Opening Statement



Friday, 8 April 2016

OTPP AGM: Engaged Investors Etc!



Here's some notes on last night's OTPP [Ontario Teacher Pension Plan] AGM 2016 at the Carlu on Yonge St. here in Toronto. There was a good turn out of active and retired members. Generally speaking with a preponderance of our older [er ... mature?!] ones. The board presented their annual report, held a Q+A, then a mix and mingle. Afterwards, many of us socialized with our colleagues downtown. I had the pleasure of meeting up with OECTA TSU.

Our teacher pension fund is doing very well, for which the members were quite appreciative. I've already reported on the glowing facts and figures in my April Teacher Free Speech News Y Views [LINK] OTPP

I sensed many of us were cautious in wanting to question what would seem to be a winning formula, by a winning team. True enough -poverty sucks! We are doing quite well, thank-you! 

However, that isn't to say that we shouldn't ask more questions and talk about the issues among ourselves though. It's ours! We all want the best possible Ontario Teacher Pension Plan, a goal that is surely shared by the fine leadership we seemed to see on display last night. 

All in all a fairly interesting Q+A ensued. Still, here's a few interesting talking points that stuck out for me. I regret I didn't get all your names, nor will I mention all the many, different, questions asked. Please feel free to add anything I've missed in the Comments section below my blog.


We met the OTPP board and many if not most of the top executives. I had to wince. There isn't much diversity, except that white women are now included in the mix. We of course want the best possible people working for us, regardless of their race, sex, creed etc. etc. etc. But I had to wonder what our board is doing to help provide a level playing field for developing more diversity at the corporate board level? 



The following link, from teacher member Sean O'Conner [Link] is interesting. On May 27, 2015 OTPP "voted against" a Shareholder Proposal Regarding Board Gender Diversity at the Exxon Mobil Corp. Had I known in advance, I might well have got up to ask why, and seek more specific info on the OTPP's policy on diversity within corporate boardrooms in general. Maybe next year!

Member Brian Young [] questioned the board on divestment of fossil fuels. Ethical investments are a big, growing concern for many progressive investors today. Basically, the members were told that OTPP does not believe divestment works but is actively involved in a "policy of engagement" to bring about change instead.



An example was provided of the big "Dong" company and the OTPP "policy of engagement", which quite frankly made me snicker, so let's just leave it at that! We could read into engaging others with the big Dong any number of ways, some not so good.[1] However, the board presented an "Engaged Investors" handout [PDF], that besides "Assessing Climate Change Risk", perhaps best explains the OTPP's "policy of engagement" as follows;
1. we integrate environmental, social, governance [ESG] factors into our processes;
2. we are responsible asset owners and engage regularly with companies and policymakers;
3.we expand our knowledge, deepen our understanding and evolve our practices;
4.we seek clear and relevant information from companies;
5. we collaborate with like-minded peers on responsible investing matters.
We believe engagement and dialogue with companies and policy-makers are essential to these principles. Exchanging information with companies and building constructive relationships with governments enables better analysis of long term investment risks and opportunities.
Divestment ends the relationship outright and eliminates our ability to influence stakeholders.
"Engaged Investors" then goes on to explain what the OTPP has done in 2015, and tell us what's in store for 2016 in "Engaging in Climate Change". I'm glad to see that our OTPP board has responded thoughtfully to our members pressing concerns over the issue of ethical investment. It has repeatedly been brought up over last few AGM's. As teacher professionals we, of course, want to see fair, equitable and just standards and practices increasingly and responsibly "incorporated" into the corporations where we invest our pension funds to build a better future, for all.



As such, Engaged Investors is an OTPP policy that we as members, with a healthy dose of modern skepticism, should monitor closely, to be sure the board's actions back up the fine words here. I also have to wonder: Realistically speaking, lobbying alone does not always work. With the worst offenders might not divestment still also be a valuable tool to show, when necessary, that our board is not just blowing hot air? With our concerns over fossil rights? Human and Labour Rights Violations? Etc?

On another point, member Frank Bruno arose to question when the OTPP will restore full indexation. According to the OTPP, the concessions we made a few years back when the fund dipped into the red has helped push us back into the blue, but we are not out of the rough economic waters yet, so to speak. I dare say, that a very dangerous hole was punched into inflation protection for future generations of teacher retirees. Our younger members in particular will need to monitor this very closely and push for full protection again, for your own good. 



It also strikes me as perhaps rather odd that despite all the gnawing fears and gnashing of teeth, our pension fund is miraculously doing just fine now thank you. But I leave that for others to connect the dots; whether it's all perfectly logical or not, in light of the concessions we had to make!

A visitor asked if other pension plans might plug into our OTPP winning formula. It was a humorous, moment of levity that raises a very good point. Why don't more professionals and workers have defined pension plans that work for them too, rather than their employer, the government or perhaps some off shore tax shelter investor? The direction forward on pensions for our Canadian union movement seems quite clear to me!

Finally, afterwards at the bar, I had an opportunity to briefly chat with our new OTPP Executive VP Bjarne Graven Larsen. Welcome him on board. Bjarne comes to us from Norway. I asked him whether the OTPP has considered investing in the burgeoning Canadian medical and leisure Marijuana Industry as it takes off. He said he wasn't unaware that the Canadian government had promised to legalize it before he arrived. In the short time he's been here, he can't recall the issue ever being discussed around the board table to date. Well, if we do eventually end up making kajillions off it, you will all know who thank, eh? ;-)

In solidarity!

David C



FOOTNOTE

[1]. Nor will I include a funny picture to illustrate! Harumph! This is a respectable blog site! Kinda sorta ...

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