How Can OMERS Be Revised

It astounds me that the Government is moving forward on a bill to revise OMERS when the FSCO has not completed its investigation into OMERS. That investigation has taken over a year so far with no public report issued yet.

Just recently five directors of an OMERS subsidiary left "out of a sense of frustration with the incompetence of the OMERS board."

We do not need to revise their Act. We need a judicial inquiry into their affairs! That is what CUPE and municipal councils should really be pressing for.

Liberals playing with fire over pension bill
Nov. 14, 2005. 01:00 AM
IAN URQUHART


Now, however, the McGuinty government is itself at risk of losing the support of municipal leaders with an obscure piece of legislation called Bill 206, which is the subject of public hearings starting today at Queen's Park.

Bill 206 would change the governing structure and the basic rules for the Ontario Municipal Employees Retirement System, or OMERS, as it is known.

OMERS is the pension plan for 355,000 current employees and retirees from some 900 municipalities, emergency services, and other agencies. With $36 billion in assets, it is the second biggest pension fund in the province, after the teachers'.

The changes proposed in Bill 206 legislation are couched in the arcane language of the pension industry. Suffice it to say that under the bill, responsibility for the plan would shift from the province to the employers and employees.

That's the non-controversial part.

What has the municipalities worried is that the bill would also make way for the establishment of "supplemental" pension plans for police officers and firefighters.

The municipalities' concern, articulated in stiffly worded council resolutions and letters to Liberal MPPs, is that the unions representing the police officers and firefighters will use these supplemental plans to enrich their pension benefits.

That, in turn, would force higher costs on the municipalities in the form of matching contributions to the plans.

Municipal sources estimate the move will cost municipalities an additional $360 million a year, which would drive up property taxes by 3 per cent on average. Municipal Affairs Minister John Gerretsen, the sponsor of Bill 206, dismisses such concerns as based on worst-case scenarios.

He notes that the police and fire unions would still have to negotiate improvements in their pensions with their employers and says of his municipal critics: "They are not really trusting their own negotiating skills."

But the municipalities point out that emergency workers don't have the right to strike and, therefore, their contracts are often settled through binding arbitration.

Over the years, municipal leaders have learned not to put much faith in the whims of arbitrators.

All of which raises the question: Why are the Liberals doing this?

The short answer is that, as in so many other cases, McGuinty made a pre-election promise to do it. As leader of the opposition, McGuinty wrote a letter to Rick Miller, the firefighters' representative on the OMERS board, saying that he supported "additional supplemental plans."

Notwithstanding this previous commitment, when Bill 206 was brought to cabinet earlier this year, there was reportedly a spirited debate, with some ministers suggesting the government should disavow the McGuinty letter because it was written without full knowledge of the potential consequences.

But, in the end, the government decided to give the bill first reading in the Legislature and then send it straight to committee. Whether the Liberals have the tenacity to take the bill all the way to third reading remains to be seen.

A footnote: Bill 206 also faces stiff opposition from the Canadian Union of Public Employees, the biggest union covered by OMERS. CUPE believes the bill will leave it underrepresented on the OMERS board and will prevent its members from bargaining better benefits.