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University Officer Diane Peters reports that Ontario’s joint retirement plan is growing, less than a year after its inception:

When the University Retirement Plan (UPP) – which combines pensions from the University of Toronto, Queen’s University and Gelf University – came into force in July 2021, it boasted more than $ 11 billion in assets and 35,000 members.

And already, the newly-retired pension has a new addition, which UPP CEO Barbara Zwani calls a “big milestone”. The Trent University Faculty Association supported the transfer of the pension last May and officially joined in January 2022. (The university hopes to obtain consent to transfer its staff retirement plan to UPP in the future.)

Deficits in the solvency of pension funds are a persistent problem for Ontario universities. Trent has long been concerned about his own pensions, said President Leo Groark. “When I came to Trent seven years ago, the number one item on the risk agenda was pension liabilities,” he said. When the idea of ​​a jointly funded retirement plan for the university sector was first proposed in 2014, Trent was one of six universities that participated in the initial negotiations with Wilfried Laurie University and King’s College College (affiliated with Western University). “Our attitude is that our main business is not retirement,” Dr. Groark said.

Part of UPP’s approach is that it can take advantage of economies of scale, bring in the best experts in pension plan management and investing, and place its significant assets in a diverse and ambitious portfolio – think of the Ontario Teacher Retirement Plan you are investing in. In real estate and has a controlling interest in many companies. And as UPP grows, the idea is that it provides an ongoing experience for people who are employed by various member universities in Ontario. “Their pension just goes with them,” said Herb Kunze, a professor of mathematics at the University of Guelph and a member of the UPP Staff Sponsorship Committee. Another advantage: small groups of employees who do not yet have pensions can apply for membership. (Employees of both the U of Guelph and U of T faculty associations have just signed up to UPP, and U of Guelph’s consists of just four people.)

Fifth potential member

Laurier officials are watching the evolution of the UPP and hope to transfer the university’s only retirement plan to it. They are educating the university community and expect to begin serious negotiations with its six trade unions and other non-trade unions in the coming months. “It’s our goal of long-term sustainability,” said Pamela Kant, Laurier’s human resources and capital officer. “We are interested in providing a competitive, comprehensive defined benefit plan and want it to be financially sustainable and secure in the future.” Although Lorie’s pension is currently well funded, the University knows that this could change if markets change.

Laurier officials also said they appreciate that UPP management model, Which is very transparent and shares risk between employers and plan members. But Ms Kant acknowledged that the university would prefer to move to UPP once it has established a central administrative system. “The founding universities are still running their own administrations, and we ideally want to join them when it’s all set up.”

Indeed, UPP is still working on its infrastructure, and by the end of April the three founding universities are in the process of transferring recent assets from their retirement plans. “We have a lot to build on the background and we are doing it with speed,” Ms. Zwan said. “It takes a few years.” UPP has a request for bids for the vendor to build and deliver an administrative platform. It also requires members to have access to responsible investing.

Questions about green investments

Although UPP has a policy that says it will “adopt responsible investment practices in our investment business,” some are still skeptical. The group, made up of faculty members from the three founding universities, sent two signed research papers to UPP calling for more transparency around the climate strategy and, among other things, a commitment to release fossil fuels by 2025 and zero emissions portfolio. 2040 year.

One member of the group is Marcus Taylor, an associate professor in Queen’s Global Development Studies, who said he and his colleagues are concerned that the plan will take a sophisticated approach to investment. “The initial statement about his policies could have been cut and pasted from some of the most mundane policies of mid-2010,” said Dr. Taylor, who also wrote an article for the Globe and Mail last fall. “We are now in 2022 and our concern about climate change is now at a completely different stage. “There is a real opportunity to create something that is not hidden in the institutional baggage, but to do something really new,” he added.

Ms. Zwan has experience in sustainable investment in her previous role as Chief Officer of Risk and Strategy for the Ontario Teachers Retirement Plan, and she expects information received from her team members to influence investment priorities. “I am confident we can take an effective approach,” he said. “We want to make sure we assess the risks associated with climate change and make investments more sustainable in the future.

After discussing these fundamental issues at UPP, Ms. Zvani expects to step up communication and education efforts. “UPP was created to be a plan for the whole sector. I see my job to make UPP as attractive as possible to other universities.

Because the process of obtaining consent from staff groups takes time, Dr. Kuns estimates, UPP may see three or four new schools joining over the next five years. As for Dr. Groarke, he said Trent officials do not regret the signing decision. “We are very confident that this is the right step for us and I expect it to be the right step for many other universities.”

UPP welcomed Trent University as a new member earlier this year:

This week, the University Retirement Plan (UPP) welcomed Trent University as its fourth member institution with the participation of TUFA Retirement Plan members. Also joining Ontario’s latest jointly funded, defined retirement plan for January 1, 2022, are staff members of the University of Gelf and the University of Toronto and authorized UPP staff.

“We are pleased to welcome the newest members of UPP, thanks to the hard work of our joint sponsors and New University partners,” said Barbara Zwan, UPP President and CEO. “This is another exciting step forward in our mission to fulfill the historic vision of the creators of UPP – to provide enhanced retirement security for current and future members, to ensure excellence in member services, to invest responsibly, and to give members a stronger voice in their plan.”

New members join the UPP formation phase as the plan builds its long-term foundations, develops member service infrastructure, and further defines its investment roadmap. This strategic work involves engaging with members faithfully in their needs, values ​​and expectations. The winter of 2022 marks a new round of member engagement, with a series of surveys and discussions focused on responsible investment.

Launched on July 1, 2021 by its founding universities – Queen’s University, Gelf University and the University of Toronto – UPP has more than 35,000 members and more than $ 11 billion in asset management.. As a co-sponsored retirement plan, decisions and entry time for new entrants are made by UPP co-sponsors. The focus of UPP is on creating a platform that excites others to join in and make the transition as smooth as possible.

“As we welcome new participants in the plan, UPP’s commitment to our mission remains unwavering,” said Gail Rubenstein, Chairman of the UPP Board of Trustees. Ontario. “

Gail Rubenstein and the UPP Board, which includes former OTPP CEO Ron Moks, know what they are doing and stay focused on their mission, working with their joint sponsors to strengthen pensions in the university sector in Ontario.

They hired Barb Zwan as the organization’s president and CEO, and then he hired an experienced executive management team, all in record time during a pandemic (working from home).

Think about it, UPP was launched in July last year and it already has a solid leadership team that includes the CEO of the CIO and Private Markets. The plan’s inaugural chief investment officer (CIO), Aaron Bennett, and his chief managing director of private markets, Peter Martin Larsen, were hired late last year.

There is already an entire team and I will only give you two investment heads, but look at the whole management team.

This is not just an experienced team, this is a team that represents the diversity of Canadian and UPP members.

I can hardly be surprised because Barb Zvan takes diversity and inclusion very seriously.

He is also a responsible investment expert, but as I read the article above, I am reminded of my old McGill days when I was sitting in Professor Tom Naylor’s office and he was telling me all about the internal quarrel in the economics department and other departments.

Academics are really smart people and it is not surprising that some make a lot of sense. Sometimes it is hard to convince them that some issues are not as black and white as they think.

Oil and gas extraction is one such issue. It may seem reasonable and valuable, but in reality, we will need the fossil fuel industry for decades as we Jump to clear zero And it’s much better to get involved with this industry than to get rid of it.

Not to mention, investing is not free, it is a price, especially in an inflationary environment where commodities thrive:

UPP grows perfectly adds a new member UPP grows perfectly, adds a new member

And this cost is borne by the retirement plan and its members.

They may be fine with that, but they need to be clearly informed about what it means to actually extract oil and gas.

Now Barb Zwan is highly intelligent, she knows it all and is very transparent and welcomes the contributions of all members of the UPP.

I met him last July when UPP started its operations and I was amazed at how much interest he has in communication and its members.

I’m sure he will have very interesting discussions and welcomes different views.

But, in the end, the governance of the UPP is what matters and the members must trust that governance and that the plan is implemented in the best interests of its members.

It is still too early, not even a year after UPP was officially launched, but I have no doubt that the board, the CEO and the senior management team have laid the right foundation.

Finally, I imagine the day when all Canadian universities will join UPP and their retirement assets will be managed and maintained by this organization.

I have seen good and bad retirement management at Canadian universities and believe more in UPP, its governance and leadership team than anywhere else.

You all have to control the activities of UPP here, they are very busy creating the right foundations.

I look forward to Barbie in the summer, or sooner, to continue last year’s activities.

Below is an interesting panel discussion featuring Barb Zwan and Eduard Van Gelderen, Senior Vice President and Chief Investment Officer of PSP Investments, held in November last year.

I picked it up here and I think it’s worth watching again.

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