97% of active members support the merger
(Toronto: January 11, 2016) Members of The Royal Ontario Museum (ROM) pension plan have overwhelmingly chosen to join the Colleges of Applied Arts and Technology (CAAT) Pension Plan.
The merger is the first of its kind to use Ontario’s new regulations permitting the conversion and transfer of assets from a single-employer pension plan in the broader public sector to a jointly governed, multi-employer pension plan. The regulations came into effect November 1, 2015.
The main elements of the merger process were completed within a relatively short six months. The endorsement by the Financial Services Commission of Ontario is expected within several months.
The merger allows the ROM to exit the pension-management business and focus on its core competency of research, education, community outreach, and operating one of North America’s largest museums with over a million visitors in 2015.
Of the active ROM pension plan members, 97% voted to join the CAAT Pension Plan while no retirees or deferred members voted against the merger. The 45-day information and voting process concluded on December 21, 2015, and ROM employees began earning pension benefits in the CAAT Plan on January 1, 2016.
Under the general conditions of the merger, the 640 active, retired and deferred pension members from the ROM plan will receive a pension based on the ROM plan provisions for their service accrued to December 31, 2015, and a pension based on CAAT Plan provisions for service accrued after that date.
The ROM pension plan was operating under a temporary solvency funding exemption, which would have expired in 2017 and increased its pension contributions. Under the funding rules for single employer pension plans, ROM pension costs would have increased significantly.
As a multi-employer pension plan the CAAT Plan has a different risk profile than single employer pension plans, such as the ROM. The long-established and fully funded CAAT Plan is managed by pension experts to provide secure pension benefits.
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QUOTES
Derek W. Dobson, CEO and Plan Manager, CAAT Pension Plan
“We’re delighted to welcome members from the venerable Royal Ontario Museum and I’m pleased that they have chosen to join the CAAT Plan, which is a well-funded, sustainable pension plan offering valuable and secure benefits at stable and appropriate contribution rates.
For the ROM, the merger lowers the costs and risks associated with running a single employer pension plan, and moves the complexity of pensions to a more sustainable joint governance structure.”
Mark Engstrom, Interim Director & CEO, Deputy Director, Collections & Research, the ROM
“The merger means the ROM will be able to spend much less time and resources on pensions and more on what we do best while continuing to offer our dedicated employees a valuable pension benefit. This is a solid financial decision for the ROM.
The merger process has been a rousing success and I’m thankful for the time and effort the team from the CAAT Plan has put into educating our staff and retirees of the options before them. Their involvement and dedication has made all the difference.”
QUICK FACTS
About the CAAT Pension Plan
- Created in 1967, the CAAT Pension Plan assumed its current jointly sponsored governance structure in 1995.
- The CAAT Plan is a Defined Benefit pension plan with 50/50 cost sharing. Decisions about benefits, contributions and investment risk are also shared equally by members and employers.
- The Plan is sponsored by the College Employer Council, OCASA (Ontario College Administrative Staff Association), and OPSEU (Ontario Public Service Employees Union).
- With $8.5 billion in assets, the CAAT Plan is Ontario’s only postsecondary sector multi-employer pension plan and serves 43,000 members from 38 employers.
- In its valuation as at January 1, 2015, the CAAT Plan is 107.2% funded on a going-concern basis with a funding reserve of $773 million.
- The CAAT Plan’s well-diversified investment portfolio earned a rate of return of 11.5% in 2014, and has earned a 5-year average annual rate of return of over 10.5% -- both numbers are net of investment management fees.
- The CAAT Plan has appropriate contribution rates at a level adequate to secure pension benefits over the long term while maintaining a healthy funding reserve, especially needed by jointly sponsored plans, to manage through unforeseen economic and demographic shocks.
- Appropriate contribution rates (member matched by the employer): Basic 8.2% of income to the Yearly Maximum Pensionable Earnings (YMPE), currently $54,900, and 11.8% on income above the YMPE; plus temporary stability contributions of 3% above and below the YMPE to build additional reserves to meet funding policy objectives.
About the ROM
Opened in 1914, Canada’s largest museum of natural history and world cultures has six million objects in its collections and galleries showcasing art, archaeology, and natural science. The ROM is the largest field research institution in the country, and a world leader in research areas from biodiversity, palaeontology, and earth sciences to archaeology, ethnology, and visual culture - originating new information towards a global understanding of historical and modern change in culture and environment.
Media Contact:
John Cappelletti
Manager Stakeholder Relations
CAAT Pension Plan
416.673.9040, mobile 647.462.9287
jcappelletti@caatpension.on.ca
Marnie Peters
Assistant Vice President, Public Relations & Publications
Royal Ontario Museum
416.586.5858, mobile 416.562.1635