Big Moves at OPTrust, OTPP and PSP

OPTrust recently appointed Peter Lindley as its president and CEO:
OPTrust, one of Canada’s largest defined benefit pension plans, today announced the appointment of Peter Lindley as the President and CEO of the organization, effective September 16, 2019. Mr. Lindley is a financial services industry veteran, with over 30 years of experience in strategy, investments and leading high performance teams.

“Peter Lindley brings deep experience in investing to this role and the Board is pleased to have someone of his expertise and calibre join OPTrust,” said Michael Grimaldi, Chair, OPTrust Board of Trustees. “As a pension management organization, we exist to serve our members, and we are confident our members will continue to be in excellent hands under Peter’s leadership.”

Most recently Mr. Lindley was President and Head of Investments for State Street Global Advisors Ltd. (SSGA Canada), where he was responsible for assets under management of $50bn and SSGA’s overall Canadian business strategy. He was with SSGA for the last 14 years. Prior to leading SSGA, Mr. Lindley held senior roles at Deutsche Bank and CIBC World Markets in Toronto. He is a strong advocate for defined benefit pensions and for responsible investing, which fits with OPTrust’s core mission and values.

“I’m delighted to join an organization that creates retirement security for so many people and I look forward to building on OPTrust’s legacy of delivering excellent results for the Plan’s members,” said incoming OPTrust President and CEO Peter Lindley.

“Defined benefit pensions like OPTrust offer tremendous value for Ontarians in every corner of the province,” said Sharon Pel, Vice-Chair, OPTrust Board of Trustees. “I want to thank Interim President and CEO Doug Michael and our whole team for their diligent service. OPTrust is fully funded and in a strong position as our new CEO begins the work of continuing to deliver on our promise to our members.”

Further details on OPTrust’s recent initiatives and commitment to member experience can be found in the 2018 Funded Status Report, Building for the Future.


With net assets of almost $20 billion, OPTrust invests and manages one of Canada's largest pension funds and administers the OPSEU Pension Plan, a defined benefit plan with almost 95,000 members and retirees. OPTrust was established to give plan members and the Government of Ontario an equal voice in the administration of the Plan and the investment of its assets through joint trusteeship. OPTrust is governed by a 10-member Board of Trustees, five of whom are appointed by OPSEU and five by the Government of Ontario.
So, after a few months of waiting for the process to work its way through, Peter Lindley has been named president and CEO of OPTrust.

Mr. Lindley replaces Hugh O'Reilly who stepped down back in March under pressure. I don't want to speculate as to why Hugh resigned but I was told by a very senior pension fund manager that OPTrust has a history of replacing its CEOs and the problem all stems from the governance of the Private Markets Group which apparently doesn't report to the president and CEO but to OPTrust's Board directly (a strange legacy issue which if true, needs to be rectified ASAP).

All I know is before Peter Lindley, Hugh O'Reilly lasted the longest in that position as his predecessors, Bill Hatanaka and Stephen J. Griggs lasted three years and less than a year in that role respectively.

In fact, Griggs sued OPTrust for wrongful dismissal, alleging he was terminated after trying to rein in “lavish spending” at the fund’s autonomous and high-flying private equity investment group.”
“The former CEO of the Ontario government’s employee pension fund has filed a wrongful dismissal lawsuit, alleging he was terminated after trying to rein in “lavish spending” at the fund’s autonomous and high-flying private equity investment group”:

“Mr. Griggs’ lawsuit alleges he was fired after members of the fund’s private markets division lobbied for his dismissal because they were angered by his attempts to review their operations and curtail the division’s “lavish spending”. He alleges he was trying to bring the private markets team under more centralized control because it was operating with little oversight.”

“The lawsuit says the fund’s private management group or PMG had little oversight and could make any size investment without board approval. It has separate computer and data systems, and “in effect operated as an autonomous entity”.
Anyway, that's all in the past and has nothing to do with the current PMG or Peter Lindley who I'm sure was aware of these issues before signing with OPTrust (and in all likelihood, signed an iron clad contract with a great golden parachute in case he's dismissed prematurely or without cause).

Coming from State Street Global Advisors, Lindley has tremendous investment experience heading up investments there but I'm glad he's also a strong advocate for defined benefit plans and will continue the work Hugh O'Reilly did advocating for DB plans (a very important part of the job).

The biggest difference between State Street and OPTrust is that Mr. Lindley will be interacting more with his clients, OPTrust members, and there will be a direct purpose to the work he'll be doing making sure OPTrust maintains its fully funded status.

In regards to this funded status, it's worth noting that unlike Ontario Teachers', HOOPP and CAAT Pension Plan, OPTrust and OMERS still offer guaranteed indexation which is something I don't recommend (conditional inflation protection is fairer risk sharing across active and retired members and offers the former plans a lever to get back to fully funded status if they experience a deficit again).

At OPTrust, Peter Lindley is surrounded by a solid team which includes James Davis, its CIO. James isn't only knowledgeable on investments in general, he's particularly honed in on responsible investing and takes climate change risks very seriously. For example, go read my comment on OPTrust's climate-savvy project.

[Note: Katharine Preston, the former Director of Responsible Investing at OPTrust recently joined OMERS where she is Vice President, Sustainable Investing (good for her, she's a very smart lady who really knows her stuff.]

Anyway, I put in a call to OPTrust and would like to speak to Peter Lindley once he settles in to his new role. I wish him much success and look forward to covering OPTrust more closely again.

In other big news, Ontario Teachers’ COO, Rosemarie McClean, is leaving that organization to spearhead the United Nations Pension Fund:
Ontario Teachers’ Pension Plan Chief Operating Officer Rosemarie McClean announced this week that she will be leaving the pension after a 33-year tenure to serve as the chief executive officer of the United Nations Joint Staff Pension Fund. McLean will succeed Janice Dunn Lee, the acting CEO for the UN pension.

In her position at OTPP, McClean leads all operational activities, including management of financial operations for the pension’s investments and portfolio management activities, information technology, process improvement, and project management.

She joined the pension in 1986, and has since simultaneously served as a board member for Alberta Pensions Services Corp., the Toronto Financial Services Alliance, and Heartland Dental, an Illinois-based dental service organization supporting over 800 dentists.

“I have been very fortunate to spend the majority of my career at such a great organization as Ontario Teachers’. The people here are truly exceptional. It has been an honour working with such dedicated teams, who come to work each day with the clear mission of providing excellent service and retirement security to teachers in the province of Ontario,” said McClean.

Her departure comes as the pension’s CEO, Ron Mock, is set to retire at the end of the year. In July, the plan named Jo Taylor as its new CEO and president effective Jan. 1, 2020.
In a classy move, Ontario Teachers' congratulated Ms. McClean on being appointed CEO of the United Nations Joint Staff Pension Fund:
Ron Mock, President and CEO of the Ontario Teachers' Pension Plan (Ontario Teachers') today announced that Rosemarie McClean, Chief Operating Officer, Enterprise Operations, is leaving at the end of 2019 to become CEO of the United Nations Joint Staff Pension Fund, effective January 1, 2020.

"Rosemarie has been with Ontario Teachers' for 33 years, and every part of the Plan has been positively influenced by her expertise and hard work," said Mr. Mock. "In addition to being enormously smart and capable, Rosemarie is a genuinely caring person who has always put our members first. We are thrilled for her as she embarks on this very exciting and impactful next phase of her career."

Rosemarie joined Ontario Teachers' in 1986 and since then she has taken on bigger and broader mandates, leading to her current position as COO, Enterprise Operations. During her tenure she has been instrumental in shaping the Member Services strategy and introducing award-winning programs and efficiencies. She has also helped enable the business through a stronger technology foundation and enhanced innovation and collaboration.

"I have been very fortunate to spend the majority of my career at such a great organization as Ontario Teachers'. The people here are truly exceptional. It has been an honour working with such dedicated teams, who come to work each day with the clear mission of providing excellent service and retirement security to teachers in the province of Ontario," said Ms. McClean.

Ms. McClean's final day at Ontario Teachers' will be December 31, 2019. Ontario Teachers' is evaluating next steps regarding the many areas for which Ms. McClean is currently accountable.
Working 33 years at any pension plan, let alone Ontario Teachers', is a feat in and of itself.

I don't know much about Rosemarie McClean except that she's extremely professional and obviously has tremendous experience. I did introduce myself via email and have already put her in touch with a contact of mine to help her navigate her way through the United Nations which is a great place to work but fraught with politics.

Hopefully Rosemarie McClean won't have to deal with too much politics and focus exclusively on running the United Nations Joint Staff Pension Fund which was established in 1948, by a resolution of the General Assembly, "to provide retirement, death, disability and related benefits for staff upon cessation of their services with the United Nations, under Regulations that, since then, have been amended at various times."

As an independent inter-agency entity, the Fund operates under its own Regulations as approved by the General Assembly and, in accordance with its governance structure, is administered by the United Nations Joint Staff Pension Board, which currently consists of 33 members, representing the 24 member organizations that are listed here.

Here is a quick snapshot of the UN Pension Fund:

As you can see, there are more than 126,000 members, more than 71,000 retirees/ beneficiaries and over $50 billion in assets. Here is a more detailed profile:

Ms. McClean will be responsible for a staff of 272 people from 54 countries, 60% of which are women:

It's been a while since I read a report on the UN Pension Fund but I did quickly skim through the Annual Report 2017 (the latest one) which is available here.

I also read the latest quarterly newsletter available here which provides a message from the acting CEO, Janice Dunn Lee, and a message from the Representative of the Secretary-General (RSG) for investment of UNJSPF assets, Sudhir Rajkumar.

In terms of the funded status, I found this in the latest financial statements but it's clear after the plunge in yields this year, the UN Joint Staff Pension Fund is back in the red:

Still, Rosemarie McClean knows all this having worked at OTPP for over 30 years, she will bring invaluable experience/ knowledge to the UN Joint Staff Pension Fund and help it weather the storm ahead (and there will be a storm ahead).

I wish Rosemarie all the best as she prepares to embark on this exciting new role, the final chapter in her long and great career.

Lastly, I learned Nathalie Bernier, Senior Vice President, Strategic and Business Planning and Chief Financial Officer of the Public Sector Pension Investment Board (PSP Investments) has left the organization.

I do not know the details but La Presse had an article over the weekend discussing a major reorganization at PSP. The article is in French but it states Ms. Bernier was hired by André Bourbonnais, PSP's former CEO, back in September 2015 and she was also named Canada's CFO of the Year for 2018 and played an instrumental role at PSP during a transformational period.

La Presse also states that Alain Deschênes, Senior Vice President & COO at PSP, left the organization after six years at PSP.

PSP did not release any details but in an email to La Presse it stated there was a reorganization that took place to "improve operational efficiency" and the roles of CFO and COO were abolished (very strange if you ask me and raises serious concerns). David Scudellari, Senior Vice President and Global Head of Credit Investments, is now acting as the Interim Chief Financial Officer.

Any way you slice it, the optics certainly don't look good because Ms. Bernier is well-known, a highly qualified top CFO, she's a woman (PSP needs more women in senior roles) and she really helped the organization during a difficult transition period.

Of course, I don't have all the details and sometimes these reorganizations at senior levels are needed. I'm just stating that the optics look terrible but again, I'm not privy to all the information and knowing Neil Cunningham, he doesn't make these decisions on a whim.

Anyway, I wish all three individuals the best of luck with their new endeavors (I'm sure Ms. Bernier will fall back on her feet very soon in a senior role) and this concludes my comment on the big moves at OPTrust, OTPP and PSP.

Below, a clip on the United Nations Joint Staff Pension Fund. Who does it serve? What is its purpose? Learn about the Pension Fund that secures the retirement of the people who serve the world as international civil servants. Its members are very lucky Rosemarie McClean will be heading up this pension soon.

Also, David Kostin, Goldman Sachs chief US equity strategist, joins "Squawk on the Street" to discuss the current state of the markets and how much he expects the fed to cut rates.

Lastly, equity markets appear optimistic about trade, and the bond market has high hopes for a rate cut when the Fed meets in September. Matt Toms, chief investment officer of fixed income at Voya Investment Management, joins "Squawk Box" to discuss.