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

Learn about the governance and legal structure for the Advantages Retirement Plan™ that puts plan members’ interests first

Learning Objectives

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

Key Insights

  • The Advantages Retirement PlanTM 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 PlanTM 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 PlanTM’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

 

When surveyed about what they wanted in a group retirement plan, OMA members prioritized the need for independent oversight and for a structure that put the needs of the physician community first. In response, OMA Insurance, as plan sponsor, has established an expert-led Investment Committee to develop and oversee the plan’s 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
  • Paul Healey
    • Emergency Physician, Oakville Trafalgar Memorial Hospital; Assistant Clinical Professor, McMaster University; Founder of “Physician Financial Independence (Canada)” online community; and Physician Financial Wellness speaker
  • Audrey Karlinsky
    • Family Physician Bedford FHO; Staff Physician Mount Sinai and Women’s College Hospitals, Toronto; and Assistant Professor, Department of Family and Community Medicine, 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 PlanTM members’ interests first with respect to the design and implementation of the plan’s investment program. The Investment Committee’s responsibilities include:

  • Reviewing the Statement of Investment Policies and Procedures (SIPP) at least once a year and providing any recommendations to evolve the Advantages Retirement PlanTM 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 PlanTM investment program in accordance with the Statement of Investment Policies and Procedures,
  • Determining how investment and annuity products are integrated for the Advantages Retirement PlanTM members, including default investment and annuity options, and
  • 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 PlanTM investment program and govern the implementation of the investment program.

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 PlanTM investment program for OMA Insurance Board approval.

The Statement of Investment Policies and Procedures sets out the Advantages Retirement PlanTM’s:

  • Scope and purpose
  • Core policies and procedures for the Advantages Retirement PlanTM 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 PlanTM’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; and
  • 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 Investment 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 member of the Advantages Retirement PlanTM, to ensure that 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 select the Advantages Retirement PlanTM’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 PlanTM’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 creditworthiness and Assuris program for the annuity provider)

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

  • Target date funds, which provides 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 PlanTM members, no matter how long they live or how investment markets perform

It is expected that 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 (info@omaisurance.com).