New entity to provide investment management services to public organizations
An Investment Management Corporation of Ontario (IMCO) has been created in the province to will provide investment management and advisory services to participating organizations in Ontario’s Broader Public Sector (BPS).
Established July 1, 2016 by proclamation of the Investment Management Corporation of Ontario Act, 2015, IMCO will enable BPS organizations to lessen costs by pooling their assets. The larger fund is expected to lower administrative costs, which will help improve return on investments.
The government said in a statement that |” With this consolidated approach and creation of IMCO, Ontario is modernizing workplace pensions by providing a new tool for the investment of retirement savings.”
The founding members of the IMCO are the Ontario Pension Board (OPB) and the Workplace Safety and Insurance Board (WSIB). With combined investment assets of approximately $50 billion, these two institutions provide the scale to ensure IMCO’s success. IMCO is designed to accept, through a managed process, the membership application of any BPS organization with an investment fund that is interested in accessing its services.
Charles Sousa, Minister of Finance, said: “The Investment Management Corporation of Ontario will enable public-sector organizations to pool assets and create economies of scale. This will increase efficiency when providing pension support and income for injured workers. OPB and WSIB – and public sector pension plans that may join in the future – will benefit from IMCO’s ability to deliver enhanced services.” —
- Participation of public sector and broader public sector (BPS) organizations in IMCO will be voluntary.
- Members of IMCO will retain ownership of their assets and responsibility to determine how their assets are invested by IMCO.
- The Ontario Pension Board (OPB) is the administrator of the Public Service Pension Plan (PSPP), a major defined benefit pension plan sponsored by the Government of Ontario. PSPP membership is made up of employees of the provincial government and its agencies, boards and commissions. At the end of 2015, OPB had $23 billion worth of assets under management.
- The Workplace Safety and Insurance Board (WSIB) is an independent agency that administers compensation and no-fault insurance for Ontario workplaces. At the end of 2015, WSIB had $26.3 billion worth of assets under management.
- IMCO will be headquartered in Toronto, the second-largest North American financial services centre by employment after New York.
IMCO will not require financial support from the Ontario government or Ontario taxpayers and will operate at arm’s length from government as a member-based non-profit corporation. The creation of IMCO fulfills a commitment made in the 2015 Ontario Budget. It is expected to be operational by Spring 2017.
Three of the IMCO’s initial Board of Directors were appointed July 1 by the Minister of Finance, including David Leith as Chair. The WSIB and OPB have each appointed two Directors to the initial Board. The new board’s main priority will be to prepare the corporation to manage members’ funds in the spring of 2017. – CINEWS