Ontario Teachers' unique governance structure is a key reason for our success. At the heart of our model is a strong, independent Board that ensures Ontario Teachers' is run like a business. Equally important is our joint sponsorship arrangement that gives members and the government shared responsibility for funding the pension plan.
Role of Plan Sponsors
The pension plan is jointly sponsored by the Ontario government, through the Minister of Education, and the executive of the Ontario Teachers' Federation (OTF). The OTF represents teachers, while the government represents employers.
OTF and the government are equally responsible for ensuring the pension plan has enough money to meet its long-term pension obligations. In addition, they appoint experienced, professional experts to the pension plan's Board.
Through a six-member Partners' Committee, the sponsors jointly:
- Set benefit levels
- Establish the contribution rate paid by working teachers (which is matched by the Ontario government and other designated employers)
- Decide how to address funding shortfalls or use surplus funds when they arise
Members of the Partners' Committee do not sit on the plan's independent Board
Role of the Board
A eleven-member Board, appointed by OTF and the government, oversees the management of the pension plan. Board members are required to act independently of both the plan sponsors and management, and to make decisions in the best interests of all plan beneficiaries.
Day-to-day investment management and plan administration is delegated to the President & CEO and his staff.
Read more about our Board's Oversight Role.
Role of Management
Employees of the pension plan have three key responsibilities:
- Invest the plan assets to help pay pensions
- Administer the pension plan and pay pensions
- Report and advise on the plan's funding status and regulatory requirements
No employee sits on the Board or its committees.
Governing Legislation and Policies
Ontario Teachers' is a corporation (without share capital). We are governed by the Teachers' Pension Act and must comply with Ontario's Pension Benefits Act, the federal Income Tax Act and other legislation that applies to registered pension plans in Ontario. We must also comply with legislation in jurisdictions where we do business.
The Pension Benefits Act requires pension plan administrators to invest assets with the same prudence expected of a person dealing with another's property. The standards of conduct for a fiduciary are also set out in common law.
A Partners' Agreement between the plan sponsors sets out the terms of joint management, including the powers and duties of the plan's independent Board. The sponsors have appointed the Board as trustee of the plan's retirement compensation arrangement, which supplements the basic defined benefit pension plan.
Our Statement of Investment Policies and Procedures defines our investment strategy and long-term asset mix policy.
As an investor, we believe good governance is good business because it helps companies deliver long-term shareholder value. As a plan administrator, we measure ourselves against standards for governance, internal controls and risk management that reflect best corporate practices and the highest standards of stewardship.
Detailed information on plan governance is included in our annual report.