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Ontario Teachers' Pension Plan
Founded 1989
Headquarters Flag of Canada.svg Toronto, Ontario
Key people Jim Leech CEO[1]
Eileen Mercier, Chairman[2]
Industry Pension fund
Total assets $87.4 billion CAD (2008) [3]
Employees 700
Website www.otpp.com

The Ontario Teachers' Pension Plan (OTPP), commonly referred to as Teachers', is the organization responsible for administering pensions for public school teachers of Ontario. The OTPP also invests the plan's pension fund, making it one of the largest and most powerful investment groups currently operating in Canada. The plan is a multi-employer pension plan, jointly sponsored by the Government of Ontario and the Ontario Teachers' Federation.

Contents

History

The OTPP was established on December 31, 1989. Prior to this, Ontario teachers' pensions had been sponsored solely by the Ontario government. Assets of the plan had been invested in government bonds only.

Organization

Today, the OTPP administers the pensions for some 167,000 teachers, principals, and school administrators, and pays pensions to some 104,000 retirees.

The last President and Chief Executive Officer, Claude Lamoureux, had served in that capacity since OTPP's founding. Lamoureux retired on December 1, 2007 and was succeeded by Senior Vice President of Private Equity (aka Teacher's Merchant Bank), Jim Leech. The Chair of the Board is Eileen Mercier.

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Finances

The Ontario Teachers' Pension Plan is one of Canada's largest institutional investors having reported $87.4 billion in net assets on December 31, 2008.[4] It has an excellent track record for investment performance with an average annual return of 9.6% since it began investing in capital markets in 1990. It is the largest single-profession pension plan in Canada. Despite strong investment performance, the pension plan has experienced shortfalls in recent years, requiring contribution increases for working teachers. The plan reported a $2.5 billion funding shortfall as of January 1, 2009 in its most recent annual report.[5]

Corporate Governance

Teachers’ is a strong advocate of improved corporate governance in Canada and around the world. As a long-term institutional investor responsible for investing teachers’ pension contributions, Teachers’ believes that good governance standards and practices result in better long-term performance by companies, according to its website[6].

Teachers’ is a founding member of the Canadian Coalition for Good Governance[7] and the Institute of Corporate Directors[8]. It also participates in policy-making and the evolution of good corporate governance standards and practices through submissions to regulators and memberships in various global shareholder networks and forums.

An important right and responsibility of shareowners is to vote their proxies. Teachers’ votes its proxies according to a set of proxy voting guidelinesthat are reviewed annually and available on its website. These guidelines cover issues relating to boards of directors, management and director compensation, takeover protection and shareholder rights issues. To provide transparency on its proxy voting activities, Teachers’ also records and publishes its proxy votingproxy voting decisions on its website in advance of companies’ annual meetings.

Ownership

The OTPP maintains a prominent role as one of Canada's largest investors, owning investments across Canada. Through its fully owned subsidiary Cadillac Fairview, the OTPP owns properties including the Toronto-Dominion Centre, Toronto Eaton Centre, and the Rideau Centre in Ottawa. Through its investment arm, Teachers' Private Capital, the OTPP owns or has interests in companies such as Bell Canada (BCE), Samsonite, Maple Leaf Sports & Entertainment, Maple Leaf Foods, Parmalat Canada, Doane Pet Care, Shoppers Drug Mart, and Worldspan. In 2006 it acquired a 20% stake in CTVglobemedia.[9] In July 2007, Teachers' led a group to take over Canadian telecommunications giant BCE Inc. (Bell Canada) private. The C$35.1 billion deal (C$51.7 billion including assumed debt) would have been the biggest leveraged buyout ever in Canadian history and potentially the largest in global history, according to Thomson Financial.[10] However, the deal was officially cancelled on December 11, 2008.[11]

Media coverage

On the January 12, 2004 episode of the television show The Rick Mercer Report, comedian Rick Mercer had a short segment about the Ontario Teachers Pension Plan, in which he humorously contrasted the plan's benefactors (i.e. teachers) with the investments the plan had made, including shopping malls and the tobacco industry.[12]

On December 2, 2008, New York lawyer Marc Stuart Dreier was arrested at Teacher's Toronto offices and charged with impersonating, through his words and by the use of business cards, Mr. Michael Padfield, a senior lawyer with the pension plan. A secretary in the Teachers' offices had become suspicious and notified Toronto police who promptly arrested him. Dreier was attempting to close a sale of forged Teacher's promissory notes, worth $44.7 million USD, by meeting with the buyers right in the Teacher's offices.[13]

On December 4, 2008, Dreier was indicted by the United States Justice Department for successfully executing a similar corporate officer 'impersonation' routine, including bluffing his way into using the momentarily vacant CEO's office of one 'selling' firm for a meeting with the buyer, to sell forged financial instruments on at least two occasions in New York.[14]

References

  1. ^ Ontario Teachers' Pension Plan: Jim Leech
  2. ^ Ontario Teachers' Pension Plan: Eileen Mercier
  3. ^ Ontario Teachers' Pension Plan Fast Facts
  4. ^ "Fast Facts Ontario Teachers' Pension Plan Corporate Site". April-2009. http://otpp.com/wps/wcm/connect/otpp_en/Home/Investments/Fast+Facts/. Retrieved April-2009.  
  5. ^ "2008 Annual Report Ontario Teachers' Pension Plan Corporate Site". April-2009. http://70.35.24.107/otpp/ar_08/ar08_highlights.htm. Retrieved April-2009.  
  6. ^ Ontario Teachers'Pension Plan: Governance
  7. ^ Canadian Coalition for Good Governance
  8. ^ Institute of Corporate Directors
  9. ^ Ontario Teachers' Pension Plan (2 December 2005). "Woodbridge and BCE Announce New Ownership Structure for Bell Globemedia". Press release. http://www.otpp.com/web/website.nsf/web/bellglobemedia. Retrieved 2006-06-22.  
  10. ^ "Bidding for Bell Canada may not be over". USA Today. 2007-07-02. http://www.usatoday.com/money/economy/2007-07-02-1847004217_x.htm. Retrieved 2009-03-30.  
  11. ^ Kelly, Jason and Jonathan Keehner (2008-12-11). "BCE’s Buyout Collapses, Demands C$1.2 Billion Fee". Bloomberg.com. http://www.bloomberg.com/apps/news?pid=20601082&refer=Canada&sid=aP_AqrSsevUc. Retrieved 2009-03-30.  
  12. ^ Rick Mercer Report, CBC Television (12 January 2004). "Ontario Teachers Know All About Synergy". Press release. http://www.cbc.ca/mercerreport/backissues_jan12.html. Retrieved 2006-11-26.  
  13. ^ Cowan, Alison Leigh and William K. Rashbaum (2008-12-05). "Lawyer’s Arrest in Canada Has His Firm in Chaos". The New York Times. http://www.nytimes.com/2008/12/06/nyregion/06lawyer.html. Retrieved 2009-03-30.  
  14. ^ Copy of the indictment against Dreier

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