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November 21, 2019

The Advantages Retirement Plan™’s investment program and how it’s overseen

Learn about the governance and legal structure for the plan that puts members’ interests first

This article will help you:

  • Learn more about how the Advantages Retirement Plan™’s investment program, through which investment and annuity options are selected and overseen

The Advantages Retirement Plan™’s investment committee

When surveyed about what they wanted in a group retirement plan, OMA members prioritized the need for independent oversight and a structure that puts the needs of the physician community first. In response, OMA Insurance, as the plan sponsor, has established an expert-led investment committee to develop and oversee the investment program.

The current members of the Investment Committee are:

  • Bernard Morency (chair): Former global retirement practice leader for Mercer and public pension fund executive vice-president
  • Dr. Paul Healey: Emergency physician at Oakville Trafalgar Memorial Hospital, assistant clinical professor at McMaster University, founder of “Physician Financial Independence (Canada)” online community and physician financial wellness speaker
  • Dr. Audrey Karlinsky: Family physician at Bedford FHO, staff physician at Mount Sinai and Women’s College hospitals in Toronto and assistant professor, department of family and community medicine at the University of Toronto
  • Deborah Leckman: Former commissioner at the Ontario Securities Commission and public pension fund vice-president of equities
  • Morgan McCague: Former investment executive at the Ontario Teachers’ Pension Plan

The investment committee has a fiduciary duty to put the Advantages Retirement Plan™ members’ interests first with respect to the design and implementation of the plan’s investment program. The committee’s responsibilities include:

  • Reviewing the Statement of Investment Policies and Procedures at least once a year and providing any recommendations to evolve the Advantages Retirement Plan™ investment program design for OMA Insurance to approve,
  • Selecting investment managers and annuity providers, investment and annuity options, investment and annuity consultants for the Advantages Retirement Plan™ investment program in accordance with the Statement of Investment Policies and Procedures
  • Determining how investment and annuity products are integrated for the Advantages Retirement Plan™ members, including default investment and annuity options
  • Monitoring and evaluating the performance of investment and annuity products as well as providers and recommending any changes as required.

The Statement of Investment Policies and Procedures and Investment Committee Terms of Reference

There are two documents — the Statement of Investment Policies and Procedures and the Investment Committee Terms of Reference — that set out the design of the Advantages Retirement Plan™ investment program and govern its implementation.

The Statement of Investment Policies and Procedures

The investment committee designed and recommended the Statement of Investment Policies and Procedures specific to the Advantages Retirement Plan™ investment program for OMA Insurance Board approval.

The statement sets out the Advantages Retirement Plan™’s:

  • Scope and purpose
  • Core policies and procedures for the Advantages Retirement Plan™ governance and operations
  • Investment fund governance, objectives and performance targets
  • Guidelines for selecting, monitoring and terminating investment fund managers and annuity providers
  • Conflict of interest guidelines for entities that are involved in the Advantages Retirement Plan™’s governance

Investment program-specific excerpts from Section 5 (Investment Objectives and Beliefs) of the Statement of the Investment Policies and Procedures include the following:

5.1 “The board recognizes that the members are not investment professionals yet are called upon to make investment decisions (fund selection, rebalancing, etc.).”

5.2 “In establishing the types of investment options to be offered under the Advantages Retirement Plan™, the board has considered the main objectives of an investment structure, namely:

  • 5.2.1 Allow members to tailor their portfolio to their needs by accommodating various investment horizons, risk tolerance profiles and investment behaviours
  • 5.2.2 Cover the risk/reward spectrum (i.e. trade-off between risk and return potential associated with different fund choices).”
  • 5.3 “The board confirms that its first obligation is to achieve optimal net returns for members commensurate with risk. Net return is an appropriate combination of investment decisions and costs…”
  • 5.4 “The committee shall review the investment options offered on a periodic basis with a view to continuous improvement, as well as to ascertain that they remain suitable and consistent with the stated objectives.”

The investment committee terms of reference 

The terms of reference for the investment committee (“terms of reference”) set out how the committee is to assist OMA Insurance in fulfilling its duties and responsibilities in accordance with the Statement of Investment Policies and Procedures.

In accordance with the terms of reference, the investment committee may have up to seven members, the majority of whom must be independent investment experts, and at least one of whom must be a physician of the Advantages Retirement Plan™ to ensure plan members’ voices are directly represented.

Selecting investment and annuity options: A competitive process

The investment committee ran a competitive process (approved by OMA Insurance) to pick the Advantages Retirement Plan™’s selected investment (BlackRock) and annuity partners (Brookfield Annuity Company), in accordance with the Statement of Investment Policies and Procedures.

Selection criteria for the investment and annuity partners included:

  • Investment/annuity product quality and suitability for the Advantages Retirement Plan™’s objective of serving plan members
  • Quality and suitability of supporting services, such as team capabilities and ability to provide insightful, high-quality and objective advice to OMA Insurance and the investment committee
  • Firm characteristics such as track record, governance and references (plus credit-worthiness and Assuris program for the annuity provider)

Within the Advantages Retirement Plan™, members can select various investment and annuity options. The range of investment and annuity options currently available to the Advantages Retirement Plan™ members include:

  • Target-date funds, which provide a mix of investments that is matched to each plan member’s expected retirement date, and automatically adjusts the mix as you get closer to retirement
  • Annuities, which provide lifelong, stable and guaranteed retirement income to the Advantages Retirement Plan™ members, no matter how long they live or how investment markets perform

It is expected the investment program will evolve over time as the plan scales. The investment committee has a mandate to seek opportunities to improve the investment program based on member feedback and opportunities in the financial services market. Members are encouraged to provide feedback on the plan’s investment program by contacting OMA Insurance.

Key insights

  • The Advantages Retirement Plan™ Investment Committee designed and recommended the plan’s investment program policies and procedures for OMA Insurance Board approval
  • The investment committee is composed of investment experts, including former executives from two of Canada’s largest pension funds, and physician representatives
  • The investment committee is responsible for providing ongoing oversight of the investment program and recommend changes to the OMA Insurance Board as appropriate on an annual basis, based on member feedback and financial market opportunities
  • The investment committee has a fiduciary duty to put the Advantages Retirement Plan™ members’ interests first with respect to the design of the investment program and selection of investment managers and annuity providers
  • The Statement of Investment Policies and Procedures sets out the Advantages Retirement Plan™’s investment program governance, objectives, beliefs and performance targets, as well as policies and procedures for selecting, monitoring and terminating fund managers and annuity providers