OMERS Governance Review Recommends Changing Dual Governance Structure
The Ontario government is being urged to rework an unwieldy governance structure at one of the province’s largest pension funds after representatives for police and firefighters complained of a breakdown in transparency and efficiency.
The province released the results late Wednesday of a review it commissioned last year to improve governance at the Ontario Municipal Employees Retirement System (OMERS), which manages $141-billion for 640,000 public-service workers.
Pension expert Robert Poirier, the special adviser chosen to lead the review, makes 33 recommendations to the Minister of Municipal Affairs and Housing, Rob Flack.
Chief among them is that the province should dissolve one of OMERS’s two boards, known as the Sponsors Corporation, and replace it with a new “sponsors council,” which would add five non-voting members to the 14-member body.
The change would eliminate the large and expensive corporate structure that supports the Sponsors Corporation, which has its own staff and fiduciary duties.
In its place, it would create a simpler, more streamlined council supported by the sponsors’ own resources. The council would be directly accessible to all of the plan’s members, giving them more visibility and input into how OMERS is governed.
That is expected to save OMERS an estimated $10-million each year and create a more focused and transparent leadership structure, the report says.
The report’s recommendations would preserve the current division of duties, with the Sponsors Corporation (SC) – or sponsors council, if that change comes to pass – setting the plan’s contribution rates and benefits for plan members, and an independent, 15-member Administration Corporation (AC) board administering the plan and investing its assets.
The unusual, two-tier board structure at OMERS dates back to a 2006 restructuring. In addition to setting contributions and benefits, the SC board has also been responsible for making appointments to the AC board.
“Faced with a governance structure that has failed to adapt and evolve since 2006, the proposed amendments in this report aimed to realign the governance model with its original intent,” Mr. Poirier said in the report.
The SC board has been the target of pension plan members’ complaints, which boiled over last year when some members felt blindsided by planned changes to contribution rates set to take effect in 2027. Some members such as police, firefighters and other higher-paid municipal workers will see contributions rise by $15 to $20 per pay period.
Several OMERS employers wrote to the government in June, 2024, claiming the current structure lacked transparency and fair representation and had become inefficient.
One of those complaints was from transit agency Metrolinx, where Mr. Poirier was a director. He is the chief executive officer of consulting firm NeuState Advisory and a former executive in the pensions division of asset manager State Street Corp. He was appointed to lead the review last August.
Mr. Poirier also recommends establishing minimum standards for communication, transparency, engagement and mandatory consultations with sponsors and other plan members.
He said his report’s recommendations are aimed at returning to “the foundational principle of pension governance as a collaborative agreement between employees and employers,” with both groups actively participating.
It is now up to the province to decide whether to implement the report’s recommendations – and which ones to tackle first. In a statement, the Ministry of Municipal Affairs and Housing said the review was intended “to strengthen trust, transparency, and accountability” at OMERS.
“After months of analyzing the plan’s governance and meeting with key plan employee associations and employers, Mr. Poirier’s full report is now publicly posted, and members are being engaged on the recommendations,” the statement said.
In a statement in response Mr. Poirier’s report, the Sponsors Corporation said the current dual structure “has been key to SC improving access, enhancing security and preserving fairness for members and employers.”
“There are significant changes in governance in this report. Whether these changes add strength to OMERS will be revealed over time.”
The chair of OMERS’s AC board, George Cooke, said in a statement that the report “sets the stage for a new chapter in OMERS governance” and “successfully balances” the core tenets of the legislation that created the pension fund with efforts to address the sponsors’ concerns.
“We are pleased to see that the report recognizes the importance of maintaining OMERS as a jointly sponsored pension plan and clearly delineates the accountabilities and respective roles of the administration and the sponsors,” he said.
The report recommends extending Mr. Cooke’s term as chair for another four years to oversee the transition. He has led the AC board since 2013. And it calls for a progress report to the minister by June, 2027, followed by periodic governance reviews starting five years from now and every 10 years after that.
The employee associations did not raise concerns about the performance of the AC board, OMERS’s investment performance or the fund’s capacity to pay pensions.
Robert Poirier's governance review report is available here.
Below, the overview and executive summary of the review:
Overview
Special Advisor Robert Poirier was appointed in 2024 to conduct a review of the OMERS governance model. The review was initiated in response to fairness, equity and transparency concerns raised by stakeholders who are part of the pension plan.
It had been more than a decade since the last review was undertaken in 2012. After extensive consultations with key plan employee associations and employers, the Special Advisor submitted his report to the government, including his findings and recommendations. The government is considering these recommendations and any future changes to the OMERS governance model would be informed by this report in a manner that supports the plan’s long-term sustainability.
The government will not be making any changes to contribution rates, plan benefits or the supplemental plan.
Below is an executive summary excerpt of the Special Advisor’s report.
Executive summary from the review
This 2025 OMERS Governance Review marks a critical juncture in the ongoing evolution of OMERS. Despite a more than decade-long window following the 2012 review, the steps to implement meaningful reforms have fallen well short. Rather than improving, the governance structure has become inward-looking and drifted further away from the fundamental objective of a jointly sponsored pension plan.
The Sponsors Corporation has increasingly operated within the confines of the Board and its affiliated corporation. This inward focus has significantly limited its engagement with the broader Sponsor and Non-Sponsor community and plan members, undermining transparency and accountability.
Faced with a governance structure that has failed to adapt and evolve since 2006, the proposed amendments in this report aimed to realign the governance model with its original intent. The return to the foundational principle of pension governance as a collaborative agreement between employees and employers — where both parties actively participate in negotiating the plan design, contribution levels and the types of benefits that best support members’ retirement security.
To address these challenges and restore alignment with the original purpose of a jointly sponsored plan, the report proposed the following key recommendations:
- maintain the current jointly sponsored, bicameral (two-entity) model
- maintain the current Sponsor representation and voting
- maintain the Sponsors’ statutory powers related to the ABCs (Appointments, Benefits and Contributions)
- replace the Sponsors Corporation with a new Sponsors Council
- establish an additional 5 non-voting members (Observers) in the Sponsors Council
- establish minimum standards in the act for communication, transparency, engagement and mandatory consultations with Sponsors and Non-Sponsors, (including other Non-Sponsor retiree groups), on specified changes
- enshrine the current 12-year board term limits in the act and allow for changes by regulations
- establish a transition period and increase the term limit from 12 to 16 years for the current Sponsor-appointed independent chair to oversee the transition
- establish a report back to the Minister of Municipal Affairs and Housing on the progress of the implementation and transition by June 2027
- establish a periodic governance review by the Minister of Municipal Affairs and Housing in 5 years from this review and every 10 years thereafter
In conclusion, this 2025 Governance Review presented a critical opportunity to restore trust, transparency and accountability within the governance model of one of the largest pension plans.
By embracing the recommendations in this report, OMERS can better serve its diverse membership, strengthen its long-term sustainability and reinforce its mandate to safeguard the retirement security of its members.
In his letter to Minister Flack, Robert Poirier notes:
Throughout this review, I have engaged extensively and frequently with an expanded spectrum of stakeholders, including the boards and executive leadership at OMERS Sponsors Corporation and Administration Corporation, retiree organizations, union and non-union leaders, employers, and pension experts. Our consultations have been widely praised by both labour and employer groups for their transparency, clear communication, and sincere engagement. The insights gained from these consultations were crucial in guiding the areas of focus and the development of the recommendations in this report.
I wish to sincerely thank the Ministry of Municipal Affairs and Housing for its support
throughout this process. I particularly want to acknowledge the exceptional contributions by the members of the Review Team, Jennifer Wong, Policy Manager, and Michael Beckett, Senior Economist, who have demonstrated professionalism, responsiveness, and dedication throughout this process and have played a critical role in the success of this review. I would also like to extend my appreciation to the Ministry of Finance for its valuable pension expertise and thoughtful input.
This report and its recommendations are intended to strengthen the OMERS’ governance model by identifying areas where it may no longer serve the best interests of plan members and organizations and aim to foster meaningful change that rebuilds accountability and regains the trust of its membership. I’m confident that the recommendations in this report will be of value to you and your Ministry as you consider next steps.
I would encourage you to read the entire report here, it's very well written, doesn't mince its words and provides clear guiding principles and recommendations to strengthen governance at OMERS.
For a pension governance wonk like me, this report is truly exceptional, setting the standard for others to follow in their governance review.
It reviews the current governance structure and exposes weaknesses and why OMERS is better off moving to a one board model that other Maple 8 pension funds have espoused.
When I covered Robert Poirier's governance review last year, I also expressed my doubts on OMERS two-tiered governance structure, stating "it's time to do away with this dual board which none of OMERS' large peers have (one is plenty)."
Lastly, I invite you to read the statement from George Cooke, Independent Board Chair, OMERS Administration Corporation:
Yesterday, the Ontario government published the report of the Special Advisor, Robert Poirier, following his review of the OMERS governance model.
This review was initiated more than a year ago by Ontario's Minister of Municipal Affairs and Housing, and the report sets the stage for a new chapter in OMERS governance. As OMERS Independent Board Chair, accountable to some 640,000 Plan members, I thank Robert Poirier for his work on this report.
In my view, the report successfully balances the heart of the 2006 OMERS Act which underlines the important role Plan sponsors play, with the governance concerns raised by Plan sponsors and stakeholders during the review in 2012 and most recently in late 2024. Those concerns included transparency in the Sponsors Corporation Plan design decisions, the lack of representation of some OMERS members and employers in the governance model, and the inefficiencies that come from the duplication of resources between the AC and SC.
From the start, the AC Board welcomed and fully cooperated with the review. The AC Board believes that decisions about Plan design and contribution rates should be in the hands of OMERS sponsors, acting on behalf of members and employers. We are pleased to see that the report recognizes the importance of maintaining OMERS as a jointly sponsored pension plan and clearly delineates the accountabilities and respective roles of the administration and the sponsors.
The report also recommends a course of action to address the unique and duplicative structure where OMERS is run by two corporations, two Boards and two management teams, as established in the 2006 Act.
We are pleased with the report’s vision that would provide additional stakeholder groups with visibility on governance matters and plan design decisions as well as the recommendation that sponsor representatives be able to freely share information and act directly on their constituents’ behalf.
The issuance of this report is a step forward in making OMERS governance better for our members, employers, sponsors, and stakeholders. More than 640,000 members and their families rely on this Plan as a source of stable retirement income, and we appreciate this work on their behalf.
George Cooke
Independent Board Chair
OMERS Administration Corporation Board of Directors
Background on OMERS governance:
OMERS is governed by two boards that lead two corporations – the Administration Corporation (AC) and the Sponsors Corporation (SC) – that oversee different elements of OMERS governance under distinct mandates:
AC Board
SC Board
The AC Board is responsible for administering the OMERS Plan, serving members and employers, and investing Plan funds globally.
The SC is responsible for determining benefit levels, setting contribution rates, and appointing the board members on both Boards.
| Great statement from George Cooke and I agree with the recommendation that his mandate be extended to oversee the implementation of all these recommendations once the government passes them. |
The story of OMERS keeps getting rewritten and with better and more streamlined governance, this organization will continue to deliver long-term value for its members.
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