Questions and answers
In short, governance is the process used to ensure that an organization is well run and operates in the best interest of its stakeholders. Among other things, good governance should:
- define roles and responsibilities,
- draw clear links between responsibility and accountability,
- establish checks and balances on all power and authority,
- set expectations for ethical behaviour, and
- provide guidelines for avoiding conflict of interest.
At Ontario Pension Board (OPB), we're committed to good governance. We have a well-defined operating structure, high professional standards and a deep-seated culture of integrity and openness.
OPB manages the Public Service Pension Plan (PSPP) - your pension plan. It's up to OPB to make sure that your pension is there when you need it. Good governance helps ensure OPB:
- operates effectively and efficiently,
- prudently invests and manages the PSPP's assets,
- protects and promotes the best interests of Plan beneficiaries and other stakeholders, and
- meets legislative requirements.
Ultimately, OPB's Board of Directors is responsible for running OPB.
Among its many duties, the Board must:
- oversee management of the PSPP and its assets;
- ensure that management is taking the appropriate steps to deal with the various risks facing OPB, the PSPP and the pension fund;
- supervise various audit functions, including the effectiveness of OPB's internal controls;
- approve OPB's strategic plan, business plan and budget;
- ensure the effectiveness of OPB's governance framework; and
- make sure the Board, its committees and management comply with the established governance procedures.
To operate effectively and efficiently, the Board can and does delegate:
- key policy and oversight functions to five Board committees; and
- day-to-day administration of the PSPP and management of its assets to OPB's Management team.
The Board is currently made up of nine highly qualified members, each appointed by the Plan Sponsor (the Ontario Government). Members are appointed primarily based on their professional expertise. At least three of the appointed members are nominees of Bargaining Agents representing PSPP members.
No. The roles of Chair and CEO are separate. Management does attend meetings of the Board and its Committees as invitees but have no vote in Board decisions. The Board and its Committees hold in camera (that is, without Management present) meetings with OPB's auditor and actuary and with respect to executive compensation matters.
Absolutely. Management's accountability is clearly defined in the OPB's governance documents. The President & CEO is accountable to the Board for the actions of OPB management. Management is accountable to the President & CEO for the actions of OPB employees. Employees must:
- abide by OPB's Statement of Governance Principles, By-laws and Code of Conduct;
- adhere to OPB policies governing ethical behaviour; and
- ensure that OPB complies with all applicable laws and regulations.
In fulfilling its duties, the Board is directly accountable to:
- the Plan's beneficiaries (i.e., members and pensioners);
- the Financial Services Commission of Ontario, the organization that oversees registered pension plans in Ontario; and
- the Government of Ontario, the Plan Sponsor.
OPB's governance framework includes several checks and balances to ensure the interests of Plan beneficiaries come first. Here are some examples:
- The memorandum of understanding under which OPB is established acknowledges an arm's length relationship between OPB and the government. The memorandum specifically states that OPB's duty to Plan beneficiaries is paramount.
- OPB's Statement of Governance Principles confirms that the primary fiduciary duty of the Board and management is to protect and advance the collective interests of Plan beneficiaries.
- Under OPB's by-laws, all major policy and Plan change recommendations sent to the Plan Sponsor by OPB must be approved by OPB's Board of Directors first. To ensure that interests of Plan beneficiaries are heard, the Board includes three members nominated by Bargaining Agents that represent PSPP members.
Numerous internal controls are in place to protect the fund against fraud and theft. These internal controls are reviewed on a regular basis by an independent, third-party auditor to ensure that they work; the results are reported directly to OPB's Audit Committee.
On November 14th, OPB presented its submission to the Expert Commission on Pensions.
The Government of Ontario created the Expert Commission to examine legislation that governs funding of defined benefit pension plans in Ontario, the rules relating to pension deficits and surpluses, and other issues relating to the security, viability and sustainability of the pension system in Ontario.
Download a copy of OPB's submission (PDF).
OPB's Annual Report has a unique reporting process that it must follow every year (no other public sector plan in Ontario shares this process). The Annual Report must first be provided to the Ministry of Government Services, and the report is then submitted to the Clerk of the Legislature by the Ministry. This process must be complete before the report can be released publicly.