Faculty & Administration Pension Plan and Support Staff Pension Plan Annual General Meeting June...
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Transcript of Faculty & Administration Pension Plan and Support Staff Pension Plan Annual General Meeting June...
Faculty & Administration Pension PlanandSupport Staff Pension Plan
Annual General Meeting
June 2006
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Governance Overview and Financial Report – Chair, Pension Committees
Pension Plan Investments – Mercer
Report from Custodian and Record keeper – Sun Life Financial
Open Forum- Member comments and questions
Members’ Luncheon
Agenda
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Pension Assets $96.5 million - March 31, 2006
Saint Mary's University
$77.1
$19.4
$67.8
$16.1
Faculty andAdministration(477 members)
Support Staff(358 members)
2005
2006
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Both plans have a substantial portion of membership in mid-career (age 35 to 54: F&A 60%, SS 67%). At the extremes of the distribution – the F&A group has more older members (F&A 29%, SS 16%) and the SS group has more younger members (F&A 11%, SS 17%).
Member Age Distribution - March 31, 2006
Saint Mary's University
Faculty & Administration Pension Plan Support Staff Pension Plan
0%
3%
8%
13%
16% 16%15%
13%13%
3%
20 -
24
25 -
29
30 -
34
35 -
39
40 -
44
45 -
49
50 -
54
55 -
59
60 -
64
65 -
69
2%
5%
10%
13%
19% 18%17%
11%
3%2%
20 -
24
25 -
29
30 -
34
35 -
39
40 -
44
45 -
49
50 -
54
55 -
59
60 -
64
65 -
69
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Investment Style Distribution - March 31, 2006
Saint Mary's University
Faculty & Administration Pension Plan Support Staff Pension Plan
2%
12%
56%
28%
2%
Conservative Moderate Balanced Growth Aggressive
3%
10%
64%
19%
4%
Conservative Moderate Balanced Growth Aggressive
The above distributions show the proportion of members in the various asset allocation portfolios (86% of plan members at SMU use the portfolios).
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The above charts show the proportion of pension assets in the various investment funds (100% of plan assets – includes the SMU portfolios and other investment choices)
Investment Style Distribution - Asset Mix - March 31, 2006
Saint Mary's University
Faculty & Administration Pension Plan Support Staff Pension Plan
Cdn Equity35%
ForeignEquity23%
Fixed Income27% Guar/Money
Mrkt15%
Cdn Equity36%
ForeignEquity24%
Fixed Income29%
Guar/MoneyMrkt11%
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CAP Guidelines AssessmentBenchmarking the current practices of the SMU Pension Plans
The Joint Forum of Financial Market Regulators, on May 28th, 2004, released the Capital Accumulation Plan (CAP) Guidelines.
The CAP Guidelines are intended to outline and clarify the rights and responsibilities of sponsors, service providers and members; and to ensure that members are provided the information and assistance that they need to make investment decisions in a capital accumulation plan.
The CAP Guidelines were developed by the pension industry to represent best practices.
The SMU pension plans were 100% compliant with the guidelines by the deadline on December 31, 2005.
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CAP Guidelines Assessment – Plan Governance
governance statement formalized organizational structure approved retirement committees established insurance and indemnification in place mission and goals documented terms of reference established pension benefit adequacy assessed - need to do analysis to confirm committee meetings occur regularly minutes documented and approved plan text updated and filed with regulator professional agents employed sufficient operating funds provided periodic reporting to Finance Committee member communication policy established delegation and monitoring of functions carried out internally formally documented
Plan governance is the process of implementing an effective control system to oversee the proper operation of the CAP. Key elements include defining the purpose of the CAP, ensuring effective documentation of all roles and responsibilities, legal requirements and support materials. Where key functions are to be delegated, the terms of the delegation should be documented and an effective monitoring system should be in place.
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The structuring and on-going assessment of an appropriate investment offering is critical to the success of a CAP. The investment structure should consider the nature of the CAP and the membership base. The structure should offer sufficient choice to enable members with different tolerances to risk and different return requirements to structure an optimal portfolio. The complexity of the investment structure should be managed so as to ensure that it can be communicated effectively to CAP members.
CAP Guidelines Assessment – Investment
comprehensive investment policy approved, annual review established investment policy and performance benchmarks regularly reviewed independent performance monitor engaged, Mercer HR Consulting qualitative assessment of investment managers reviewed range of investment choices is offered investment choices aligned with purpose of the CAP members control investment of employee and employer contributions members can easily make changes to investment choices investment decision-making tools provided to members default investment option has been established regular meetings with the investment alliance manager, Sun Life
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It is necessary to perform a periodic re-assessment of the recordkeeper to ensure that it continues to meet the original selection criteria and the standards outlined in the fees and services agreement. In the event that the recordkeeper no longer meets the needs of the CAP, quick action should be taken to remedy the situation. The level of fees borne by members will have a significant impact on member balances, and members should understand the level and what is included in the fees paid by them.
CAP Guidelines Assessment – Administration
engaged Sun Life Financial as recordkeeper Management services Plan member records and statements Customer service helpline Internet site Interactive software
recordkeeper service level established fees and service agreement in place fees compliance monitored formal system for monitoring the recordkeeper established full fee disclosure review member termination documentation periodically document retention policy adopted
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Having a clearly documented communication strategy helps to ensure that members receive accurate and timely communication. CAP members must be provided with information on their CAP account and the performance of the investment funds available in the CAP, as well as access to additional information upon request. All communication materials must be adequate and understandable, and provide CAP members with sufficient detail about available investment options so they can make informed investment decisions, using the tools available to them.
CAP Guidelines Assessment – Communication
member sign-up process new member orientation sessions periodic updates from Chair annual general meeting of members quarterly statements mailed directly to members pension plan website and information call centre regular written materials tools provided for decision-making communication strategy established for the CAP member booklet revised formal process for assessment of member information needs review process documented for communication materials in the communication policy
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Investment Performance Comparison - Canadian Equity Fund
Saint Mary's University
Year ended April 2005
25.7%
18.4%
Jarislowsky Fraser BGI
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Investment Performance Comparison - Canadian Equity Fund
Saint Mary's University
Year ended April 2005 Year ended April 2006
25.7%
18.4%
Jarislowsky Fraser BGI
23.7%
35.5%
Jarislowsky Fraser BGI
BGI information from Mercer monitor report 3-yr. average Mar. 31, 2006 = 28.9% top quartile performance compared to Mercer Pooled Fund Universe Strategy has above-average prospects to outperform Investment process, research, and professionals provide a competitive advantage
BGI fees are relatively low
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Pension Plan – education opportunities for plan members
Sun Life Information Sessions Plan member website training Retirement planning tool training
Financial Partners Information Sessions RBC – Estate Planning Scotia Private Client Group – Planning for Retirement
Information tailored to members nearing retirement Two small group sessions specific to SMU (Mercer) One-on-one consulting – first session paid by SMU Book purchase on retirement lifestyle
HR Department orientation sessions for new members
Canada Pension Plan session
Pension Website (SLF and SMU)
Quarterly statement inserts
Annual General Meeting
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Pension Plan – financial/budget report
The pension committees have adequate funding to operate effectively:
Operating funding $65,000 annual budget provided by SMU 2005/06 expenses $67,000 ($2,000 deficit)
(pension consulting, member meetings and training, investment monitoring, information return to pension superintendent, member communication)
Accumulated reserve for pension administration
increased from $71,000 to $72,000
($71,000 - $2,000 deficit + $3,000 interest)
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Committee Support Services (non-voting):
Advisor, Internal - Ron Cochrane (Director of Finance)Committee Secretary - Janine Rose (Pension & Benefits Officer)Pension Consultant - Karen Henderson (Mercer HR Consulting)
Support Staff Pension CommitteePension Plan #1395-02: 358 members, $19.4 million assets
Nova Scotia Government Employees Union (1)
appointed by NSGEU- David Lane (Astronomy & Physics)
International Union of Operating Engineers (1)
appointed by IUOE- Robert MacDonald (Facilities Management)
University, ex officio (2)
Vice-President, Finance & Director of HR- Larry Corrigan (Financial Services)- Kim Squires (Human Resources)
Senior Administrator (1)
appointed by President- Keith Hotchkiss (Student Services)
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Committee Support Services (non-voting):
Advisor, Internal - Ron Cochrane (Director of Finance)Committee Secretary - Janine Rose (Pension & Benefits Officer)Pension Consultant - Karen Henderson (Mercer HR Consulting)
Faculty & Administration Pension CommitteePension Plan #1395-01: 477 members, $77.1 million
Saint Mary's University Faculty Union (5)appointed by SMUFU- Darryl Bruce (Psychology)- Walt Finden (Mathematics)- Lori Francis (Psychology)- J eff Power (Accounting)- Nicola Young (Accounting)
Administrative/Professional Group (1)elected- Kevin Webb (Manager, Financial Planning)
University, ex officio (2)VP Finance & Director of HR- Larry Corrigan (Vice-President, Finance)- Kim Squires (Director, Human Resources)
Senior Administrator (1)appointed by President- Keith Hotchkiss (Director, Student Services)