Protect Your OMERS Pension

Protect Your OMERS Pension
To: CUPE Local Presidents & Secretary Treasurers with Members in the OMERS Pension Plan

From: Fred Hahn –  President, CUPE Ontario

RE: URGENT “Take Action” to Defend OMERS Pension Benefits

Date: May 2, 2018

I’m writing to update you on discussions on OMERS Pension Plan changes and their “Comprehensive Plan Review”. The CUPE Ontario OMERS Reference Group has been working with plan members to defend OMERS pension benefits through this process. Today I’m writing to each Local with members in the OMERS Defined Benefit Pension Plan to ask you and your members to take several specific actions to support the campaign to preserve our members’ hard-earned pension benefits in OMERS.

Background and Update

This is the second year in a row where there has been a big push by some at OMERS to modify plan benefits. As detailed at our recent sector conferences, CUPE Ontario and allies were able to push back last year’s plan, known as Modified Inflation Indexing (MI2) that would have seen the guarantee of 100% indexing taken out of the OMERS plan text.

Now OMERS is going through a “Comprehensive Plan Review” which is examining all plan benefits. While we still believe that guaranteed indexing remains the focus of those intent on modifying plan benefits, in a recent meeting with OMERS plan Sponsors, it became clear that all plan benefits, like survivor benefits, early retirement and even the base pension calculation, are being examined.

This is happening even though OMERS has recorded successive years of excellent investment returns and is well ahead of schedule with its plan to return to full funding after the 2008 financial crisis.

This is also happening fast, with those at OMERS who are leading this process planning to complete it in a few short months, with an eye to vote on plan changes by the end of June.

CUPE Ontario’s Response

CUPE Ontario and our representatives at OMERS have made it clear that our union doesn’t support any modifications at OMERS that will reduce pension benefits like the guarantee of 100% indexing.

CUPE Ontario has been clear that there is no need to veer off the current plan that is working to return OMERS to fully funded status. Our members have joined us in sending this message, with more than 6,000 sending emails to OMERS through our “Take Action” webpage.

CUPE Ontario members attending the recent OMERS Spring Information Session made it clear they want to see pension benefits, like indexing, fully maintained. Members, in particular young workers, took to mics to demand OMERS pension benefits be preserved now and for our future members.
We have also been clear that a Comprehensive Plan Review needs to be member-focussed.  All pension plans face future challenges, but in considering how to deal with them, the impact on plan members’ retirement income must be the primary focus.

How we need Locals to get involved

More than 40% of OMERS plan members are members of CUPE in Ontario. As the union representing the largest number of plan members, we need to make sure OMERS hears directly from the full breadth of our membership. We are asking Locals to assist by taking the following actions.

  1. Send a letter directly, from your Local on your Local’s letterhead, to the OMERS Sponsors’ Corporation Board.  They are the ones who will make the decision on any plan changes and they need to hear from you.

A template is available at the following link and should be modified to reflect the reality of your local’s membership. We are asking that these letters be mailed as an official correspondence to the Board and that you also forward a copy to CUPE Ontario.

  1. Share our CUPE Ontario Protect Your OMERS Pension “Take Action” Webpage as a link on your Local’s website and through your social media channels.  Feel free to share widely with all OMERS members you know. https://cupe.on.ca/omers-guaranteed-indexing/
  1. Update your Local’s members – and get the word out in workplaces.

Leaflets are available in French and English that include the link to our “Take Action” webpage.Contact us if you’d like them emailed for printing in your office or if you would like us to ship some to you.

Present to your members — the CUPE Ontario presentation on the situation at OMERS is available at the links below.We have also done up speakers notes to assist Local leaders in presenting at membership meetings.

English:

https://cupe.on.ca/wp-content/uploads/2018/04/OMERSPowerpoint.English.2018.pdf

https://cupe.on.ca/wp-content/uploads/2018/04/FINAL-OMERS.Presentation.SpeakersNotes.2018.English.pdf 

French:

https://cupe.on.ca/wp-content/uploads/2018/04/OMERSPowerpoint.French.2018.pdf

https://cupe.on.ca/wp-content/uploads/2018/04/FINAL-OMERS.Presentation.SpeakersNotes.2018fr.pdf

We will be reaching out directly Locals in the coming weeks and thank you ahead of time for participating in our campaign to preserve our OMERS pension benefits.

In Solidarity,

Fred Hahn
President

OMERS just had another high performing year.

• Investment returns of a net 11.5 per cent – almost double required discount rate of 6.2 per cent and well above the strategic rate.

• 2017 earnings of $9.9 billion were used to both lower next year’s discount rate and increase the plan fund.

• The plan holds more than $95 billion in assets

Yet some at the Sponsors Corporation want to get rid of key benefits like guaranteed indexing. We can’t let that happen.

Let OMERS know we must keep key benefits like guaranteed indexing so we can keep up with cost-of-living increases and live with dignity after we retire.

Send them a message: 

Dear Sponsors Corporation CEO,

I am a member of the OMERS pension plan and am writing to express my concern that, yet again, the OMERS Sponsors Corporation (SC) is considering plans to modify the benefits in OMERS, including guaranteed indexing.

After yet another high performing year, OMERS is well ahead of schedule to be fully funded by 2025, keeping our plan in a strong position to maintain core benefits like guaranteed indexing.

2017’s investment returns of a net 11.5 per cent are almost double the required discount rate of 6.2 per cent and well above the strategic rate. With $9.9 billion in earnings this year, the plan was able to both lower the discount rate for 2018 and increase the plan’s funded status.

We are in a very strong position to stay the course and, as a member of the plan, that is what I want OMERS to do as it goes through the Comprehensive Plan Review.

Most OMERS pension members make modest salaries, but we defer a portion of our wages to the plan because we know it is critical for our retirement. We also know that our modest salaries turn into modest pensions. Maintaining OMERS benefits, like guaranteed indexing, is critical to us keeping up with the constant increases in the cost of living once we retire.

Guaranteed indexing, survivor benefits and early retirement are some of the key benefits of being an OMERS plan member. They are features of our pension plan that make us proud to be members – features for which I have willingly contributed more to my pension to guarantee they will be there when I retire.

I know the current proposal is to do a Comprehensive Plan Review, looking at all plan benefits based on “what if” versions of the future. I also know this comes less than a year after previous attempts to erode guaranteed indexing.  Any attempt to reduce OMERS’ current benefits puts my own retirement planning in jeopardy. That is not an unknown future “what if” – that is a fact.

I am asking all members of the OMERS SC to do the right thing and vote against any proposals that reduce OMERS benefits, and request that, as the CEO, you ensure this correspondence is shared at the next meeting of the OMERS SC Board.

Sincerely,

[Your Name]