JPAC report, October 24, 2004

To/Destinataire: CULE Executive From/Expéditeur: David Doyle Subject/Objet: JPAC Report

Attached you will find a written copy of the verbal report that I tabled on Saturday.

1 – The Psac Fund

Firstly the fund is sound, as you are aware, we have engaged three money managers to over see our investments each one having their own management style. UBS Global Assessment Management has the bulk of our investments, approximately 50%, KBSH Capital Management and Leith Wheeler both of whom have 25% each.

Our funds as with the rest of the markets have begun to emerge from two years of difficult times. An evaluation for the Regulatory bodies shows that we have an actuarial surplus of six million dollars. In part this is due to the fact that we have recently changed the underlying assumptions in the plan. Most of these assumptions were due for a change but unfortunately the changes occurred at a time when the JPAC were discussing the fact that the employer should begin to increase their contribution rates in order to offset the requirement for a sharp increase in a couple of years.

Instead the employer has indicated that they wish to set up a side fund into which they would contribute an amount of money on a yearly basis and when necessary they will place in the fund.

The unions oppose.

AEU has informed me that they are filing a complaint with the Ontario Pension Commission concerning the changes to the assumptions in the Plan. They asked if we were interested in pursuing this option, I indicated that I would need to see the actual complaint and that the CULE executive would have to review it.

2- Retirees Lawsuit

The lawsuit is proceeding and I will report more as the information becomes available.

3- Socally Responsible Investing

A great deal of thanks goes to Arthur Carkner for the work that he has done in this area, but I must report that progress has been very slow.

Progress has been made as follows:

a) in the area of proxy voting, we have engaged a west coast firm (Share) who has been representing our interests in the Corporate Boardrooms and on the floor of Shareholder Meetings.

b) in the area of fund management, we hope to meet with a number of fund managers who work with socially responsible investments, from this group we will choose a fund manager for 10% of our funds. (Pilot project)

c) in the area of social housing our efforts have to date been slow and we have missed a number of investment opportunities. Our legal advice is that we must set up a separate corporation to prevent any legal liability stemming from property investments.

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The results of the vote to have a vote are in: 94 eligible to vote (CULE I – 57/CULE II – 37) 59 Ballots cast 23 – No 36 – Yes Watch for more information to come.