Ontario Teachers' Pension Plan

Ontario Teachers' Pension Plan Board

Type	Private
Industry	Pension fund
Founded	1989 (1989)
Headquarters	Toronto, Ontario, Canada
Key people	Ron Mock (CEO)[1] Jean Turmel (Chairman)[2]
Total assets	C$189.5 billion (Dec 2017)[3]
Number of employees	1100
Subsidiaries	Cadillac Fairview
Website	www.otpp.com

The Ontario Teachers' Pension Plan Board (Ontario Teachers'; French: Régime de retraite des enseignantes et des enseignants de l'Ontario^[4] or RREO), is an independent organization responsible for administering defined-benefit pensions for school teachers of the Canadian province of Ontario. Ontario Teachers' also invests the plan's pension fund, and is one of the world’s largest institutional investors. The plan is a multi-employer pension plan, jointly sponsored by the Government of Ontario and the Ontario Teachers' Federation.

History

Ontario Teachers' was established on Jan. 1, 1990.^[5] Until then, Ontario teachers' pensions had been sponsored solely by the Ontario government. Assets of the plan had been invested in government bonds only.

Organization

Today, the plan administers the pensions for some 184,000 teachers, principals, and school administrators, and pays pensions to some 139,000 retirees. In 2017, $5.9 billion in benefits was paid to members. Ontario Teachers' is headquartered in Toronto, with operations in London, Hong Kong and an office in New York. Effective January 1, 2014, Ron Mock, succeeded Jim Leech as President and Chief Executive Officer.^[6] The Chair of the Board is Jean Turmel.^[7]

Investments

Ontario Teachers' is one of Canada's largest institutional investors having reported $189.5 billion in net assets on December 31, 2017. It has an excellent track record for investment performance with an average annual return of 9.9% since inception.

Ontario Teachers' owns and manages a diversified portfolio of Canadian and international assets. Through its fully owned real estate subsidiary Cadillac Fairview, Ontario Teachers' owns properties that include the Toronto-Dominion Centre, Toronto Eaton Centre, and the Rideau Centre in Ottawa. Through its private equity investment arm Private Capital, Ontario Teachers' owns or has had interests in companies such as Helly Hansen, Munchkin, Plano and Shearer's Foods.

Ontario Teachers' owns a substantial portfolio of infrastructure assets including: 100% of Bristol Airport and minority stakes in Birmingham Airport, Copenhagen Airport, Brussels Airport and London City Airport; the High Speed 1 rail line linking London with the Channel Tunnel; and international water and power utilities. Ontario Teachers' also owns Camelot Group PLC, which holds an exclusive licence to operate the U.K. National Lottery. It has acquired a share of the Irish National Lottery in 2014.

In 2017, it acquired Mémora Servicios Funerarias, a Spanish funeral provider, from 3i.^[8]

On September 26, 2018^[9], Ontario Teachers’ joined finance, health and government leaders in signing the Tobacco-Free Finance Pledge, which commits the pension plan to no longer invest in tobacco companies.

Ontario Teachers' posts a list of major investments annually on its website.

Pension funding

The pension plan reported a preliminary $11.5 billion funding surplus as of Jan. 1, 2017. Despite improved funding levels, the pension plan still faces challenges resulting from increasing longevity, longer retirements and a volatile investing environment.

Media coverage

On the January 12, 2004 episode of Rick Mercer Report, comedian Rick Mercer had a short segment about the Ontario Teachers' Pension Plan, in which he humorously contrasted the plan's beneficiaries (i.e. teachers) with the investments the plan had made, including shopping malls and the tobacco industry.^[10]

On December 2, 2008, New York lawyer Marc Stuart Dreier was arrested at Ontario Teachers' Toronto offices and charged with impersonating, through his words and by the use of business cards, Michael Padfield, a senior lawyer with the pension plan. A secretary in the Ontario Teachers' offices had become suspicious and notified Toronto police who promptly arrested him. Dreier was attempting to close a sale of forged Ontario Teachers' promissory notes, worth $44.7 million USD, by meeting with the buyers right in the Ontario Teachers' offices.^[11] On December 4, 2008, Dreier was indicted by the United States Justice Department for successfully executing a similar corporate officer 'impersonation' routine, including bluffing his way into using the momentarily vacant CEO's office of one 'selling' firm for a meeting with the buyer, to sell forged financial instruments on at least two occasions in New York.^[12]

References