheer-Ezraâ€ Governance model used by large pension plans such as CPPIB, OTPP and OMERS.
Currently only three governments have regulation requiring that a detailed Governance Plan be prepared.
Ontario and Nova Scotia recommended that they be filed with a regulator.
BC/Alberta report recommended that the CAPSA Governance Principles be adopted as a schedule in pension legislation.
CAPSA Pension Plan Governance Guidelines is a model with 11 principles being looked at by many pension plans as their governance model.
This part of the training reinforced the importance of review and monitoring of the plan objectives.
During the breaks it was interesting to network and share information with other trustees regarding the challenges of their plans and strategic decisions they will be making. Fortunately, we are not having the attacks of public sector pensions as our neighbors in the USA are, but many plans in Canada are or will be having to have those discussions with their members regarding increasing contributions or adjusting benefits to maintain their pension plans but we have already gone through some tough decisions in shoring up the long term viability of our plan. The consensus was keeping the members informed and that communication is key. As a trustee it is key to be educated and continually seek that knowledge that will assist you in meeting your fiduciary responsibilities and decision making.
In closing as a new trustee (I have been involved for 4 years â€“ â€œnewâ€ in pension terms) we must quickly gain an understanding of the basic principles of trust fund management as well as an awareness of where to find the answers and more importantly at times, is what questions need to be asked when making decisions. The ATMS III has provided the building blocks of knowledge on the importance of governance, strengthening our investment oversight and managing a sustainable funding policy. Initially when I began the role as your trustee the commitment, trust bestowed and fiduciary responsibility almost seem overwhelming. I did make the commitment to the Executive and the membership that I would rise to the challenge. Thanks to the assistance of past and present trustees, the staff of the WCEBP with orientation and mentoring, networking and education programs, the seemingly complicated process has become clearer with the understanding of the obligations, plan responsibilities and applicable legislation and regulations to keep the “pension promise”.
I pledge, as your trustee, to continue to learning, to keep improving my skills, abilities and gain experience to ensure our plan remains sustainable and viable for the generations following.
When planning for retirement we all should have probably started years ago even the younger generation have challenges that we might not have had so I have attached an article titled “Gen Y wants to retirement but few have saving” by Linda Nguyen, The Canadian Press.
Thank you for your support and allowing me the honour to represent you.
Cheers, enjoy the rest of the summer.
Sincerely and in Solidarity.