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REQUEST FOR PROPOSALS
PENSION PLAN
OUTSOURCED CHIEF INVESTMENT OFFICER SERVICES, INVESTMENT ADVISOR SERVICES
and ACTUARIAL CONSULTING SERVICES
Dated: August 30, 2016
RFP No. 2016-310-02
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REQUEST FOR PROPOSALS
(“RFP”)
Pension Plan Outsourced Chief Investment Officer Services, Investment Advisor
Services, and Actuarial Consulting Services Introduction: The Toronto Port Authority (doing business as “PortsToronto”), is a federal government business enterprise operating pursuant to the Canada Marine Act and Letters Patent issued by the federal Minister of Transport. Governed by a nine member Board of Directors (the “Board”), PortsToronto owns and operates the Port of Toronto including Marine Terminals 51 and 52, the Billy Bishop Toronto City Airport, the Outer Harbour Marina and other related facilities. PortsToronto is the single employer for a federally regulated Defined Benefit and Defined Contribution Pension Plan (the “Pension Plan” or the “Plan”), a copy of the Plan text is included as Appendix A of this RFP. Administered by the Board, the market value of the Defined Benefit portion of the Pension Plan is approximately $45.1 million as at December 31, 2015 and the Defined Contribution portion of the Plan, which commenced in June 2014, is valued at approximately $95,500 as at December 31, 2015. There are approximately 173 retirees, 78 active employees and 17 deferred members in the Defined Benefit portion and 17 in the Defined Contribution portion of the Plan. The Board has appointed a Pension Committee (the “Committee”) to manage the day-to-day activities of the Pension Plan. The seven-member Committee is made up of two Board members, the President & CEO, the Senior Vice-President & CFO, a non-union representative, a union representative and a retiree representative. In addition to the day-to-day activities, the Committee makes recommendations to the Board on matters of Plan benefits and investments. Statement of Intent: PortsToronto is currently managing its Pension Plan using an investment advisor. As part of this RFP, PortsToronto is considering the alternative of using an outsourced chief investment officer or “manager to manager” model to make investment decisions on behalf of the Committee and Board of Directors. Accordingly, qualified proponents who can demonstrate high levels of professional competence and experience and provide comprehensive investment and policy advice may submit proposals to provide outsourced chief investment officer services (“OCIO”) and/or investment advisor services. PortsToronto is also seeking a qualified actuarial consulting services provider to provide comprehensive actuarial support in the administration of the Plan.
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The services being sought through this RFP are organized into three parts, as follows: PART A. Outsourced Chief Investment Officer Services PART B. Investment Advisory Services PART C. Actuarial, Reporting and Accounting Services Proponents have the option of submitting a proposal on Part A and/or Part B or Part C of this RFP or may elect to submit a proposal for both Parts A and C combined or Parts B and C combined. PART A. Outsourced Chief Investment Officer (OCIO) Objective: The OCIO shall assist the Committee and Board by providing strategic investment advice on all aspects of the Plan. Scope of Work: The OCIO is expected to provide all necessary, customary and required services for the investment of Plan assets. The OCIO will be responsible for managing the assets of the Plan within the agreed upon parameters set out by the Committee and Board, while the Board and Committee will continue to be responsible for the overall governance of the Plan. Without limiting the generality of the foregoing, the OCIO will provide the following services to the Committee and Board:
• serve in a fiduciary capacity to the Plan as the Plan’s principal investment decision maker;
• establish the asset mix for the Plan based on the liability profile and provide compliance verification to the SIP & P;
• develop, implement and manage a portfolio management plan including investment strategy, portfolio construction, risk management, and manager hiring, firing and rebalancing;
• ensure that the investment portfolio is managed in such a way as to optimize performance while
mitigating risk;
• review current investment strategies for the Pension Plan and recommend updates to the SIP & P;
• develop and implement innovative and alternative investment strategies, diverse asset mix of investments and options for increased market returns with consideration given to volatility;
• assess current investment plan structure and individual asset class portfolios relative to overall Plan
objectives and provide comparison against other pension plans, endowments and insurance funds across Canada;
• retain and evaluate and interpret the performance of the Fund Managers and the total Pension
Plan including developing objectives for the Fund Managers and performing comparisons against market indices and other Balanced Funds, in various classes of investments;
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• continuously monitor developments in the capital markets including current trends in key indices;
• provide a quarterly investment performance report and monthly updates and attend meetings of
the Committee and Board as requested to present the investment results and to provide analysis and commentary on the performance of the Fund Managers and the total Plan;
• provide notification to the Committee and Board of any exceptions to the Investment Policy and
Fund Manager mandates and monitoring Fund Managers to identify any change in investment style;
• be available to attend Committee and Board meetings to provide any other information or services
that may be requested by the Committee or Board, including Fund Manager searches and terminations;
• report on any developments regarding the pension industry or any other matter that may be
informative for the Committee and Board;
• provide education and advice on best practices, governance and compliance to the Board and Committee;
• be an independent and objective resource for all questions or issues concerning administration,
custody, managers, specialty mandates, market conditions and related topics pertinent to the Plan; and
• exercise the care, skill and diligence that can reasonably be expected of a prudent expert and
adhere to the CFA Institute's Code of Ethics and Standards of Professional Conduct.
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PART B. Investment Advisory Services Objective: The Investment Advisor (the “Advisor”) to the Pension Plan shall assist the Committee and Board in achieving the Plan’s short and long-term goals through the provision of sound investment advice. Scope of Work: The Advisor is expected to provide all necessary, customary and required services for recommending and monitoring the investments of the Pension Plan and adhering to the Statement of Investment Policy & Procedure (“SIP & P”), a copy of which is attached as Appendix B to this RFP. Without limiting the generality of the foregoing, the Advisor will provide the following services to the Committee and Board:
• recommend and present fund managers to fulfill the asset mix strategy;
• recommend objective solutions to generate enhanced investment returns while mitigating risk to the Pension Plan;
• review current investment strategies for the Pension Plan and recommend updates to the SIP & P;
• generate strategies and innovative investment techniques based on the Plan’s maturity and risk
tolerance;
• advise on alternative investment strategies, diverse asset mix of investments and options for increased market returns with consideration given to volatility;
• analyze the asset mix of investments held by the Fund Managers and the total Pension Plan and
provide compliance verification to the SIP & P;
• assess current investment plan structure and individual asset class portfolios relative to overall Plan objectives and provide comparison against other pension plans, endowments and insurance funds across Canada;
• evaluate and interpret the performance of the Fund Managers and the total Pension Plan;
• provide and comment on the overview of the capital markets and current trends in key indices;
• monitor objectives that have been set for the Fund Managers, including comparisons against
market indices and other Balanced Funds, in various classes of investments;
• provide a quarterly investment performance report and attend meetings of the Committee and Board as requested to present the investment results and to provide analysis and commentary on the performance of the Fund Managers and the total Plan;
• provide notification to the Committee and Board of any exceptions to the Investment Policy and
Fund Manager mandates and monitoring Fund Managers to identify any change in investment
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style;
• be available to attend Committee and Board meetings to provide any other information or services that may be requested by the Committee or Board, including Fund Manager searches;
• report on any developments regarding the pension industry or any other matter that may be
informative for the Committee and Board;
• identify search criteria for Fund Managers, evaluate the selection process and structure a smooth transition of funds;
• provide education and advice on best practices, governance and compliance to the Board and
Committee;
• be an independent and objective resource for all questions or issues concerning administration, custody, managers, specialty mandates, market conditions and related topics pertinent to the Plan and be available to attend any meeting of the Committee or Board if requested; and
• exercise the care, skill and diligence that can reasonably be expected of a prudent expert and
adhere to the CFA Institute's Code of Ethics and Standards of Professional Conduct.
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PART C. Actuarial, Reporting and Accounting Services Objectives: The Pension Plan Actuary (the “Actuary”) shall provide actuarial services for the Defined Benefit portion of the Plan, as well as reporting services with respect to requirements of the Office of the Superintendent of Financial Institutions (“OSFI”). In addition, the Actuary will provide the required annual accounting disclosures for the Pension Plan pursuant to International Financial Reporting Standards (IFRS), for reporting purposes to be included in the Annual Audited Financial Statements of the Pension Plan and PortsToronto (most recent versions attached as Appendix C). Scope of Work: The Actuary is expected to provide all necessary, customary and required actuarial services for the Defined Benefit Pension Plan, as well as administrative services and reporting required by OSFI for both the Defined Benefit and Defined Contribution portions of the Plan. Without limiting the generality of the foregoing, the Actuary will provide the following services to the Committee and Board:
• prepare actuarial reports, including Going Concern and Wind-up/Solvency calculations to determine valuations for the Pension Plan and the required Employer Normal Cost and Special contributions to the Plan as required;
• make recommendations on discount rates with respect to Going Concern calculations and inform
on the prescribed discount rates for the Wind-up/Solvency calculations;
• attend at least one Committee meeting each year to provide the Committee with the Plan Valuation calculations and the resulting Valuation and required contributions;
• filing of all necessary reports, returns and information to OSFI, as required;
• update the Committee on industry and legislative changes to federally-regulated pensions on an
ongoing basis and at least twice per annum;
• provide information to the Committee on membership data and other additional information as requested by the Committee, at least twice per annum;
• provide accounting information on both the Pension Plan and Other Benefit Plans in accordance
with the reporting requirements under International Financing Reporting Standards, to generate accounting entries and for disclosure in the Annual Audited Financial Statements of the Pension Plan and PortsToronto;
• review audited Pension Plan Financial Statements, including Notes;
• calculate and process documentation to commence benefit payments to retiring employees and
those that have left the employment of PortsToronto;
• provide estimates of deferred pensions for potential transfer via commuted value;
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• prepare annual member statements for Plan members by June 30 of each year;
• recommend and/or present and/or coordinate employee educational seminars on pensions and
retirement, as requested;
• prepare ad hoc reports and calculations, as requested; and
• general administrative duties;
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Invitation to Proponents: Proponents are invited to submit a proposal to provide the services described in either Part A (Outsourced Chief Investment Officer Services), Part B (Investment Advisory Services) or Part C (Actuarial Services) or both Parts A and C or Parts B and C. Proposals for Part A and Part B must include a detailed description of the proposed services as well as address all of the questions included in Schedule A hereof. Proposals for Parts C must include a detailed description of the proposed services along with the following:
1. A statement of qualification describing the services being proposed;
2. Identification of the individual(s) who will provide the services along with their professional credentials, capabilities and experience.
3. Details of direct experience in performing actuarial services for pension funds similar to the
Pension Plan;
4. Identification of deliverables, including the type of recommendations to be provided;
5. Other matters that the proponent believes should be addressed but which may not be reflected in this RFP;
6. Hourly rates by position, annualized overall flat or percentage fee, estimate of disbursements
and guarantee period of the fee structure.
7. Three (3) client references, including the names and contact information for the client’s senior officials.
*All proponents must complete and submit the form of Acknowledgement included on pages 13 and 14 of this RFP with their proposal. The above proposal components will form the basis of analysis in deciding upon the selected proponent. Presentation of Proposal: The proposal should be presented in a clear and succinct manner addressing each of the proposal components identified above. Hard copies of the proposal must be submitted on 8-½ x11 inch bonded paper, 10-point 11-point Arial or Calibri font format. Attachments, such as brochures and résumés of key personnel, should be included. An interview may be requested prior to award.
Proposal Validity: Proposals shall remain valid and open for acceptance by PortsToronto for a period of sixty (60) calendar days, following the due date for receipt of proposals.
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Submission of Proposal: Please provide four (4) hard copies plus one (1) additional copy in electronic format (on either compact disc or USB drive), in a sealed envelope, clearly identified as to contents and addressed to:
PortsToronto 60 Harbour Street Toronto, Ontario M5J 1B7 Attention: Alan J. Paul, Senior Vice President and CFO
The envelope containing the proposal and the proposal coversheet must clearly identify the Part or Parts of this RFP for which the proponent desires its proposal to be considered.
Proposals MUST be received NO LATER THAN 2:00 P.M. LOCAL TIME, on Tuesday, September 27, 2016. Proposals received after the above due date and time will not be considered. Contact Information: Any inquiries or questions regarding this RFP are to be directed to:
PortsToronto 60 Harbour Street Toronto, Ontario M5J 1B7 Attention: Janelle McCarthy, Corporate Secretary – Legal E-mail: [email protected]
Proponents are advised that all communications with PortsToronto related to this RFP must only be made in writing to the individual designated above. Subsequent to the publication of this RFP, contact with any individual at PortsToronto (other than through the designated individual noted above) with respect to this RFP by the proponent or any of its representatives will constitute grounds for disqualification. Inquiries: All inquiries or questions regarding this RFP are to be directed to the representative of PortsToronto specified herein. Inquiries must be received in writing (e-mail) no later than 12:00 p.m. (Toronto Time) on Tuesday, September 13, 2016. All inquiries received, and the answers as provided by PortsToronto will be provided to all proponents by way of written addendum, no later than 2:00 p.m. (Toronto Time) on Friday, September 16, 2016 without naming the source of the inquiry. Interviews: Proponents may be requested to attend an interview prior to contract award. PortsToronto is under no obligation to interview every proponent who submits a proposal and an interview shall not be construed as
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confirmation of contract award. Award: Any award resulting from this RFP shall be subject to PortsToronto Board of Directors’ approval. RFP Timeline:
Activity
Date
RFP Issued
August 30, 2016
Deadline to submit questions/inquiries September 13, 2016 at 12:00 p.m. local time
Response to questions/inquires, if any September 16, 2016 by 2:00 p.m. local time
Deadline for proposal submissions September 27, 2016 at 2:00 p.m. local time
Interviews
October 11, 2016 – October 14, 2016
Selection of Proponent The week of October 24, 2016* *Subject to change at the discretion of PortsToronto Note to Proponents: Proposals should be submitted in the format requested, preferably with an index. If a proponent feels that the conditions will restrict it unnecessarily in any way, it should so state in its proposal. Any deviation from the stipulated conditions should be given in detail with an explanation as to why such deviations are being proposed. PortsToronto reserves the right to accept any proposal as submitted without prior negotiations. It is the responsibility of the proponent to obtain clarification of the requirements contained herein, if necessary, prior to submitting a proposal. Each proposal will be evaluated solely on its content. Assessment of the proposal commences immediately after closing date. PortsToronto does not accept proposals submitted by facsimile transfer machines or electronic mail. PortsToronto reserves the right to accept or reject any or all proposals received or to cancel the RFP in its entirety, all without any right of recourse on the part of any proponent, and to seek clarification from one or more proponents on the contents of their proposal submission. PortsToronto will only make official modifications to the RFP process or the provision hereof through official addendum. Any oral statement or other representation from any source should not be accepted as binding, unless confirmed through an official written addendum. Copies of this RFP are available at www.portstoronto.com, www.merx.com or by contacting the designated individual noted above. If a proponent obtains this document by any other means, verification as to the accuracy of the document and receipt of any addenda shall be the sole responsibility of the proponent.
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General RFP Provisions: It is understood and agreed that: a) Nothing contained in or appended to his RFP, including any addendums thereto, shall oblige
PortsToronto to enter into any agreement with any proponent whatsoever or to make any expenditure or spend any monies whatsoever.
b) PortsToronto may amend the requirements and specifications set out in this RFP at its sole discretion. c) PortsToronto may cancel or withdraw this RFP, at any time, at its sole discretion. d) All documents provided by a proponent will be recognized as proprietary and will be held in confidence
by PortsToronto and not be released without the prior authorization of the proponent, unless required by law.
e) Proposal documents submitted by proponents become the property of PortsToronto and will not be
returned.
f) PortsToronto will not be liable for any costs of preparation or presentation of proposals, including presentations that may be requested by PortsToronto.
g) Proposals submitted shall be final and may not be altered by subsequent offerings, discussions, or
commitments unless the proponent is requested to do so by PortsToronto. h) In the event that a proponent is asked by PortsToronto to provide additional information that is beyond
a request for clarification, PortsToronto will assess the relevance of the request to others, and will exercise its sole discretion in determining whether or not to notify any, or all, proponents of the request and to provide an opportunity for other proponents to provide similar information.
i) Proponents will indicate in their submission the time period for which their proposal are firm.
Proposals shall be firm for a period of at least sixty (60) calendar days from the proposal submission deadline date.
j) PortsToronto will require any proponent selected to provide services to be free of any conflict of
interest and will expect the proponent to advise PortsToronto of any actual or potential conflicts of interest.
k) PortsToronto is not bound to accept any offer and may reject any or all proposals. l) PortsToronto reserves the right not to award a contract to the highest evaluated proposal or to any
proposal. m) All information provided by PortsToronto to a proponent shall be recognized as proprietary and held in
confidence by the proponent.
The proponent must certify acceptance of these General RFP Provisions by submitted a completed acknowledgment in the form attached hereto.
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Acknowledgement: I/We the undersigned, having examined the Request for Proposals (“RFP”) for Pension Plan Outside Chief Investment Officer Services, Investment Advisory Services and Actuarial Services including the General RFP Provisions provided therein and any appendices and addendums thereto, hereby submit this proposal to the Toronto Port Authority (doing business as PortsToronto). I/We hereby: 1. offer to provide services to PortsToronto, as described in this proposal as required in accordance with the RFP; 2. offer the terms as set out in this proposal including the pricing proposal for a period of at least 60 days from the closing date of the RFP or such longer period as specified in the proposal; 3. represent and warrant that in submitting the proposal or providing the services contemplated by the proposal that there is no actual or potential conflict of interest; 4. represent and warrant that in preparing the proposal, there was no actual or perceived unfair advantage due to the receipt of information regarding the RFP that to the best of my/our knowledge was not made available to other proponents; 5. certify that this proposal was independently arrived at without collusion; 6. authorize PortsToronto to conduct such investigation as it deems appropriate to verify the contents of the proposal; 7. certify, unless explicitly outlined in the proposal, that all pricing information is based on service provision which, at a minimum, fully meets all of the service standards as outlined in the RFP; 8. agree that in the event of acceptance of this proposal, I/we will enter contract negotiations with PortsToronto and upon entry into a contract with PortsToronto, I/we will commit to providing the full scope of services identified in the contract; and 9. agree that all responses and related materials become the property of PortsToronto, will not be returned and PortsToronto will not reimburse the proponent for any work related to or any travel or materials supplied in connection with the proposal. SIGNED this ____day of 2016
Signature Name and Title (Print) I have authority to bind the proponent. Company Name
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Acknowledgement (cont’d) Company Address Telephone No. E-mail Address Controlling or Managerial Relationships: Proponents must disclose all relationships with competing firms/fairness proponents that offer similar services where there may be a direct or indirect financial and controlling or managerial relationship. ____________________________________________________________________________________ ___________________________________________________________________________________________________________________________________________________________________________
Appendix A Pension Plan Text
November 26, 2014
PLAN TEXT OF THE PENSION PLAN FOR EMPLOYEES OF TORONTO PORT AUTHORITY Amended and Restated at May 24, 2014
November 26, 2014
PLAN TEXT OF THE PENSION PLAN FOR EMPLOYEES OF TORONTO PORT AUTHORITY Amended and Restated at May 24, 2014 TABLE OF CONTENTS Section Page 1. INTRODUCTION ............................................................................................................ 1 2. DEFINITIONS ................................................................................................................. 2 3. ELIGIBILITY AND MEMBERSHIP .............................................................................. 7 4. SERVICE .......................................................................................................................... 9 5. RETIREMENT PENSION ............................................................................................. 10 6. FORM OF RETIREMENT PENSION ........................................................................... 13 7. BENEFITS ON DEATH BEFORE RETIREMENT ...................................................... 15 8. BENEFITS ON TERMINATION OF SERVICE .......................................................... 18 9. BENEFITS ON DISABILITY ....................................................................................... 20 10. CONTRIBUTIONS ........................................................................................................ 21 11. AMENDMENT OR TERMINATION OF THE PLAN ................................................. 24 12. MISCELLANEOUS PROVISIONS .............................................................................. 26 13. ADMINISTRATION OF THE PLAN ........................................................................... 28 14. FUNDING OF THE PLAN ............................................................................................ 31 15. CONSTRUCTION ......................................................................................................... 33 J:\Toronto Port Authority\Pension\PlanDoc\Plan text as amended May 24, 2014.doc
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SECTION 1 - INTRODUCTION 1.1 This document is an amendment and restatement of The Pension Plan for Employees of
Toronto Port Authority. It reflects all amendments up to and including those that take effect as of May 24, 2014.
1.2 All benefits promised under the Plan, as specified prior to this amendment and
restatement, will in no way be diminished thereby and, benefits which were in the course of payment prior to the amendment and restatement will continue to be paid in accordance therewith.
1.3 The primary purpose of the Plan is to provide periodic payments to individuals after
retirement and until death in respect of their service as employees of Toronto Port Authority.
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SECTION 2 - DEFINITIONS The following words and phrases, when used in this Plan, have the following meanings unless the context clearly indicates otherwise: 2.1 “Account” of a Member under the Defined Contribution Plan means the account established
for each Member of the Plan containing all defined contributions made by each such Member, all Pension Fund contributions credited on behalf of such Member’s participation in the Defined Contribution Plan pursuant to Section 10 and the net investment returns attributable to that account pursuant to Section 14.4.
2.2 “Account Balance” means, for each DC Member’s Account, the sum of:
(a) the DC Member’s contributions credited to the Member in accordance with Section 10.1;
(b) the Company’s contributions credited to the Member in accordance with Section 10.4.2, and
(c) the net investment returns attributable to the DC Member’s Account pursuant to Section 14.4,
adjusted for any benefit payments made prior to one of the following dates, as applicable: (i) a Member’s retirement date, date of termination of employment or date of death,
whichever shall first occur; or
(ii) the date of amendment of the Plan; or
(iii) the date of discontinuance of the Plan; or
(iv) the date of consolidation or merger of the Plan with another plan,
2.3 "Act" means the Pension Benefits Standards Act, 1985, or any successor legislation, and regulations thereunder.
2.4 "Actuary" means the person, being a Fellow of the Canadian Institute of Actuaries,
appointed by the Pension Committee for the purposes of making actuarial valuations, recommending funding levels and performing actuarial analyses for the Plan.
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2.5 "Beneficiary" means the person or persons designated by a Member in writing to receive any benefits that may become payable under the Plan upon the death of the Member, other than those benefits that are required by the Act to be paid to the Member's Spouse.
2.6 "Company" means Toronto Port Authority. 2.7 "Commuted Value" means the value of the Member’s benefit entitlement under the DB
Plan, as determined by the Company with the advice of the Actuary and in accordance with the provisions of the Act and any other applicable legislation.
2.8 "Continuous Service" means the period of employment with the Company without regard to
periods of temporary interruption of employment due to approved leave of absence or layoff.
2.9 “Defined Benefit Limit” means $1,722.22 for the years from 1992 to 2003 inclusive,
$1,833.33 for 2004, $2,000.00 for 2005, and for years after 2005, one-ninth of the Money Purchase Limit, as defined in the Income Tax Act (Canada), for the year.
2.10 “Defined Benefit Pension”, referred to herein as “DB Pension”, means the pension benefit
defined in Section 5.1-5.3 if the benefits are provided under the Defined Benefit Plan. 2.11 “Defined Benefit Pension Fund”, referred to herein as “DB Pension Fund”, means the
portion of the Pension Fund other than the Defined Contribution Pension Fund. 2.12 “Defined Benefit Plan”, referred to herein as “DB Plan”, means the provisions of the Plan
under which a Member accrues benefits other than as described in the definition of the Defined Contribution Plan.
2.13 “Defined Contribution Pension”, referred to herein as “DC Pension”, means the pension
benefit defined in section 5.7. 2.14 “Defined Contribution Pension Fund”, referred to herein as “DC Pension Fund”, means the
portion of the Pension Fund comprised of the Accounts. 2.15 “Defined Contribution Plan”, referred to herein as “DC Plan” means the provision of the
Plan under which:
(a) specific accounts are maintained to which the Company contributes pursuant to Section 10.4.2 and
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(b) specific accounts are maintained to which Members contribute pursuant to Section 10.1
and
(c) benefits are determined solely with reference to, and provided by, the Members’ Account Balances.
2.16 "Earnings" means all salary or wages of an Employee in a year, including overtime pay and
other allowances paid to the Employee. 2.17 "Effective Date" means December 1, 1960. 2.18 "Employee" means a person employed by the Company. 2.19 "Excess Contributions" means the amount in respect of the DB Plan, if any, by which the
contributions made by a DB Member to the DB Plan (other than additional voluntary contributions), together with Interest thereon, exceeds 50% of the Commuted Value of the Member's DB Pension.
2.20 “Funding Agency” shall mean the original trustee, trustees or insurance company licensed
to transact business in Canada appointed by the Company to hold and to administer the Pension Fund and any duly appointed successor trustee, trustees or insurance company or any combination thereof.
2.21 “Funding Agreement” shall mean any agreement or agreements now or hereafter entered into between the Company and a Funding Agency governing the Pension Fund. 2.22 "Former Member" means a person who has either ceased membership in the Plan or has
retired from the Plan. In addition:
(a) “Former DB Member” means a person who has ceased membership in or retired from the DB Plan; and
(b) “Former DC Member” means a person who has ceased membership in or retired from the DC Plan;
2.23 "Interest" means interest credited on Members' required and additional voluntary
contributions at such rates as may have been declared by the Company up to December 31,
5
1986 and, in respect of interest credited after that date, at rates that are equal to or greater than the rates fixed in advance by the Superintendent of Financial Institutions.
2.24 "Locked-In Plan" means a plan to which a transfer of the Commuted Value of a Member’s
locked-in benefits in respect of the DB Plan, or the Member’s Account Balance is made. This can either be:
(a) another registered pension plan if such other plan permits acceptance of such transfers; (b) a registered retirement savings plan of the prescribed kind; or (c) an immediate or deferred life annuity that can be purchased from a life insurance
company. 2.25 "Member" means an Employee who has become a Member in accordance with Section 3
and has not ceased to be a Member. In addition: (a) “DB Member” means a Member entitled to benefits under the DB Plan, and. (b) “DC Member” means a Member entitled to benefits under the DC Plan.
2.26 "Normal Retirement Date" means the last day of the month during which the Member
attains
(a) age 60 for any female Member who has been continuously employed by the Company since January 1, 1971, and
(b) age 65 for any other Member.
2.27 "Pension Committee" means the committee appointed by the Company pursuant to
Paragraph 13.1.1. 2.28 "Pension Fund" means the consolidated assets of the Plan as invested from time to time
consisting of: (a) the Defined Contribution (DC) Pension Fund, and (b) the Defined Benefit (DB) Pension Fund.
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2.29 "Pensionable Earnings" with respect to a DB Member in a particular year means the Member's Earnings before 1994, and for 1994 and later years, the lesser of the Member's Earnings and 50 times the Defined Benefit Limit for the year.
2.30 "Pensionable Service" means those periods of Continuous Service as set out in Section 4. 2.31 "Pension" means, at a particular date, the amount of pension accrued by a Member under the
provision or provisions of the applicable Plan as of that date under the terms of the Plan that were then in effect.
2.32 "Plan" means The Pension Plan for Employees of Toronto Port Authority consisting of the
DB Plan and the DC Plan, as applicable.
2.33 "Spouse" with respect to a Member or Former Member means either:
(a) the person who is cohabiting with the Member or Former Member in a conjugal relationship at the relevant time, having so cohabited with the Member or Former Member for at least one year, or
(b) if there is no person described in (a) above, a person who is married to the Member
or Former Member or who is party to a void marriage with the Member or Former Member.
2.34 "Updated Earnings" with respect to a Member who was an Employee on January 1, 2000 or
who retired during 1999 means the average Pensionable Earnings paid to the Member in the five consecutive calendar years before January 1, 2000 in which such Pensionable Earnings were the highest.
2.35 “YMPE” means the Year’s Maximum Pensionable Earnings established each year under the
Canada Pension Plan as may be amended from time to time, or any superseding legislation. In the Plan, unless the context otherwise requires, words in the singular shall be construed as including words in the plural and conversely. The headings in the Plan are for convenience of reference only and are not to be construed as part of the Plan.
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SECTION 3 - ELIGIBILITY AND MEMBERSHIP 3.1 Any Employee who was a Member of the Plan on May 24, 2014 shall continue to be a DB
Member of the Plan. 3.2 An Employee who was not a Member of the Plan before May 24, 2014 shall join the DB or
DC Plan as follows:
(a) An Employee who is a member of CUPE Local 416 shall be eligible to join the DB Plan on the date six months after the date of becoming a full-time Employee, and shall be required to join the DB Plan on that date or on the first day of any month not later than the month following the Employee's 21st birthday
(b) Any Employee who is a member of CUPE Local 416 other than a full-time
Employee shall become eligible to join the DB Plan on the earliest date on which he or she has
(i) completed 24 months of Continuous Service, and
(ii) received Earnings at least equal to 35% of the Year's Maximum Pensionable
Earnings under the Canada Pension Plan in each of two consecutive calendar years after 1984.
Membership of such Employee in the DB Plan shall become effective on the date on which the Employee completes a form, prescribed by the Company, for application to membership in the Plan.
(c) An Employee who is not a member of CUPE Local 416, shall be eligible to join the
DC Plan on the date six months after the date of becoming a full-time Employee, and shall be required to join the DC Plan on that date or on the first day of any month not later than the month following the Employee’s 21st birthday
(d) Any Employee other than a full-time Employee who is not a member of CUPE Local
416 shall become eligible to join the DC Plan on the earliest date on which he or she has
(i) completed 24 months of Continuous Service, and
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(ii) received Earnings at least equal to 35% of the Year's Maximum Pensionable Earnings under the Canada Pension Plan in each of two consecutive calendar years after 1984.
Membership of such Employee in the DC Plan shall become effective on the date on which the Employee completes a form, prescribed by the Company, for application to membership in the DC Plan.
3.3 Notwithstanding Paragraph 3.2, the Plan does not apply to:
(a) Employees who are members of another pension plan in which the Company participate as an employer, or
(b) Employees who object to membership in the Plan because of their religious beliefs.
3.4. A person who has become a Member of the Plan shall continue to be a Member until the person retires, dies before retirement or terminates employment, or until the Plan is terminated, if earlier.
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SECTION 4 - SERVICE 4.1 Pensionable Service
Years of Pensionable Service shall mean the sum of the number of those years and complete months (expressed as a fraction of a year) during which a Member is a Member of the Plan.
4.2 Approved Leave of Absence
The period during which a Member is on leave of absence granted by the Company or any period of maternity, parental or compassionate care leave as defined under the Canada Labour Code , up to the maximum period(s) allowed by that statute shall be recognized as Pensionable Service under the DB Plan or the DC Plan, as applicable, provided that: (a) The Member elects to make contributions during such period, at the rate in effect at the
beginning of the period, and (b) Such period is an "eligible period of temporary absence" for purposes of the Income
Tax Act (Canada) and Regulations thereunder.
Notwithstanding the above and pursuant to the Income Tax Act (Canada) and its Regulations, approved leaves of absence that are counted as Pensionable Service pursuant to this paragraph shall be limited to a maximum of five years, subject to an additional period of up to three years in respect of leaves of absence that are periods of parenting as defined in the Income Tax Act (Canada).
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SECTION 5 - RETIREMENT PENSION 5.1 Defined Benefit Pension at Normal or Postponed Retirement 5.1.1 A DB Member who retires on or after the DB Member's Normal Retirement Date shall be
entitled to an immediate pension. 5.1.2 The amount of annual pension, payable in monthly instalments, to a DB Member who retires
in accordance with Paragraph 5.1.1 shall be equal to 2% of the DB Member's total Pensionable Earnings on and after the Effective Date, provided that the DB Member's annual pension for Pensionable Service from the Effective Date to December 31, 1999 shall not be less than 2% of the DB Member's Updated Earnings multiplied by the number of years of such Pensionable Service.
5.1.3 The pension payable under this Paragraph shall commence on the first day of the month
following the month of retirement, or the first day of December in the calendar year in which the DB Member attains 71 years of age (or such other date as required under the Income Tax Act (Canada)), if earlier.
5.2 Defined Benefit Pension at Early Retirement 5.2.1 A DB Member may elect to retire at any time within 10 years immediately preceding the DB
Member's Normal Retirement Date and to start receiving a pension, commencing on the first day of the calendar month next following such retirement, by submitting written application therefor to the Company on a form prescribed by the Company.
5.2.2 The amount of pension payable to a DB Member who retires in accordance with Paragraph
5.2.1 shall be equal to the amount of pension defined in Paragraph 5.1.2, reduced by 0.5% for each complete month by which the actual retirement date precedes the DB Member's Normal Retirement Date, provided that the amount of pension payable as a result of the reduction cannot be less than the actuarial equivalent of the pension available at the DB Member’s Normal Retirement Date.
5.2.3 Notwithstanding Paragraph 5.2.2, where a DB Member has attained age 55 during active
employment with the Company, and with the consent of the Company retires in accordance with Paragraph 5.2.1, the amount of pension payable to such DB Member shall be equal to the amount defined in Paragraph 5.1.2, reduced by 0.5% for each complete month, if any, by which the actual retirement date precedes the DB Member's 62nd birthday, provided that the
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amount of pension payable as a result of the reduction cannot be less than the actuarial equivalent of the pension available at the DB Member’s Normal Retirement Date.
5.3 Maximum Benefit 5.3.1 Notwithstanding anything contained herein, where a pension commences before 1992, the
annual pension payable in the first year of payment to a DB Member at retirement, termination of service or termination of the Plan, other than the portion of such pension payable under Paragraph 5.4 or 5.5, shall not exceed the lesser of (i) and (ii) as follows, or such higher amount as may be allowed under the Income Tax Act (Canada):
(i) 2% of the average of the DB Member's best three consecutive years' Earnings
multiplied by the number of years of Pensionable Service up to a maximum of 35 years; and
(ii) $1,715 multiplied by the number of years of Pensionable Service up to a maximum
of 35 years,
except that the above limitation will not apply to annual pensions of $300 or less per year of Pensionable Service.
5.3.2 Notwithstanding anything contained herein, where a pension commences in or after 1992,
the annual pension payable in the first year of payment to a DB Member at retirement, termination of service or termination of the Plan, other than the portion of such pension payable under Paragraph 5.4 or 5.5, shall not exceed the lesser of (i) and (ii) as follows:
(i) 2% of the average of the DB Member's best three years' Earnings multiplied by the
number of years of Pensionable Service, subject to a maximum of 35 such years before 1992; and
(ii) The Defined Benefit Limit for the year in which the payment of the pension
commences, multiplied by the number of years of Pensionable Service, subject to a maximum of 35 such years before 1992.
5.3.3 The annual pension payable to a DB Member at any time after the first year of payment
shall not exceed the amount determined in accordance with Paragraph 5.3.1 or 5.3.2, as applicable, multiplied by the ratio of the Consumer Price Index for the calendar year in which the pension is payable to the Consumer Price Index for the calendar year in which the pension commenced.
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5.4 Additional Voluntary Contributions
Upon a pension becoming payable under Paragraph 5.1 or 5.2, any additional voluntary contributions made by the DB Member, together with Interest thereon, shall, at the option of the DB Member, be either paid to the Member in a lump sum or transferred to a registered retirement savings plan on the DB Member's behalf. Such benefits shall be in addition to any other benefits provided by the Plan.
5.5 50% Rule
In addition to the other benefits provided by this Plan, a DB Member who retires pursuant to Paragraph 5.1 or 5.2 shall be entitled to the additional pension that has a Commuted Value equal to the DB Member's Excess Contributions.
5.6 Retirement from Defined Contribution Plan
A DC Member shall be deemed to retire for DC Plan purposes if the DC Member's employment with the Company ceases on or after the DC Member attains age 55, or on the first day of December in the calendar year in which the DC Member attains 71 years of age, or such other date as required under the Income Tax Act (Canada)), if earlier.
5.7 Retirement Benefit from Defined Contribution Plan
Upon retirement in accordance with Section 5.6, a DC Member shall be entitled to elect a transfer of their Account Balance, determined as of the date of distribution, to a Locked-In Plan. In the event that a DC Member who has retired in accordance with Section 5.6 fails to make a transfer election within the time required or permitted under the Act, the Company may, in its absolute discretion, transfer the DC Member’s Account Balance in such form as may be permitted under Act, including the purchase of a life annuity on behalf of the DC Member from a company licensed to provide annuities in Canada.
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SECTION 6 - FORM OF RETIREMENT PENSION 6.1 In the event of the death after retirement of a DB Member who leaves a surviving Spouse,
such Spouse shall be entitled to an annual pension, payable monthly, from the Plan of 66-2/3% of the pension that the DB Member was receiving from the Plan at the date of death, subject to the following conditions:
(i) if the surviving Spouse became the Spouse of the DB Member after the DB Member
retired, the Spouse shall not be entitled to the pension specified above;
(ii) if the surviving Spouse was born more than 15 years later than the DB Member, the pension to the surviving Spouse from the Plan shall be reduced to 60% of the pension that the DB Member was receiving from the Plan at the date of death; and
(iii) a Spouse's pension from the Plan shall cease upon the Spouse's death.
6.2 In the event of the death of any DB Member after retirement, without leaving a Spouse
entitled to a pension under Paragraph 6.1, or in the event of the death of a Spouse in receipt of a pension thereunder, the DB Member's dependent children shall be entitled to an annual pension (payable monthly) from the Plan of 66-2/3% of the pension that the DB Member was receiving from the Plan at date of death, subject to the following conditions:
(i) dependent children for the purposes of this paragraph are the DB Member's children
(including step-children and legally adopted children) who were, on the date of the DB Member's death, dependent on the DB Member for support and either under the age of 18 years or a full-time student;
(ii) children born after the DB Member's retirement shall not be entitled to the pension
specified above;
(iii) the children's pension from the Plan shall be allocated among all the DB Member's eligible dependent children in the proportions determined by the Pension Committee; and
(iv) the portion of the children's pension from the Plan payable to a child shall cease at
the later of the date on which such child attains age 18 or the date on which such child ceases to be a full-time student.
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6.3 If the total benefits provided after retirement to a DB Member and after his death under Paragraphs 6.1 and 6.2 are less than 60 times the monthly pension of the DB Member from the Plan, as calculated pursuant to Section 5, such pension of the DB Member from the Plan shall be continued or recommence being paid to the DB Member's Beneficiary until the difference has been paid. With the consent of the Pension Committee, the Commuted Value of such monthly payments may be paid in cash.
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SECTION 7 - BENEFITS ON DEATH BEFORE RETIREMENT 7.1 Death Before Eligibility for Early Retirement – Defined Benefit Plan 7.1.1 A benefit shall be paid to the surviving Spouse, if any, or to the Beneficiary of a DB
Member who dies more than 10 years before the DB Member's Normal Retirement Date. 7.1.2 The amount of benefit payable to a surviving Spouse or to a Beneficiary described in
Paragraph 7.1.1 is equal to:
(a) the Commuted Value of the DB Member's Pension; plus
(b) the amount of the DB Member's Excess Contributions. 7.1.3 The benefit payable to a surviving Spouse under this Paragraph 7.1 shall be paid to the
Spouse as a transfer to a Locked-In Plan. Alternatively, the Spouse may elect to receive an immediate or deferred lifetime pension that has the same Commuted Value as the benefit described in Paragraph 7.1.2. If the Spouse elects a deferred pension, it shall commence not later than the later of (A) one year after the date of death of the DB Member, and (B) the first day of December of the calendar year in which the Spouse attains 71 years of age (or such other date as required under the Income Tax Act (Canada)).
7.1.4 The benefit payable to a Beneficiary shall be paid to the Beneficiary as a lump sum cash
payment. 7.2 Death While Eligible for Early Retirement – Defined Benefit Plan 7.2.1 A benefit shall be paid to the surviving Spouse, if any, or to the Beneficiary of a DB
Member who dies after becoming eligible to receive an immediate pension under Paragraph 5.2.
7.2.2 The benefit payable to a surviving Spouse described in Paragraph 7.2.1 is equal to:
(a) the survivor pension that would have been payable in accordance with Paragraph 6.1 if the DB Member had retired on the date of death, or the Survivor pension that has a Commuted Value of the DB Member’s Pension, if greater; plus
(b) the additional survivor pension that has a Commuted Value equal to the DB
Member's Excess Contributions.
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7.2.3 Alternatively, the Spouse may elect to transfer the Commuted Value of the benefit described in this Paragraph 7.2 to a Locked-in Plan.
7.2.4 The benefit payable to a Beneficiary described in Paragraph 7.2.1, which shall be paid to the
Beneficiary in a lump sum cash payment, is equal to: (a) the Commuted Value of the DB Member’s Pension; plus (b) the amount of the DB Member’s Excess Contributions. 7.3 Balance of Death Benefit
An additional benefit may be paid to the Spouse or Beneficiary of a DB Member who dies prior to retirement. The amount of such benefit shall be equal to:
(a) any additional voluntary contributions made by the DB Member pursuant to
Paragraph 10.2, together with Interest thereon; plus
(b) the following proportion of the DB Member's contributions made before 1992 under Paragraph 10.1 hereof, together with Interest thereon:
Years of Service with
the Company Proportion
0 to 10 100% 11 110% 12 120% 13 130% 14 140% 15 150% 16 160% 17 170% 18 180% 19 190% 20 and over 200%
plus
(c) 100% of the DB Member's contributions made in or after 1992 under Paragraph 10.1
hereof, together with Interest thereon; less
(d) the benefit payable under Paragraph 7.1 or 7.2.
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7.4 Death Benefits Prior to Retirement – Defined Contribution Plan If a DC Member dies prior to the distribution of his Account Balance under any other
Article of the Plan, the DC Member's Spouse or, if there is no Spouse or if the Spouse has waived entitlement to the death benefit in the prescribed form and in accordance with the Act, the DC Member's Beneficiary shall be entitled to distribution of the DC Member's Account Balance, determined at the date of distribution, in accordance with the Act.
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SECTION 8 - BENEFITS ON TERMINATION OF SERVICE 8.1 Where a DB Member terminates employment, the DB Member is entitled to:
(a) a refund of any additional voluntary contributions made by the DB Member pursuant to Paragraph 10.2, together with Interest thereon; plus
(b) a deferred pension equal to the DB Member's DB Pension; plus
(c) a deferred defined benefit pension in the amount that has a Commuted Value
equal to the DB Member's Excess Contributions. 8.2 The deferred DB Pensions payable to a DB Member under Paragraph 8.1 shall commence
on the first day of the month following the DB Member's Normal Retirement Date. Alternatively, the DB Member may elect to have the deferred DB Pension commence on the first day of any month within the 10 years immediately preceding the DB Member's Normal Retirement Date, in which case the amount of deferred DB Pension shall be reduced by 0.5% for each complete month by which the actual DB Pension start date precedes the first day of the month following the DB Member's Normal Retirement Date, provided that the amount of DB Pension payable as a result of the reduction cannot be less than the actuarial equivalent of the DB Pension available at the DB Member’s Normal Retirement Date.
8.3 The deferred DB Pension payable under Paragraph 8.1 shall be in the form described in
Section 6. 8.4.1 In the event of the death of a Former DB Member who is entitled to a deferred DB
Pension in accordance with Paragraph 8.1, the surviving Spouse of the Former DB Member shall be entitled to receive a death benefit in an amount equal to the Commuted Value of the Former DB Member's deferred DB Pension. Such benefit shall be paid to the Spouse as a transfer to a Locked-In Plan. Alternatively, the Spouse may elect to receive an immediate or deferred lifetime pension that has the same Commuted Value as the Former DB Member's deferred DB Pension. If the Spouse elects a deferred pension, it shall commence not later than the later of (A) one year after the date of death of the Former DB Member, and (B) the first day of December of the calendar year in which the Spouse attains 71 years of age.
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8.4.2 In the event of the death of a Former DB Member who is entitled to a deferred DB Pension in accordance with Paragraph 8.1 and who does not have a surviving Spouse, a death benefit in an amount equal to the Commuted Value of the Former DB Member's deferred DB Pension shall be paid to the Beneficiary of the Former DB Member in a lump sum.
8.5 In lieu of the deferred DB Pension payable under Paragraph 8.1(b) or 8.1(c), if the
Former DB Member had less than two years as a DB Member of the DB Plan at the date of termination or death, or if the commuted value of the deferred DB Pension is less than 20% of the YMPE, the Former DB Member or the surviving Spouse of the Former DB Member may elect to receive or transfer the Commuted Value of the Former DB Member’s deferred DB Pension as a lump sum. Otherwise, in lieu of the deferred DB Pension payable under Paragraph 8.1(b) or 8.1(c), a Former DB Member who is not eligible to elect an immediate DB Pension under Paragraph 8.2 may elect to transfer the Commuted Value of such deferred DB Pension or pensions to a Locked-In Plan.
8.6 Termination of Employment – Defined Contribution Plan
A DC Member whose employment ceases other than by death or retirement shall be entitled to the distribution of the Former DC Member’s Account Balance, determined as of the date of distribution, into a Locked-In Plan. If the Former DC Member had less than two years of membership in the DC Plan at the time of termination, or if the DC Member’s Account Balance is less than 20% of the YMPE in the year of termination, the Former DC Member may elect to receive or transfer the Former DC Member’s Account Balance as a lump sum. In the event that a Former DC Member who is entitled to elect distribution of his Account Balance fails to elect an option within the time required or permitted under the Act, the Company may, in its absolute discretion, make payment in such form as may be permitted under Act, including the purchase of a life annuity on behalf of the Former DC Member from a company licensed to provide annuities in Canada with the Former DC Member's Account Balance.
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SECTION 9 - BENEFITS ON DISABILITY 9.1 A DB Member who is certified by a licensed medical doctor to be suffering from a
physical or mental impairment that prevents the Member from performing the duties of employment in which the Member was engaged before the commencement of the impairment, and is receiving benefits under the Company long term disability insurance plan, shall continue to be a Member of the DB Plan. The Member's Earnings for purposes of the DB Plan shall be equal to the amount of benefits that the Member receives from the long term disability insurance plan.
9.2 A DB Member described in Paragraph 9.1 shall not be required to contribute to the DB
Pension Fund in respect of the period during which the Member is receiving benefits under the long term disability insurance plan.
9.3 Workplace Safety and Insurance Act A Member who receives a disability income under the Workplace Safety and Insurance
Act (Ontario) shall continue to be a Member of the Plan. The Member's Earnings for purposes of the Plan shall be equal to the amount of disability income that the Member receives. Such a Member shall be required to contribute to the Pension Fund in respect of the period during which the Member is receiving such disability income.
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SECTION 10 - CONTRIBUTIONS The Plan is to be funded in accordance with the tests and standards for solvency that are prescribed by the Act. 10.1 Members' Required Contributions
Except as provided in Paragraph 9.2, Members will be required to contribute 5% of their Pensionable Earnings to the Plan.
10.2 Members' Additional Voluntary Contributions
Additional voluntary contributions are not permitted on or after January 1, 2000. 10.3 Maximum Members' Contributions 10.3.1 Maximum DB Member’s Contributions in respect of the DB Plan
The sum of a DB Member's contributions required under Paragraph 10.1 in a calendar year and any DB Member's additional voluntary contributions authorized under Paragraph 10.2 in that year shall not exceed the maximum amount allowed in that year under the Income Tax Act (Canada).
10.3.2 Maximum DC Members’ Contributions in respect of DC Plan
(a) A DC Member’s contribution to the DC Plan shall not, in a calendar year, exceed the lesser of: (i) the money purchase limit for the year; and (ii) 18% of the member’s compensation from the Company for the year. and for the purposes of this subsection, “money purchase limit” and “compensation” have the meaning given to such terms under the Income Tax Act (Canada).
(b) The maximum contribution limit calculated in accordance with subsection (a) shall be reduced by the amount, if any, of a DC Member’s expected “pension adjustment” (as defined in the Income Tax Act Canada) for any benefits accrued or contributions made in the calendar year under any other registered pension plan or deferred profit sharing plan of the Company.
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10.4 Company Contributions 10.4.1 Contributions in Respect of the DB Plan
The Company will contribute (or obtain a qualifying letter of credit) in each year:
(a) such amounts as may be required, in addition to the DB Members' contributions, to finance all benefits and expenses in accordance with the DB Plan accruing during that year; and
(b) such amounts that may be required to amortize the estimated unfunded liability of
the DB Plan in such manner as to comply with the provisions of the Act.
as determined by the Company, in consultation with the Actuary, in such a manner as to comply with the Act and the Income Tax Act (Canada).
10.4.2 Contributions in Respect of the DC Plan
Effective May 24, 2014 the Company will contribute to the Account of each DC Member an amount equal to 100% of each DC Member’s contributions.
10.5 Remittance of Contributions 10.5.1 The Company contributions shall be paid no less frequently than within 30 days after the
end of the period in respect of which the instalment is paid. The Company contributions and any special payment will be remitted to the Pension Fund within 30 days after the end of the period in respect of which the instalment is paid.
10.5.2 The Members' contributions will be remitted to the Pension Fund within 30 days after the
end of the period in respect of which they were deducted from the Members' remuneration.
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10.6 Funding Excess
If at any time the assets of the DB Pension Fund shall exceed the amount required to be paid under the terms of the DB Plan in respect of service rendered by DB Members and Former DB Members prior to that time, such excess may be applied at the option of the Company:
(a) to provide a reserve for contingencies,
(b) to finance the cost of improvements in the benefits of DB Members or Former DB
Members created by subsequent amendments to the Plan, or
(c) to finance the benefits and expenses under both the DB Plan and DC Plan to be paid from the Pension Fund accruing under the terms of the Plan, subject to the provisions of the Act and the Income Tax Act (Canada), as amended from time to time.
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SECTION 11 - AMENDMENT OR TERMINATION OF THE PLAN 11.1 Right to Amendment
The Company reserves the right at any time and from time to time, to modify or amend the Plan in whole or in part provided, however, that no such modification or amendment shall be made which would:
(i) divest a Member or Former Member of any interest vested in the Member or
Former Member on the date of such modification or amendment, or reduce the value of benefits accrued to the Member or Former Member on such date; or
(ii) cause or permit any portion of the Pension Fund to divert to or become the
property of the Company prior to the satisfaction of all requirements and obligations of the Plan;
unless such modification or amendment is necessary or appropriate in order to enable the Plan to continue to qualify for registration as a pension plan under the Act or the Income Tax Act (Canada), as from time to time amended.
11.2 Right of Discontinuance
The Company reserves the right at any time to terminate the Plan or to discontinue its contributions under the Plan with the effect of discontinuance of the Plan.
11.3 Procedure on Discontinuance – DB Plan 11.3.1 In the event that the DB Plan shall at any time be terminated or contributions thereunder
discontinued, the assets of the DB Pension Fund shall be used for the benefit of the DB Members, their Spouses or Beneficiaries as provided in Paragraph 11.3.2.
11.3.2 The DB Pension Fund shall be applied (to the extent the value of same may permit) to the
following purposes in the order named, subject to the provisions of the Act, so that each such purpose shall be given effect to the maximum extent possible before any later purpose is carried out:
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(a) To be used to continue pensions in payment to retired DB Members and to provide benefits in respect of each former Employee entitled to a deferred DB Pension under Section 8.
(b) To provide the benefits which have accrued to each active DB Member whose age
and years of Pensionable Service total at least 55 years at the date of the discontinuance of the DB Plan.
(c) To provide the benefits which have accrued to each of the other active Members
of the DB Plan at the date of discontinuance of the DB Plan.
(d) To return to the Company any balance which shall remain after all liabilities under the DB Plan with respect to benefits specified in (a) through (c) above have been fully satisfied.
The value of the benefits and the amount of actuarial reserve required to provide such benefits shall be determined by the Actuary. The Pension Committee may direct that the allocation so found to be due to any person shall be paid as a benefit through the continuance of the existing DB Pension Fund, or used to purchase an annuity for the benefit of such person from an insurance company licensed to transact annuity business in Canada, subject to the provisions of the Act and the Income Tax Act (Canada), as amended from time to time.
11.4 Procedure on Discontinuance – DC Plan In the event that the DC Plan shall at any time be terminated or contributions thereunder
discontinued, each DC Member shall be entitled to transfer their Account Balance in accordance with the Act.
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SECTION 12 - MISCELLANEOUS PROVISIONS 12.1 Limitation of Company Obligations
Nothing contained in the Plan gives, or is intended to give, any Employee the right to be retained in the service of the Company, or to interfere with the right of the Company to discharge or otherwise terminate the employment of any Employee at any time. Subject to the requirements of the Act, membership in the Plan gives no right or claim to a benefit thereunder beyond those expressly provided herein, and all rights and claims hereunder are limited as set forth in this Plan and are further limited to the extent of the Pension Fund supporting this Plan.
12.2 Non-Alienation of Benefits 12.2.1 Except as provided under Paragraph 12.3, no benefit provided under the Plan is capable
of being assigned, charged, anticipated or given as security or confers on a Member or Former Member, that person's personal representative or dependant or other person any right or interest therein that is capable of being assigned, charged, anticipated or given as security.
12.2.2 No pension benefit or deferred pension is capable of being surrendered or commuted
during the lifetime of the Member, Former Member or Spouse or confers on a Member or Former Member, that person's personal representative or dependant or other person any right or interest therein that is capable of being surrendered or commuted during the lifetime of the Member, Former Member or that person's Spouse.
12.2.3 Except as otherwise provided in this Plan, a Member or Former Member is not permitted
to withdraw any part of that person's contributions to the Plan. 12.3 Marriage Breakdown 12.3.1 Subject to the provisions of the Act, pension benefits, pension benefit credits and any
other benefits under the Plan shall, on divorce, annulment or separation, be subject to and divided and distributed in accordance with, the applicable provincial family property legislation and regulations.
12.3.2 The Company reserve the right that where all or part of a Member's or Former Member's
pension benefit is required to be assigned in accordance with Paragraph 12.3.1, the pension benefit may be adjusted so that it becomes payable as two separate pensions, one
27
to the Member or Former Member and the other to the Member's or Former Member's spouse covered by the court order or assignment, subject to any restrictions in the applicable provincial family property legislation and regulations.
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SECTION 13 - ADMINISTRATION OF THE PLAN 13.1 Pension Committee 13.1.1 The Company shall be the administrator of the Plan. Without in any way derogating from
the Company’s responsibilities, the day-to-day administration of the Plan is delegated to a Pension Committee of not less than three persons, each of whom is a Canadian resident appointed from time to time by the Company to serve at the discretion of the Company. Any member of the Pension Committee may resign by delivering a written resignation to the Company.
13.1.2 The members of the Pension Committee shall elect a Chairman from their number, and a
Secretary who may be but need not be one of the members of the Pension Committee; may appoint from their number such committees with such power as they shall determine; may authorize one or more of their number or any agent to execute or deliver any instrument or make any payment on their behalf; and may retain counsel, employ agents and provide for such clerical, accounting and actuarial services as they may require in carrying out the provisions of the Plan.
13.1.3 The Pension Committee shall hold meetings upon such notice, at such place or places and
at such time or times as it may from time to time determine. 13.1.4 No member of the Pension Committee shall receive any compensation for services as
such, and no bond or other security shall be required of such member in such capacity in any jurisdiction.
13.1.5 The Pension Committee shall submit to the Company an annual report as of the 31st day
of December in each year governing the operation of the Plan for the year then completed and containing such data and information as the Company may require. The Company may require the Pension Committee to submit such other reports during the year as the Company may deem necessary.
13.1.6 The Company, upon the recommendation of the Pension Committee, shall have the
authority to make any ruling or interpretation necessary for the proper functioning of the Plan.
13.1.7 The Pension Committee shall, subject to the rules herein provided, have the power to deal
with all administrative matters including the determination of the eligibility of employees
29
to membership in the plan or to benefits thereunder and the determination of the amount of such benefit.
13.1.8 The Pension Committee shall instruct the Actuary to make an actuarial valuation of the
Plan at appropriate intervals, not less often than required by the provisions of the Act. The Actuary shall perform all the calculations necessary for the operation of the Plan, and shall advise in any matter relating to the Plan upon the request of the Pension Committee.
13.2 Records
The Pension Committee shall cause to be maintained such records and accounts as it deems necessary for the proper administration of the Plan.
13.3 Proof of Age
The Pension Committee shall require each Member to submit to it, in such form as it shall deem reasonably adequate and acceptable, proof of age or date of birth and proof of the age and date of birth of any joint annuitant.
13.4 Explanation to Members 13.4.1 The Pension Committee shall provide a written explanation to each Member, each
Employee who is eligible to join the Plan and, in either case, such person's Spouse, of the terms and conditions of the Plan and amendments thereto applicable to him, together with an explanation of the rights and duties of the Member with reference to the benefits available to him under the terms of the Plan, and such other information as may be prescribed by the Act and regulations thereunder or any Act successor thereto or by any other legislation applicable to the Member. In the event of any conflict between any statement made in such explanation and the provisions of the Plan, the provisions of the Plan shall govern.
13.4.2 Each Member and the Member's Spouse shall be given, in the prescribed circumstances
and in the prescribed manner and within six months following the end of each year, a written statement showing the pension benefits to which the Member is entitled under the Plan at the end of the year, the funded ratio of the Plan and such other information as is prescribed by the Act.
13.4.3 Where a Member retires, dies or ceases to be a Member of the Plan, the Company shall
give to that Member or the Member's legal representative in the event of the Member's
30
death, and to the Member's Spouse a written statement of the benefits payable under the Plan within 30 days after the date of retirement, death, termination of service or cessation of membership, as the case may be.
13.5 Examination of Plan Text
A copy of the plan text and other material prescribed by the Act may be examined by any Member, Member's Spouse or agent thereof at any reasonable time at such offices of the Company as they may designate.
13.6 Limitation on Liability of Company
Neither the Company, their officers and directors, the Pension Committee nor any person to whom the Company or Pension Committee may delegate any duty or power in connection with administering the Plan shall be responsible for any reports furnished by the Actuary under the Plan, but shall be entitled to rely thereupon as well as on all tables, valuations and certificates furnished by such Actuary and on all opinions of counsel. The Company, their officers and directors or any person to whom the Company may delegate any duty or power in connection with administering the Plan, shall be fully protected with respect to any action taken or suffered by them in good faith and reliance upon such Actuary, accountant or counsel, and all actions taken and suffered in such reliance shall be binding between, and without liability to, each of them, and on each and all Members, Spouses or Beneficiaries under the Plan. The Company, the Pension Committee or any person to whom the Company may delegate any duty or power in connection with administering the Plan, shall not be liable hereunder for any error of omission or commission of any attorney or agent unless, in the selection of such attorney or agent, it was guilty of gross negligence, wilful misconduct, or lack of good faith.
31
SECTION 14 - FUNDING OF THE PLAN 14.1 Funding Medium
The Company shall make all necessary arrangements with one or more trust companies or insurance companies under which contributions of the Members and the Company shall be received, benefits shall be paid and amounts held in the Pension Fund shall be invested in accordance with:
(i) the provisions of the arrangements with any such trust company; and
(ii) the Act and any other applicable legislation governing the investment of pension
funds,
provided that, at the discretion of the Pension Committee, benefits may be provided by the purchase of an annuity or annuities from an insurance company licensed to transact annuity business in Canada.
Any such arrangement is not a part of the Plan but serves to establish and maintain a funding medium through which the assets of the Pension Fund are maintained.
Any arrangements entered into in accordance with this Paragraph 14.1 shall be between the Company and that trust or insurance company and only on the direction of the Company. Such arrangements may, by action of the Company in writing, be terminated or contributions thereunder by the Company suspended, in which case the Company shall enter into new arrangements with one or more other such trust or insurance companies for the purpose of maintaining the assets of the Pension Fund.
14.2 Sufficiency of Pension Fund
Subject to the provisions of the Pension Benefits Standards Act, 1985 and regulations thereunder or any Act successor thereto, the Company shall be under no contractual liability for any contributions to the fund, but, in making such contributions of its own volition, it may rely upon the estimates made and obtained from the Actuary of the amounts which would accomplish the purposes of the Plan. Neither the Company, nor the Pension Committee nor any institution shall be liable in any manner if the Pension Fund shall be insufficient to provide for the payment of all benefits, subject to the provisions of the Act.
32
14.3 Surplus Withdrawal
Subject to the provisions of the Act and requirements of any legislation or regulatory agency having jurisdiction over the DB Plan, the Company may, in their discretion, withdraw from the DB Pension Fund at any time all or any portion of the amount by which the assets of the DB Pension Fund shall exceed the amount required to be paid under the terms of the DB Plan in respect of service rendered by DB Members and Former DB Members prior to that time. No amount shall be paid to the Company under this Paragraph 14.3 without the prior written consent of the Superintendent of Financial Institutions.
14.4 Investment of Defined Contribution Pension Fund
(a) Each DC Member shall file with the Funding Agency on a form prescribed by it an initial election as to the investment options selected for the DC Member’s Account. If a DC member does not provide an initial election as to the investment option selected, the assets of the DC Member’s Account will be invested in a default investment option designated by the Company.
(b) The assets of the Pension Fund shall be invested in accordance with the terms of
the Funding Agreement, the Income Tax Rules and the Act. (c) Investment Earnings shall be determined in accordance with the terms of the
Funding Agreement and allocated to the DC Pension Fund not less frequently than monthly.
(d) Investment earnings attributable to each DC Member’s Account shall be based on
the performance of the investment options selected, calculated from the date of contribution up to and including the day immediately preceding the day in which the Account Balance is distributed.
33
SECTION 15 - CONSTRUCTION 15.1 The laws of the Province of Ontario shall, except as otherwise specifically provided in
the Plan, apply thereto and shall be construed accordingly.
Except as aforesaid, every right and claim made under or by virtue of the Plan shall be determined according to the laws of the Province of Ontario.
Appendix B Statement of Investment Policy & Procedure
INVESTMENT POLICY STATEMENT
PENSION PLAN FOR EMPLOYEES OF
THE TORONTO PORT AUTHORITY
EFFECTIVE March 8, 2016
Investment Policy Statement
Pension Plan for the Employees of the
Toronto Port Authority
March 8, 2016
CONTENTS
PAGE
1. OVERVIEW 1
2. RESPONSIBILITIES 2
3. CONFLICTS OF INTEREST 3
4. PLAN CHARACTERISTICS 4
5. FUND OBJECTIVES 5
6. PERMITTED INVESTMENTS 6
7. ASSET ALLOCATION 8
8. INVESTMENT RISK 10
9. VOTING RIGHTS 11
10. MONITORING 12
11. RELATED PARTY TRANSACTIONS 13
12. REVIEW 14
13. APPENDIX A – INVESTMENT MANAGER MANDATES 15
Investment Policy Statement
Pension Plan for the Employees of the
Toronto Port Authority
March 8, 2016
Page 1
1. OVERVIEW
1.1 This investment policy statement (the "Statement") applies to the Pension Plan for
Employees of The Toronto Port Authority (the "Plan") which is a registered pension
plan as defined under the Income Tax Act (Canada). It contains investment
objectives, investment guidelines, and monitoring procedures.
1.2 Plan assets (the "Fund") will be managed in accordance with all applicable legal
requirements notwithstanding any indication to the contrary which might be
construed from the Statement.
1.3 With respect to any portion of the Fund invested in pooled funds, provisions of the
Pooled Fund Statement shall prevail over the Fund Investment Policy statement to
the extent that they are in conflict.
Investment Policy Statement
Pension Plan for the Employees of the
Toronto Port Authority
March 8, 2016
Page 2
2. RESPONSIBILITIES
2.1 The Toronto Port Authority (the "Authority") sponsors and administers the Plan.
The Authority acts through its Board of Directors (the "Board of Directors") in
discharging its responsibilities, including its responsibility for investment of the
Fund.
2.2 The Authority has delegated certain responsibilities with respect to the investment
of the Fund to the Toronto Port Authority Pension Committee (the "Committee").
The Committee will be responsible for evaluating investment manager performance
and the performance of the Fund and will, from time to time, provide
recommendations to the Board of Directors concerning the investment of the Fund.
2.3 The Corporation has also delegated some of its responsibilities with respect to the
investment of the Fund to agents and advisors. In particular, the services of a
trustee (the "Trustee") and of one or more investment managers (the "Managers")
are retained.
2.4 Any person to whom the Corporation delegates responsibilities with respect to the
investment of the Fund must adhere to the provisions of the Statement.
Investment Policy Statement
Pension Plan for the Employees of the
Toronto Port Authority
March 8, 2016
Page 3
3. CONFLICTS OF INTEREST
3.1 A conflict of interest is deemed to exist when a Plan fiduciary has an interest of
sufficient substance and proximity to his/her duties and powers with respect to the
Fund to impair his/her ability to render unbiased advice or to make unbiased
decisions affecting the Fund.
3.2 A Plan fiduciary must disclose any actual or perceived conflict of interest in writing
as soon as possible along with all relevant details to the chairperson of the
Committee who, in turn, discloses it to all Committee members and to the Board of
Directors as soon as possible.
3.3 Any person having discretionary authority over the investment of the Fund is a Plan
fiduciary. This generally includes, but is not limited to the Plan's administrator, a
member of the Committee, or the Board of Directors, along with anyone to whom
the Board of Directors may delegate discretionary authority, such as a Manager.
Investment Policy Statement
Pension Plan for the Employees of the
Toronto Port Authority
March 8, 2016
Page 4
4. PLAN CHARACTERISTICS
4.1 The Plan is a defined benefit pension plan. That is, the Plan provides benefits that
are calculated in accordance with pre-determined formulae and provisions.
4.2 The Plan provides benefits upon retirement, death and termination prior to
retirement.
4.3 Members are required to make contributions to the Plan as a condition of
participation.
4.4 Pension benefits are equal to a percentage of earnings received during the period
of Plan membership. At the Authority's discretion, the Plan has provided benefit
increases in the past. The nature of the increases was to upgrade the accrued
benefits of active members based on average earnings as at the date of the
increases.
4.5 Upon retirement, a member shall receive a lifetime pension payable monthly from
the Fund. Termination and death benefits may be paid in lump sums or
transferred to the retirement savings vehicles specified by applicable pension
legislation.
4.6 The Plan does not provide any prescribed benefit increases after retirement,
termination or death.
4.7 Plan expenses are paid out of the Fund.
4.8 Fund surplus may be applied to provide benefit improvements, or to reduce the
employer’s required contributions, upon approval of the Authority.
Investment Policy Statement
Pension Plan for the Employees of the
Toronto Port Authority
March 8, 2016
Page 5
5. INVESTMENT OBJECTIVES
5.1 The primary objective of the Fund is to provide for the timely payment of benefits
that have accrued under the Plan upon retirement, termination or death.
5.2 The Fund along with its future contributions and investment returns is expected to
pay Plan benefits.
5.3 The Fund is expected to generate investment returns that will lead to reasonable and
predictable contribution rates.
5.4 The Fund is expected to maximize investment returns, given the level of risk
deemed appropriate by the Authority.
Investment Policy Statement
Pension Plan for the Employees of the
Toronto Port Authority
March 8, 2016
Page 6
6. PERMITTED INVESTMENTS
6.1 The Fund may only be invested in the following asset categories:
i) cash;
ii) demand or term deposits;
iii) short term notes;
iv) treasury bills;
v) bankers' acceptances;
vi) commercial paper;
vii) investment certificates issued by banks, insurance companies or trust
companies;
viii) bonds, coupons, residuals and non convertible debentures, loans/direct
loans;
ix) mortgages and other asset-backed securities;
x) convertible debentures;
xi) common and preferred stocks, ADRs and GDRs, units of limited
partnerships, income trusts and REITS;
xii) pooled funds, closed-end investment companies and other structured
vehicles invested in any or all of the above asset categories;
xiii) private placements of debt obligations;
xiv) hedge funds;
xv) real estate.
6.2 The Fund may hold derivative financial, commodity or currency related instruments
such as forward contracts, options, futures or swaps, rights and warrants in
accordance with a program accepted in writing by the Authority, subject to the
following:
i) the use of derivatives shall be on an interim basis;
ii) the use of put writing or naked puts is prohibited; and
iii) the use of derivatives shall be for hedging purposes only.
6.3 The Fund will not engage in the following, unless permitted in writing by the
Authority:
i) purchase of securities on margin;
ii) loans to individuals other than to arm's length parties guaranteed by a
mortgage;
iii) short sales.
Notwithstanding the above, temporary overdrafts incurred in the normal course of
trade settlements are authorized.
Investment Policy Statement
Pension Plan for the Employees of the
Toronto Port Authority
March 8, 2016
Page 7
6.4 Borrowing on behalf of the Fund is only permitted in accordance with applicable
laws and in order to pay Plan benefits.
6.5 The Managers and the Toronto Port Authority shall not engage in securities lending,
without the express written permission of the Authority.
Investment Policy Statement
Pension Plan for the Employees of the
Toronto Port Authority
March 8, 2016
Page 8
7. ASSET ALLOCATION
7.1 The Fund's asset allocation limits are as follows:
ASSET CLASS
(GROUP)
TARGET ASSET
ALLOCATION
MARKET VALUE OF
THE FUND
Short term 5.0% 0.0 – 10.0%
Bonds
Loans/Direct Loans
20.0% 10.0 – 55.0%
(Fixed income) 25.0% 10.0 – 60.0%
Canadian stocks 20.0% 10.0 – 65.0%
Bank stocks 20.0% 10.0 – 65.0%
Foreign stocks 15.0% 10.0 – 55.0%
(Equity) 55.0%
Real estate 10.0% 0.0 – 15.0%
Hedge funds 10.0% 0.0 – 15.0%
Total 100.0%
7.2 The target asset allocation has been determined in order to meet Fund objectives. It
reflects a risk/return tradeoff which was assessed by the Committee on the basis of
long term prospects in the capital markets taking into account the Plan's benefits.
7.3 Short term investments include cash and fixed income investments having a
maturity of less than one year when issued.
7.4 Bonds include all mortgages and preferred shares and all fixed income securities
having a maturity of one year and more when issued.
7.5 Real estate includes direct investments or investments through participating
debentures or shares of corporations or partnerships formed to invest in real estate
properties.
7.6 Canadian stocks include common stocks, income trust units and convertible
securities of Canadian issuers.
Investment Policy Statement
Pension Plan for the Employees of the
Toronto Port Authority
March 8, 2016
Page 9
7.7 Foreign stocks include common stocks and convertible securities of non-Canadian
and U.S. issuers.
7.8 Resource properties include investments through shares of corporations, trusts or
partnerships formed to invest in Canadian resource properties.
7.9 Securities held in a pooled fund are classified on the basis of the assets comprising
the major portion of such pooled funds.
7.10 Derivative instruments along with any collateral held thereon are included in the
asset class comprising the securities whose return or price serves as the basis for the
pricing of such derivative instruments.
Investment Policy Statement
Pension Plan for the Employees of the
Toronto Port Authority
March 8, 2016
Page 10
8. INVESTMENT RISK
8.1 Diversification between asset classes is provided through the asset allocation
guidelines set forth in the Statement.
8.2 Diversification within each asset class is provided by limiting to 10% of the market
value of Fund assets invested in a single security not guaranteed by the government
of Canada or of a Canadian province and by restricting investments in a group of
equities whose returns are expected to be highly correlated. Notwithstanding the
foregoing, at no time will more than 10% of the book value of the Fund be invested
in the securities of a single issuer or a single issuer and any of that issuers affiliates
other than those securities guaranteed by the government of Canada or of a
Canadian province or as otherwise permitted by applicable pension legislation
except for individual holdings in the dedicated bank stock portfolio. No restrictions
apply to individual holdings in bank stocks. At no time will more than 10% of the
market value of the Fund be invested in private placements of debt obligations.
8.3 Liquidity is provided by limiting investments in real estate, venture capital and
resources properties though the asset allocation guidelines set forth in the
Statement, by restricting the use of private placements, by limiting to 10% the
percentage of a single public issue to be held by the Fund, (except for individual
holdings in bank stocks), by limiting to 25% of the market value of the Fund to be
invested in mortgages, private placements or other asset-backed securities, and by
requiring that all stocks trade on a recognized exchange unless written permission is
obtained from the Committee.
8.4 Quality is provided by requiring that 90% or more of the market value of short term
securities has a minimum credit rating of R-1 (low) * or its equivalent and that 90%
or more of other fixed income securities have a minimum credit rating of BBB* or
its equivalent. Notwithstanding the foregoing, investments in unrated private
placements of debt obligations are permitted subject to the limits of section 8.2 and
a satisfactory independent investment review.
* as rated by at least two bond rating agencies.
8.5 Currency risk is controlled by limiting investments in foreign stocks through the
asset allocation guidelines set forth in the Statement and by limiting to 30% of the
market value of the Fund held in fixed income investments denominated in foreign
currencies that are not 100% hedged into Canadian dollars.
Investment Policy Statement
Pension Plan for the Employees of the
Toronto Port Authority
March 8, 2016
Page 11
9. VOTING RIGHTS
9.1 Voting rights on Fund securities are delegated to the Manager. However, the
Authority reserves the right to exercise voting rights on Fund securities when it
deems appropriate.
9.2 The Manager will maintain a record of how Fund voting rights have been exercised.
9.3 In case of doubt as to the best interests of the Fund, the Manager requests
instructions from the Authority and acts in accordance with such instructions.
Investment Policy Statement
Pension Plan for the Employees of the
Toronto Port Authority
March 8, 2016
Page 12
10. MONITORING
10.1 Each quarter, the Manager is required to provide a letter indicating compliance with
the provisions of the Statement and indicating instances where such provisions were
violated.
10.2 As of the end of each quarter, the market value of each Fund investment is
calculated. Investments that are not regularly traded are valued by the Trustee
according to a methodology acceptable to the Authority. Any such investment that
may represent more than 1% of the market value of the Fund is valued by a
qualified independent appraiser or by the Authority through a unanimous resolution
at least every three years.
10.3 Each quarter, Fund performance is evaluated by the Committee. Such evaluation is
focused on objectives set for the Plan and for the Manager. API Asset Performance
Inc will be the source of this information and be responsible for its delivery to the
Committee.
10.4 The Manager reports to the Committee to:
i) provide information concerning new developments affecting the Manager
and its services;
ii) review the transactions in the latest period and the assets held at the end of
the period and explain how they relate to the strategy advocated;
iii) explain the latest performance;
iv) provide an economic outlook along with a strategy under such
circumstances.
Investment Policy Statement
Pension Plan for the Employees of the
Toronto Port Authority
March 8, 2016
Page 13
11. RELATED PARTY TRANSACTIONS
12.1 The Authority may enter into a transaction with a related party (as defined under
Schedule III of the Pension Benefits Standards Regulations, 1985) on behalf of the
Plan if:
i) the transaction is required for the operation or administration of the Plan;
and
ii) the terms and conditions of the transaction are not less favourable to the
Plan than market terms and conditions.
Notwithstanding the foregoing, the Authority may invest on behalf of the Plan in
the securities of a related party if those securities are acquired at a public exchange.
If the above requirements are not met, the Authority may enter into a transaction
with a related party on behalf of the Plan if the value of the transaction is nominal
or the transaction is immaterial to the Plan. In assessing whether the value of a
transaction is nominal or immaterial, two or more transactions with the same
related party shall be considered as a single transaction.
A transaction will be considered nominal if its value is no more than 1% of the
market value of the Plan assets at the time the transaction is entered into or
completed. A transaction will be considered to be immaterial to the Plan if its
value is no more than 3% of the market value of the Plan assets at the time the
transaction is entered into or completed. The Authority may, from time to time and
at its absolute discretion, change the definition of nominal and immaterial
transactions.
Appendix C Financial Statements
Schedule A Outsourced Chief Investment Officer Services/ Investment Advisor
Services Questionnaire
Background Information:
____________________________________________________________________________ Organization’s Legal Name ____________________________________________________________________________ Type of Business (Corporation, Partnerships, Individual, etc.) ___________________________________________________________________________ Jurisdiction Where Organization is Incorporated/Registered ____________________________________________________________________________ Website Address ____________________________________________________________________________ Head Office Address ____________________________________________________________________________ Address of Office Managing the Account (if different from above) ____________________________________________________________________________ RFP Contact Name and Title ____________________________________________________________________________ RFP Contact’s Telephone Number, Fax Number and Email Address ____________________________________________________________________________ Signer (authorized to contractually bind the Organization) Date ____________________________________________________________________________ Name and Title of Authorized Signer (Please print) Respondent’s Profile: 1. Give a brief history of your organization, including the year of organization. How many years has
your firm provided OCIO services to a defined benefit pension plans and defined contribution pension plans?
2. Describe the ownership structure, including affiliations, subsidiaries and employee ownership of
your organization. Has your organization undergone ownership structure changes in the past
Schedule A Outsourced Chief Investment Officer Services/ Investment Advisor
Services Questionnaire
five years, or is ownership changes planned or anticipated at this time? Briefly explain. 3. Describe the compensation regime within your organization. 4. Please indicate whether your firm is a registered with the Ontario Securities Commission and
the nature of your registration. 5. How long has your organization provided OCIO services or investment advisory services (as
applicable)? What portion of your revenues does this activity constitute? How does this service fit into your future (short-term/long-term) business strategy?
6. Please indicate the length of your organization’s relationship with its five (5) largest
discretionary OCIO clients or investment advisory services clients (as applicable). 7. Does your organization, its principals, or any affiliate, own any part of an investment
management firm, broker-dealer, or other organization that sells products and/or services to institutional investors? Identify the organization (s) and describe the relationship. What policy and/or procedures are in place to avoid and mitigate these conflicts?
8. Does your firm or any of its affiliates manage assets or provide trust services for clients? 9. Does your firm have relationships with investment managers that you would hire (in the case of
the OCIO) or recommend for hire (in the case of the investment advisor) to the Plan? Do you charge investment managers for inclusion in your suggested list of investment managers? Does a conflict of interest exist?
10. Describe your plans for managing the future growth of your organization in terms of staff,
maximum assets, number of clients, etc. and how this affects your ability and commitment to servicing your existing clients.
11. Do you subcontract or outsource any parts of your OCIO or investment advisory (as applicable)
business? If yes, please describe in detail which parts are performed externally and the reason for doing so. Please provide the name(s) of the providers, their office location, how long they have been in business, and the qualifications of the specific people who will be working on our account.
12. Please complete the table below as of June 30, 2016:
Schedule A Outsourced Chief Investment Officer Services/ Investment Advisor
Services Questionnaire
Client Base Profile
Client Type Number of
Discretionary Discretionary
AUA* Number of Non-
Discretionary
Non-Discretionary
AUA*
Total Number
of Clients Defined Benefit Pension Fund
Defined Contribution Pension Fund
Endowments/ Foundations
Other (Please specify)
* Assets under advisement
13. Provide the names and contact information for three (3) client references for whom you provide comparable OCIO services or investment advisory services (as applicable). Please explain how you selected these references.
14. Provide the names, titles, and their biographies of the Primary, Secondary and Additional
Support personnel that will be assigned to the Plan including each person’s educational qualifications, professional affiliations, and their investment performance of pension plans, which they had investment discretion of, for which they provided consulting services. Disclose which office location where they are primarily assigned. Also, provide additional information using the format below:
Name of Primary,
Secondary and Additional Support
Primary
(P), Secondary
(S) or Additional
Support (AS)?
Title
Total Number of
Accounts Assigned,
(excluding the Plan)
Years with
Firm
Years of
Investment Consulting Experience
1. 2. 3.
Schedule A Outsourced Chief Investment Officer Services/ Investment Advisor
Services Questionnaire
15. For the Primary, Secondary, and Additional Support personnel assigned to the Plan: Provide the client name, plan type (such as Defined Benefit, Defined Contribution, Endowment, etc.), length of relationship, and asset size using the format below:
Name of Primary, Secondary, and Primary Backup
Client Name
Plan Type
Length of
Relationship (in Yrs)
Client’s Asset Size ($000)
1. 2. 3. 4. 5.
16. Please describe your approach to investment management. What is your role in developing
investment policy in your typical client relationship? What is the extent of your discretion over asset mix, strategy and fund manager selection/termination?
17. Describe your fund manager selection, monitoring and evaluation processes. 18. Describe your approach to risk management and risk management processes. Do you employ
the same or similar processes for all of your OCIO clients or investment advisory clients (as applicable)? How to you respond to unique client needs?
19. What are your criteria for asset allocation within a portfolio? How to you respond to unique
client needs? 20. Describe your rebalancing criteria and processes. 21. Describe your approach to benchmarking. 22. What factors other than performance weigh into your investment selections (e.g.
environmental, social and governance factors)? 23. Include a sample of your standard reports and any other kinds of report samples. Is reporting
package customizable? Are there additional charges for customization of reports? Do reports include an executive summary? If so, please include a sample.
24. How does your firm present a discussion of risk in each quarterly performance report? How
does your firm measure risk? What metrics are considered? Please furnish a sample of your risk
Schedule A Outsourced Chief Investment Officer Services/ Investment Advisor
Services Questionnaire
report. 25. Discuss the timing of reliable performance data and report availability. When are reports
available after quarter end? Are daily performance numbers available? Is online performance information available?
26. Describe your recommended process for providing investment and fiduciary education to
Committee/Board members. 27. Have you adopted the CFA Code of Ethics and Standards of Professional Conduct? If so, how is
employee compliance monitored? 28. How do you identify and manage conflicts of interest? Do you have any written policies or
procedures to address conflicts of interest, including (but not limited to) the payment of fees or other consideration from other clients, relationships, or entities that may compromise your fiduciary duty to your clients? If so, please provide a copy. If a conflict of interest does exist, what is your policy and procedure with respect to disclosure to the client? If a written notification is furnished to clients alerting them of any conflict of interest, please furnish a sample copy of this notification.
29. Has your organization or any of the personnel to be assigned to the Plan been subject to any
litigation related to your provision of OCIO or investment advisory services? If so, please explain.
30. Has your organization or any of the personnel to be assigned to the Plan ever been subjected to
disciplinary actions or settlements by regulators? If so, please explain. 31. Please provide hourly rates by position, an annualized overall flat or percentage fee, estimate of
disbursements and guarantee period of the fee structure.
