OMERS Alert, 4/28/2010
Attention All OPFFA Locals – Important Notice Regarding OMERS OMERS is facing a funding deficit of $1.5 billion at the end of 2009. This deficit is projected to grow over the next four years as nearly $5 billion of net losses primarily from the 2008 market crash are recognized through an actuarial process called "smoothing". Recognizing losses (or gains) through "smoothing" over a five year period allows for a more stable contribution rate environment and helps cushion the OMERS plan from market volatility. Even with robust investment returns, the funding deficit, adjusted for potential changes to the actuarial assumptions, is expected to grow to as much as $12 billion by 2012 unless corrective action is taken by the Sponsors Corporation. When an actuarial valuation is filed with the regulator the Sponsors Corporation must look at potential options such as contribution rate increases and/or benefit changes. Currently our contribution rate is an aggregate rate of 15.4% (both employees & employers). If nothing is done by the OMERS Sponsors Corporation then our members and the employers are potentially facing on average a 3-4% increase in contribution rates for 2013 when the plan is required by law to file its next valuation. All of this was discussed with our Executive Board and our OMERS reps, Frank Ramagnano and Rick Miller during the recent OPFFA's Spring Seminar. As well, we have been working closely with our Police counterparts and their OMERS representatives from the PAO. Both Executive's have supported the necessary latitude for our OMERS Sponsors Corporation representatives to discuss a blended option of contribution rate increases combined with a "window" approach to benefit reductions whereby those benefits would be replenished when the plan returns to a fully funded position. The OMERS Sponsors Corporation has received a number of contribution rate increases and benefit reduction options submitted by various Sponsors Corporation Board members and will be considering each proposal shortly. These plan design changes are only proposals at this stage and can be viewed on the OMERS SC website – www.omerssc.com – click on Plan Design Changes. Any plan design change will only affect service occurring within the "window" on a going forward basis and at the earliest would become effective January 1, 2011. We have full confidence in our representatives Frank Ramagnano and Rick Miller to do what is right for the plan and right for our members. We have requested both of them to report out to the delegates at our upcoming Convention on Wednesday, June 2, 2010. It is at this stage where we will be able to provide informative scenarios of any contemplated benefit changes and their impacts on our members. We want to stress that all retirees will see no affect on their current pensions regardless of the decisions made by the OMERS Sponsors Corporation. As well, all active members pensions accrued to date are not impacted. Please review the attached notice for more information. As well please post this notice or share it with your members through whatever communication means you utilize. Should you have any questions do not hesitate to contact me. Fraternally, Fred LeBlanc, President, OPFFA fleblanc@opffa.org |
