the slides

Member Webinar
Why growth is good
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Member Webinar
Why growth is good
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Your key questions:
 What is being proposed and why is it a
good idea?
 How would a joint colleges and university
pension plan be governed?
 Where are we in the process and the
necessary approvals?
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The proposal
 Merge CAAT Plan with interested universities
 voluntary campus-by-campus solution
 University members …
 accrue pension on a future service basis
 past service pension transferred and replicated in
the Plan on cost-effective basis while still
protecting the current CAAT participants
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The proposal (continued…)
 Single universities exit pension management
business to join an established, fully-funded
postsecondary sector multi-employer plan
 Provisions accommodate universities with the
consent of their applicable unions and faculty
associations
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Upside of growth
 CAAT is driving part of the solution to the
postsecondary sector pension challenges –
ensures the best possible outcome
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Growth in membership improves…
 Probability and timing of Funding Level 4
 Probability of remaining fully funded in more
adverse economic scenarios
 Probability of paying conditional indexation
 Contribution stability (lower volatility)
 Plus, lowers risk and amount of potential
contribution increases
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Guiding principles
 Mergers must be in the best interest of the
Plan members
 Plan will not assume any university’s deficit
 Colleges and members who work at colleges,
retain at least 50% of the governance roles,
regardless of how many universities join
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Your key questions
 What is being proposed and why is it a good
idea?
 How would a joint colleges and university
pension plan be governed?
 Where are we in the process and the
necessary approvals?
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Current Board of Trustees
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Implementing proposed Board of Trustees
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Proposed Board of Trustees – maximum size
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Changes present manageable risk
because…
On the Board of Trustees
 Members have a fiduciary duty to act in the
best interest of the Plan
 There is an alignment of interest
 Decisions require majority
 Implementation will occur over time
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Current Sponsors’ Committee
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Implementing proposed Sponsors’
Committee
 As universities join the Plan and relinquish
withdrawal rights:




< 20% of the Plan’s assets:
20-60% of the Plan’s assets:
60-100% of the Plan’s assets:
> 100% of the Plan’s assets:
2 seats
4 seats
6 seats
8 seats
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Proposed Sponsors’ Committee – maximum
size
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Changes present a manageable risk
because…
On the Sponsors’ Committee
 Diverse needs and philosophies have not
been an impediment
 Established culture of finding the right
solution for all stakeholders
 Fundamental decisions are enshrined in the
Funding Policy – it’s a strength of the Plan
 Implementation will occur over time
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Funding Policy
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Your key questions
 What is being proposed and why is it a good
idea?
 How would a joint colleges and university
pension plan be governed?
 Where are we in the process and the
necessary approvals?
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Assessment of progress
 Survey and meetings shows growing support
for CAAT solution
 Boards, administration and member groups
requesting more details
 DC
 Hybrid
 DB
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New name builds on our reputation
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Approvals required
 Each sponsor to approve the amendments to
the Sponsorship and Trust Agreement
 Sponsors are:
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Next steps for the growth initiative
 Changes needed to Ontario legislation
allowing transfer of past assets and liabilities
 Continue to work to agreements with
interested universities and member groups
 Ensure Plan members are kept informed
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Conclusion – an alignment of interests
 We believe the merger of interested
university pension plans with the CAAT Plan
benefits all stakeholders by creating stable,
predictable costs and more secure benefits at
a lower risk.
 The benefits of mergers are significant to all
stakeholder groups and outweigh the
associated risks and administrative
complexities.
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