2019-22 Provincial Judges Pension Board business plan

The Agencies & Appointments Directive requires the Provincial Judges Pension Board (the "Board") to prepare to submit a business plan annually. Development of this business plan began in the final quarter of 2018 and is finalized in time for the submission deadline of December 31^st. As a result, the reader may find references to dates or events that have already occurred or since been resolved. In preparing the Business Plan the Board has used the submission deadline date as the reference point for discussion.

Executive summary

The Provincial Judges Pension Board ("PJPB" or the "Board") is the trust agency responsible for the administration of pension benefits of retired provincial judges and their survivors. For the Plan year ended March 31, 2018 that meant overseeing the calculation and timely delivery of $44.3 million in annual pension payments to 298 Plan beneficiaries.

Pensions are paid from the Provincial Judges Pension Fund (the "Fund") which is an Account under the Consolidated Revenue Fund of the Province of Ontario ("CRF"). The Fund consists of contributions made, interest earned and monies paid or credited to the Fund by the Ministry of Finance ("MOF"), less monies, pensions and survivor allowances paid out under the Provincial Judges Pension Plan (the "Plan"). The Minister of Finance is the custodian of the Fund and no payment can be made from the Fund without the consent of the Board.

All Plan expenses are paid directly by the Treasury Board Secretariat ("TBS" or "the Sponsor"). These administrative expenses include general pension payroll administration and Board support provided under agreement with Ontario Pension Board ("OPB"). Fees for Plan administration are fixed in a service level agreement between the Board, TBS and OPB.

In May 2018, the Government formally accepted the recommendations of the 9^th and 10^th Provincial Judges Remuneration Commission (the Commission) including a proposal to redesign the structure of the Plan’s funding. Under the redesigned Plan, member entitlements would not be affected but they would be paid from 3 different funds: a Registered Pension Plan; a Retirement Compensation Arrangement; and a Supplementary Plan. The changes were proposed in response to calls for additional security of benefits, full deductibility of member contributions, and to maximize pension income splitting opportunities under the ITA.

Last year, we pointed out that in the event of a substantive recasting of the Plan’s funding model, the Board’s priorities would shift dramatically for the remaining period of the business plan. As a result, implementation of the Plan redesign has become the Board’s main priority for the balance of 2018 and likely all of 2019. A successful transition to the new design will require smooth operation of the existing arrangement in the interim; thoughtful planning respecting the new governance framework; and effective execution of the new arrangement.

This coincides with the election of a new provincial government with a mandate for fiscal responsibility. Ontario’s Fall Economic Statement provides some insight into government priorities that will affect the Board in the near term. Ontario is focused on deficit reduction and regularly stresses the need for future restraint in public spending and is committed to ongoing review of spending by public agencies. It also intends to establish a task force to conduct a comprehensive review of all agencies, to ensure their respective mandates provide value for money. At the same time, the government has expressed its support for digitization and modernization of public services and with, respect to university pension plans, asset pooling and shared administration to achieve economies of scale.

The current proposal for asset pooling and shared administration through Ontario Pension Board and Investment Management Corporation of Ontario (IMCO) will have benefits for both the membership and Sponsor. The shift to a more complex pension arrangement will however, require development of new governance and administrative processes and systems which are expected to create short term cost pressures. The Board has been advocating for automated service delivery for some time, we believe that implementation of the new Plan design represents the best opportunity to establish a cost effective, modernized, sustainable pension administration framework that mitigates risk and maintains the pension promise for all the Plan’s beneficiaries.

The Government’s expectations can be easily integrated into our strategic priorities because they share our focus on three essential themes: 1) service delivery; 2) stakeholder relations; and 3) Plan governance.

High level strategy: Deliver excellent cost effective client service

Recommendations of the 9^th and 10^th Provincial Judges Remuneration Commission were formally accepted by the government in 2018. While pension and contribution levels are not affected the changes will have a significant effect on the structure and governance of the PJPP. We recognize that implementation of the restructured fund design will be the priority for the Board, the Plan Sponsor and all the Plan’s stakeholders for the coming year. For this reason we need to be especially vigilant with respect to client service delivery and our focus will be on ensuring members and pensioners continue to receive timely, high quality services during the period of transition.

In the past we have identified pension automation as a means of improving our ability to track and assess service delivery performance. The current administration model makes that outcome difficult to achieve because it is decentralized and highly manual. During implementation we will be advocating once again for automation opportunities that blend modernization of services with the ability to report on the effectiveness of service delivery.

Measuring and interpreting the value a client places on a specific pension service requires specialized expertise and a convenient platform to communicate and collect information. In consideration of the plan redesign initiative the Board continues to believe the most cost effective option is a strategy of direct engagement of clients and stakeholders. We remain committed to encouraging discussion through on-going meetings with each stakeholder.

Last year the Minister directed the Board to undertake a review and make recommendations concerning the establishment of annual pension statements for members of the PJPP. There is general support for providing a statement but there are unresolved questions concerning content, distribution, processes and data ownership. Our review is complete and recommendations include integrating the APS requirements into the plan redesign and completing an initial data cleanse. We believe these challenges can be resolved and will continue to encourage the Sponsor to establish a regular statement for members.

High level strategy: Foster effective stakeholder relations

The Plan Sponsor is moving ahead with implementation of the plan design changes recommended by the 9^th and 10^th Provincial Judges Remuneration Commission. The recommendations do not affect benefit levels but will introduce a multi-fund arrangement that will substantially change tax administration and reporting requirements for the Sponsor and the Board. Through regular updates with our stakeholders we can ensure that any administrative issues we come across are identified early so implementation is not delayed.

The Board continues to meet periodically with stakeholders to inform and consult on plan operations with the goal of developing strong relationships with the Sponsor and both the Chief Justice Office and the Association of Ontario Judges (the "AOJ").

We believe that effective stakeholder relations provide a vital channel for PJPP clients to share their views with the PJPB through a recognized stakeholder (e.g. the AOJ). This is especially important for the Board given our mandate is presently focused on retired judges; the service needs of sitting judges are not readily accessible. For this reason we are committed to improving relations through frequent interaction with such stakeholders.

Good relations have contributed to regular invitations for OPB and the Board to attend a biennial pre-retirement seminar for judges, organized by the AOJ, to present an overview of the Plan. Informal feedback on content and format has been positive over the years and we are committed to continuing build relations through this type of interaction.

High level strategy: Strengthen plan Governance

Responsibility for a variety of daily pension administration activities are spread across several departments within three Ministries: TBS, MOF and Ministry of Government and Consumer Services (MGCS), and include a service agreement with OPB. When compared to traditional defined benefit plan governance and administrative frameworks the resulting governance and management structure of the Plan is considered "atypical". The Board believes more can be done to mitigate the risk to effective Plan governance and continues to prioritize the discussion of the issue with senior levels of government. We have made progress in the past but the Plan’s management structure remains complex in comparison to other pension plans.

The new Plan design will pay the pension from 3 sources: a Registered Pension Plan; a Retirement Compensation Arrangement; and a Supplemental Plan. Implementation of the new design will be a convenient opportunity to consider changes to the system of governance with the goal of enhancing effectiveness of oversight, risk management and protection of members, pensioners and their survivors. The Board will encourage all stakeholders to explore governance solutions focused on effective administration.

The Board continues to develop its ability to evaluate and improve effectiveness of risk management, control and governance processes. Ordinarily a governing board receives these assessments through on-going internal audit programs. Financial constraints adopted by the province posed a resourcing challenge for the Board to engage an internal auditor. The Board was successful in obtaining government internal audit resources in the past; more recently our efforts resulted in a review and assessment the data process mapping in 2018. We will continue to advocate for resourcing to conduct internal audits.

The PJPP provides benefits that exceed those permitted by a registered retirement plan under Canadian tax law. While the Plan was always administered according to the limits of the ITA, amendments to the Plan were required to maintain its registered status with Canada Revenue Agency ("CRA"). In 2013, the Plan amendments became the subject of litigation proceedings questioning their constitutional validity and making their status uncertain.

Ordinarily, not amending a pension plan for compliance would trigger the possibility of de-registration of the arrangement resulting in adverse tax consequences for the beneficiaries of the plan. In this case, TBS and AOJ reached an agreement to suspend the litigation as long as the PJPP is administered as it was prior to October 31, 2013 (the "Standstill Agreement"). As the Plan administrator, we obtained assurance that appropriate measures were taken to ensure CRA will not act to deregister the Plan while discussions were in progress.

This has allowed the parties to reach agreement on plan redesign which is currently being implemented. Maintaining the Plan’s registered status is a major Board priority so we continue to monitor compliance with the ITA relative to the "Standstill Agreement"; and to seek independent legal advice as needed to ensure on-going registration of the Plan.

Mandate

The Board’s mandate is to administer pensions and survivor allowances for provincial judges, their surviving spouses and eligible children. The three member Board is constituted as a Trust Agency operating at arm’s length from the Sponsor. It determines eligibility for, and the amount of pensions to be paid according to the terms of the Plan as prescribed in Ontario Regulation 290/13 (the "Regulation"). In carrying out these duties the Board has a fiduciary obligation to act in the best interests of the judges and other Plan beneficiaries.

A Chair is appointed from among the Board members and is accountable to the President of the Treasury Board (the Minister) for:

• The performance of the Board in fulfilling its mandate;
• Carrying out its assigned roles and responsibilities;
• Reporting to the Minister as requested on Board activities and agency compliance; and
• Timely communication about issues affecting the Minister’s responsibilities for the Board.

All pensions and survivor allowances are paid from the Fund and no payment may be made unless it is authorized by the Board or made in accordance with its established procedures. The Board is not responsible for managing the investment of the Fund. The Fund, including contributions of sitting Judges, is currently held in the accounts of Ontario. The Minister of Finance is the custodian of the Fund.

The Board operates in accordance with all administrative policies established and specified in all applicable Agency Directives and Guidelines, any amendments to those Directives or Guidelines and any new applicable Directives or Guidelines. These Directives and Guidelines include, but are not limited to, the most recent versions listed within Appendix "B".

While the Board acts as the Plan Administrator, it currently has no authority or responsibility for the:

• administration and investment of the Fund;
• collection and remittance of pension contributions to the Fund;
• interest earned by the Fund;
• interest payable on sitting Judges contributions;
• enrolment of Plan members;
• actuarial valuations of the Plan and Fund;
• regulatory filings with government authorities;
• administration of insured benefits for retired judges; and
• public communications strategies and publications for sitting Judges.

Strategic directions

1. Mission of the Board

   To excel in the administration of pension benefits under the Plan by delivering high quality, cost-effective services to the beneficiaries of the Plan.

2. Core Values

   The Board defines its core values as a commitment to:

   • Excellence in client services delivery.
   • Trust, fairness and respect in the treatment of the beneficiaries of the Plan;
   • Good governance, accountability and transparency of actions to stakeholders and beneficiaries of the Plan;
   • Teamwork from within and outside the Board and results focused leadership;
3. Key Directions

   Three strategies form the foundation of the Board’s business plan. Our focus on excellent client service delivery, effective stakeholder relations and good governance will help the government achieve its priorities in accountability, transparency and financial management, as well as TBS’ priority of modernizing frontline public services.

Strategy 1: Deliver excellent cost effective client service

The Plan is currently in the midst of a major and complex restructuring which, if not properly managed, will pose a challenge to maintaining high quality client service delivery. The Board will need to be vigilant as the project progresses, not only monitoring existing client service reports but also developing and maintaining feedback channels from stakeholders. We are committed to ensuring that our clients receive the same level of service during the Plan redesign implementation period.

Services offered by pension plan administrators are continually evolving in response to changing needs of participants, who are looking to understand and make informed decisions about how they will receive their pension in retirement. Asset division for family law purposes and estate planning are two common examples of situations where a beneficiary may approach the Plan with a request for service. In order for the Board to deliver excellent service we must continue to ensure that we understand our client needs and what they value.

Historically, the Board has assessed the quality of client service delivery through informal consultation with our stakeholders and regular service status updates at the Board’s quarterly meetings. This feedback continues to be useful in assessing basic service delivery; however, we believe that our ability to deliver excellent service requires deeper insight into the client experience and the state of their expectations. For this reason we consider key performance indicator reporting to be a highly desirable requirement and we will advocate for it as we implement the redesigned Plan.

Strategy 2: Foster effective stakeholder relations

As a small trust agency with limited resources, we recognize that our effectiveness greatly depends on the people and organizations around us that have a vital interest in our success. We believe that each of our stakeholders is motivated by their share in responsibility for ensuring the delivery of high quality, cost effective client service.

Our key stakeholders are made up of seven organizations of varying size, each contributing resources in support of different aspects of pension plan administration (see Appendix A for a complete list of PJPP stakeholders). All are located in Toronto and can be easily accessed when the Board requires. For majority of the stakeholders, the PJPP administration represents a very small fraction of their day to day operations. To be effective our interactions must be focused and relevant to their specific role in the Plan and the frequency and type of contact will vary according to the purpose (i.e. inform, consult or collaborate).

We recently reviewed and expanded the types of services we require from our service provider to better support the Board’s governance responsibilities. We now have access to broader range of resources we can draw on to assist with our efforts to obtain feedback directly from stakeholders for the purpose of informing and prioritizing future Client service improvements.

The rewards of a well-executed stakeholder relations strategy can be significant. Service innovation, policy and procedure development and project management can all benefit from engaging our stakeholders’ perspectives. The Board will continue to proactively reach out to our stakeholders, engaging in dialogue about the Plan and its operations, building positive relationships and seeking opportunities for collaboration.

Strategy 3: Strengthen plan Governance

We are acutely aware that governance and accountability continues to be a priority for the government and its agencies, boards and commissions ("ABCs"). As a trust agency and pension plan administrator, an even higher standard of care applies to the Board since it is also expected to act in the best interests of its members and beneficiaries. Strong governance is essential for the Board to ensure all obligations under the Plan are satisfied. The Board will continue to focus on strengthening its governance by building processes and structures that are grounded in the following principles:

1. Access to information – In order to perform its responsibilities and support informed decision making the Board should have access to relevant, timely and accurate information. In some cases, current processes do not support timely retrieval of member and Plan information because the Plan relies heavily on manual processing. We have explored several options for automating pension processes and our preference is to leverage PSPP processes and technologies for PJPP administration within a multi-year modernization initiative currently underway at OPB. The Plan redesign however, has significantly changed the delivery requirements and the Board will need to reassess how best to achieve this objective in 2019.
2. Increasing transparency – Disclosure and transparency are often cited as best practices in a governance framework. In effect, transparency brings another independent level of oversight to bear on Board business which, in turn, enhances its credibility with stakeholders. The Board will continue to pursue opportunities that enhance communications and improve relations with stakeholders and beneficiaries, including sitting judges.
3. Improving accountability – The financial statements of the Fund are audited annually by the Office of the Auditor General of Ontario. While that audit provides important information about the management of the Plan’s operations, its scope is limited because its findings are made relative to the financial statements not specific business processes. Given those limitations, the Board is committed to obtaining an independent assessment of its risk exposure by using tactics that include periodic internal audits. The Board will also pursue improved accountability through consistent ongoing documentation of its procedures, regular monitoring and evaluation of performance and training as required.
4. Performance of fiduciary duties –Given our on-going and stated interest in improving plan governance and our unique perspective as a fiduciary, we believe the Board could play important role in any dialogue on implementing the Plan redesign especially where it has the potential to affect governance. The members and beneficiaries of the Plan depend on the Board to act in their best interests, so we believe we have an obligation to participate in the discussion by contributing our experiences and insights in administering the Plan to ensure any changes affecting future Plan governance are viable and effective.
5. Monitor compliance - Pension plans provide members with a tax effective means to accumulate and then receive retirement savings in the future. As a result, they are heavily regulated under the ITA and must comply with tax rules to maintain their registered status. The Plan Sponsor is responsible for the bulk of the Plan’s tax filing and compliance requirements. However, the Board recognizes the importance of preserving the on-going tax assisted treatment for the Plan’s beneficiaries and plays an active role identifying and resolving emerging regulatory issues. In addition the Board must also assure the Sponsor that it is operating within guidelines for agency accountability and administering the entitlements according to the terms of the Plan. The Board will continue to track its compliance with these requirements at its quarterly meetings and through on-going discussions with the Sponsor.

Overview of current and future program activities

For the three-year period ending March 31, 2022, one project ((a) Implement a Feasible Automation Solution) was initially considered as an autonomous multi-year commitment. Since it will now be subsumed by the plan design implementation project, expected completion will align with the two larger projects and since those details are still being clarified a timeline is yet to be confirmed. Items (b) and (c) below are on-going and part of continuous improvement efforts. Finally, the remaining activity (d) has been activated after several years of being on hold due to litigation. As with (a), project details are still being clarified so a timeline for completion is yet to be confirmed.

1. Implement feasible automation solution - First stage (Status: In progress expected completion: TBC)

   An earlier internal audit noted an improvement opportunity, within the Plan’s administration, that could benefit the Plan and its membership through improved service. The audit advised that since the Plan’s administration incorporated a significant number of manual processes and calculations, the Board should consider whether some form of automation would be feasible.

   In an administrative environment dominated by manual processes, it is generally accepted that technology and process modernization can generate advantages for both governance and benefit administration. But the cost can be prohibitive especially for pension plans such as the PJPP where economies of scale do not exist. Nevertheless the Board committed itself to finding a cost effective solution that will reduce risk and improve efficiency.

   Since this improvement opportunity was first identified the incentive to adopt modernization has become more urgent due to the Sponsor’s commitment to implement the PJPP Plan redesign. The administrative complexity of the new design will require systems and process development on a quicker pace than originally expected. We will need to ascertain whether systems support can be fully achieved through OPB’s pension modernization project and whether temporary stopgap measures will be required.

   We are seeking more information about the implementation, specifically relating to the Board’s role and its responsibilities, to determine how we can contribute most effectively. Supporting the implementation of the Plan redesign including requirements for automation is a priority for the Board in 2019.

2. Improving service and reducing cost (Status: In progress expected completion: On-going)

   The Board presented the need for an Annual Pension Statement (APS) for active members and was then asked by the previous Minister to review and make recommendations on the introduction of an APS. That review is complete and we now have a sufficient understanding of the current state of processes for data collection and transmission among stakeholders. The Board is eager to produce an APS; we view this as an important service improvement for sitting judges. We must however, be mindful that production of an APS in the current environment would be manual and based on data that has not been validated. To ensure high quality and cost effective administration it is likely the APS will be introduced following both the implementation of the redesigned plan and data cleanse. In 2019, the Board with input from the AOJ will issue a generic APS.

   Providing excellent cost effective service is a central strategy for the Board. In the past our key measure was based on satisfying service commitments for response times. More robust performance indicator(s) will provide better insight to the Board on where it could make the most effective service improvements. Before adopting new performance indicators, however, the Board needs a better understanding of what its clients expect and need from a service interaction with the Plan. At this time the Board has decided to pursue the question of client satisfaction directly with the Plan’s stakeholders.

   In 2017, telephone performance reporting became available to the Board. For the first time the Board is able to see Plan call statistics. This is an important step for the Board to meet its responsibilities for assessing client service needs and performance management of its service provider. We receive regular quarterly updates on call trends and for 2019 we have asked OPB to produce an annual (year over year) comparison. Call trend analyses help the Board understand client needs and inform future resource planning.

   The Plan and the Fund are currently administered by a number of branches and areas within the Government, some of which operate outside the authority of, or without review by, the Board. In order to improve service and reduce cost, the Board will continue to look for opportunities to collaborate with the Plan Sponsor on process improvements that deliver high quality cost effective service.

3. Governance framework (Status: In progress Expected completion: On-going

   General pension plan governance principles recommend a plan administrator conduct a regular review of its plan governance. The Board first completed its governance self-assessment at the close of 2017 and again at the end of 2018. We expect the results will allow us to assess the effectiveness of PJPP governance against best practices and prioritize our responses to achieve and maintain good plan governance.

   The Board wishes to document a communication strategy to ensure management and stakeholder alignment with its goals and objectives. The Plan redesign will generate significant communication requirements, we will target 2019/20 plan year for the project start.

   Policies and procedures provide clear direction to the service provider and ensure consistent administration of pension entitlements. The Plan redesign will require an evaluation and restatement of most policies and procedures. During this interim period the Board will document and approve critical policies and ensure supporting procedures are identified for completion as part of the Plan redesign project.

4. Implement ITA compliant plan provisions (Status: In progress expected completion: TBC)

   The implementation of ITA compliant plan provisions has been deferred since December 2013 pending the resolution of litigation relating to an earlier compliance amendment. A working group was formed at the end of 2014 develop solutions and early in 2018, a proposed Plan design was jointly submitted to the 9^th and 10^th Remuneration Commissions with the intention of resolving the issues that initially lead to the litigation. In May 2018, the government formally agreed to implement the new design which finally brings the Plan into compliance with the ITA.

   The new plan design consists of a registered pension plan (RPP), a retirement compensation arrangement (RCA), and a supplemental plan (SUP) and efforts have begun to put the Plan into operation. The complexity of the Plan’s administration requires collaboration among all stakeholders. The Board is committed to working with the Sponsor and each of the Plan’s stakeholders to ensure the plan is operational and in full regulatory compliance.

Resources needed to meet goals and objectives

The Board expects to meet the objectives of its mandate and its strategic directions through the ongoing application and operation of its Service Level Agreement (SLA) with the OPB. Where the SLA does not suffice to meet these objectives or directions, or where an unanticipated expense occurs, the Board will apply directly to TBS for specific assistance and additional resources.

The Board has a comprehensive service arrangement that addresses secretarial as well as pension administration services required by the Board. OPB provides these services on a cost recovery basis and the next opportunity for cost adjustment was scheduled for 2018. No new services have been added to the schedule and no fee changes have been proposed.

Services related to implementation of the Plan design are project fees and not included in the regular administrative and secretarial services fees. We expect the implementation project will generate additional expenses and require access to OPB and TBS staff resources. Project cost estimates and resource requirements will be defined in consultation with TBS and OPB.

Neither the Board nor the Plan generates revenue. Details concerning projected plan expenditures are presented in Table 10.1 found at Section X "Financial Budget and Staffing".

From time to time the Board may require external service providers (e.g. actuarial, legal, and auditing) to satisfy its plan administration responsibilities. Under the terms of the SLA approval must be sought from TBS to incur the additional expenditures. On approval the expenses are invoiced to TBS at cost.

Environmental scan

The environmental scan below provides a description of the business environment in which the Board is operating. It identifies and briefly discusses the considerations used to inform the risk assessment reflected in the Table under Section VII "Risk Identification and Mitigation Strategies".

IT Opportunity and cost

The Board’s Service Provider, OPB, has processes in place to administer an agreed upon schedule of services under the PJPP. Over the years the small size of the Plan has contributed to limited investment in IT solutions and a heavy reliance on manual processes for pension administration services. The redesigned Plan will require we speed up the timeline to address the lack of automation. While that is expected to yield improvements in risk mitigation, quality, cost effectiveness and governance there will be a cost associated with establishing access to and modifying existing OPB systems. Any additional cost generated by participation will require the Sponsor’s consent and approval.

Sponsor’s fiscal constraints

Expenses of the Plan are paid directly by TBS. Basic pension administration and secretarial services account for the bulk of the Plan’s administrative expenditures. The services are outsourced to OPB and are provided on a cost recovery basis. Changes to the fee and service schedule were recently implemented and take into account increased transaction volumes and expanded scope of services. The Board and the Sponsor have obtained a necessary level of service that balances the Board’s obligations with the fact that fiscal responsibility is a key priority for the government. Services required to implement the Plan redesign however are outside the scope of the service agreement and will require additional funding.

Stakeholder involvement

Membership of the Plan is composed of individuals who are considered legally and financially sophisticated. In the past, Board-related pension issues were typically raised by individuals and resolved in that context. Over the past several years the AOJ has signaled a greater interest in the Pension Plan and its governance framework. As a stakeholder, the AOJ represents sitting and retired Judges who are also members of the Plan. The Board values the AOJ as a key stakeholder and has established regular opportunities for dialogue in an effort to develop and maintain good relations, improve transparency and assess our service delivery.

On-going litigation

Ontario Regulation 290/13 amended the PJPP to bring its terms into compliance with the ITA. The amendments do not affect the amount of pension payable to a retiree or survivor but do affect certain payroll processes which are the responsibility of OSS and OPB since the funds needed to be allocated between two accounts; one delivering benefits that fall within the maximums for Registered Pension Plans and another that delivers benefits that exceed those limits.

In December, 2013, an application was filed with the Ontario Superior Court of Justice asking for an order declaring the amended Plan provisions unconstitutional and unlawful. The Application has since been adjourned and the original Standstill Agreement, which was established to maintain administration of the Plan according to the old provisions, was most recently extended to May 1, 2019. The Board continues to monitor its legal costs and the increasing administrative complexity associated with the delay and ongoing compliance with the Standstill Agreement.

Provincial Judges Remuneration Commission (the "Remuneration Commission")

Compensation for Judges is determined through a commission process prescribed within the Framework Agreement. The 9^th and 10^th Judicial Remuneration Commissions have made their recommendations and they include changes to the Plan’s design. The next Judicial Remuneration Commission will consider periods on and after April 1, 2022.

Agency accountability requirements

In an effort to strengthen accountability and clarify roles and responsibilities in the Broader Public Sector the government has been providing more frequent guidance to its ABCs. Many organizations, including this Board, have found the directives helpful in more precisely defining their obligations and government expectations. Owing to its structure and mandate, the Board recognizes that it is reliant on both TBS and OPB processes and resourcing for compliance. Despite this reliance, the Board consistently and firmly asserts its independence in all actions and decisions affecting interests of Plan beneficiaries.

Sensitivity of Judges data

Personal information belonging to sitting and retired judges is extremely sensitive and if accidentally disclosed could have a serious effect on the privacy and personal safety of the individual judge. The Board recognizes the special circumstances that apply to judges and requires that OPB ensures personal information is adequately secured prior to transmission by mail or electronic means. In addition, the Board relies on OPB’s well-established privacy and disaster recovery policies that reduce the risks associated with a major event.

Risk identification assessment and mitigation strategies

Human resources

The Board has no staff. There is, as a result, no human resources impact, and no need for a compensation strategy or benchmarking against other public sector bodies. See paragraphs (b) and (c) under Section XV (see page 24) below for additional details.

Performance measures

At its quarterly meeting in September 2017, the Board began receiving a call trend analysis. Call performance data now complements the other established measures, such as the 60-day limit for case processing and the double verification requirement, which it is currently tracking. Compliance with these measures is monitored at the Board’s regular meetings to ensure timely, quality service and accuracy. The Board will review and document its requirements for expanded performance measures in 2019.

A key challenge to improved performance reporting is the state of automation within PJPP business processes. In fact, the lack of process automation in the Plan makes it less cost effective to administer since performance information must be collected and organized manually. The Board will include enhanced performance reporting as part of its business requirements for the project to implement the Plan design.

Financial budget and staffing

Daily administration of the Plan and Board secretarial support is outsourced to OPB under a service level agreement. Currently these services are supplied on a cost recovery basis and paid by TBS to ensure PSPP funds are not used to administer another plan. Fees are evaluated on a three year cycle and the most recent fee review would be effective in the current fiscal year. No new services have been added to the Schedule and no fee changes are proposed at this time. Services provided outside the scope of the SLA are charged back to TBS at cost and as a result we expect the Plan design implementation project will generate a noticeable increase in these charges. The Board does not generate revenues.

Table 10.1 - Financial budget and staffing (Figures exclude HST)

Note: Investment Management and fund related expenses are not included in these estimates.

Information technology/Electronic service delivery plan

Plan membership is extremely small relative to other Broader Public Sector plans. The PJPB does not have a website and use of information technology is limited to record keeping and data transmission to support payroll.

The Board is acting on recommendations from an internal audit report dated April, 2014 suggesting it should determine whether automating current manual processes might produce efficiency gains and mitigate certain data risks. Under the SLA between OPB, TBS and the PJPB, any system modifications that generate additional costs for TBS will require their written consent and approval.

In 2017, the Board’s service provider OPB began a multi-year project to modernize its pension information technology systems. Participation in a project of this scale appealed to the Board because it is expected to yield state of the art administrative tools for PJPP use, at a substantial cost savings for the Plan Sponsor. At the time, OPB agreed to provide more information to help us assess the cost and extent of our participation.

Since then the Sponsor has committed to implementing the Plan redesign recommended in the 9^th and 10^th Provincial Judges Remuneration Commission. So far the Sponsor is favouring an ambitious timeline which does not seem likely to align with OPB’s multi-year plan. In consultation with the Sponsor and other stakeholders we need to determine how a phased implementation could work so that risks, including cost, are managed effectively.

In the meantime, implementation of the Plan redesign will require a system solution that supports basic automation. OPB is clarifying project requirements for delivery of basic system support for the PJPP. Cost will be known once the scope of work has been determined.

Initiatives involving third parties

At present, the only third party with whom the Board has an SLA is OPB. The Board commits itself to monitoring its agreement with OPB as well as the services provided by OPB and to maintaining harmonious working relationships with other stakeholders administering the Plan. We have confidence in OPB as our agent and we expect they will continue to provide pension administration services in respect of the Plan.

From time to time the Board requires advice on emerging legal issues affecting its obligations and the administration of the Plan. The firm of Borden, Ladner, Gervais ("BLG") was retained to provide legal services to the Board relative to current litigation arising from the government’s restatement of the plan to bring it into compliance with the ITA. The engagement complies with Ministry of the Attorney General’s guidelines for engaging external counsel and TBS is responsible for payment of invoices. This is expected to continue into 2019.

In addition, the Plan’s actuaries, AON Hewitt, provide actuarial consulting services under contract to TBS. These services include preparation of on-going funding valuations of the plan and more complex entitlement calculations such as determining the commuted value of individual entitlements for the purpose of family law valuations.

Actuarial calculations relating to the split of the Plan’s Fund for ITA compliance were performed as at March 31, 2012. However, in accordance with the "Standstill Agreement", no action has been taken to establish a supplementary account. Once litigation is resolved the Board and the Sponsor will determine the nature and scope of any additional actuarial work including a full Plan valuation.

Implementation plan

During the three-year period covered by this Business Plan, the Board will oversee the following processes, tools and opportunities to monitor, assess and review the specific items or issues listed below.

Deliver high quality cost effective client service

• Maintain all service levels during transition to redesigned plan
• Deliver Pension Automation Solution
  • Engage Working Groups and establish automation as a project deliverable
• Increase awareness and facilitate client feedback on service delivery
  • Continue to report on service delivery as agenda item for all stakeholder meetings.
  • Develop and refine expanded reporting needs on service delivery and include as a standing agenda item at quarterly Board meetings.
  • Create special facility to monitor implementation related feedback
• Work with the Sponsor and stakeholders to identify and resolve data requirements needed to support pension communication initiatives.
  • Complete a data cleansing initiative as part of the Plan design implementation
• Create a beneficiary communication plan when new policy/procedure introduced.
• Pending the introduction of an APS for individual active members, in 2019 the Board will issue a generic APS

Foster effective stakeholder relations

• Regular face to face stakeholder meetings with the Board on plan matters.
• Assess the need to inform, consult and collaborate with each stakeholder as part of each communication initiative and effect decision.
• Implement stakeholder engagement strategy on appropriate initiatives.

Strengthen plan governance

Increasing transparency

• Co-operate with Chief Justice’s Office to refresh Plan information hosted on their Intranet site which is accessible by all sitting and per diem Judges.
• Board review and approval of all PJPP communications on behalf of PJPB including those related to Family Law amendments and future Remuneration Commissions.
• Provide consultation opportunities for stakeholders including the Office of the Chief Justice and Association of Ontario Judges on Board initiatives and communications.

Improving accountability

• Annual review and assessment of Board’s service providers relative to established key performance indicators.
• Continue to document and approve new PJPP policies and procedures.
• Annual governance self-assessment of the Board.
• Periodic internal audits.
• Participate in any agency appointee learning or development opportunities as required.

Performance of fiduciary duties

• Shape the future of PJPP governance by participating in discussions with and sharing the Board’s experience with its key stakeholders.
• Ensure that Board members are informed of conflict of interest rules that govern the Board.
• Participate in agency appointee learning or development opportunities related to trustee or fiduciary duties as required.
• Fair and impartial interpretation of the Plan provisions.

Monitoring compliance

• Track compliance with regulatory and agency guidelines through regular reporting at quarterly Board meetings.
• Obtain support from TBS or OPB on interpreting new or amended requirements and update Board members.

Communication plan

Our ability to deliver high quality service offerings starts with effective communication between the Board, the Plan’s beneficiaries and its stakeholders. We also believe that good communications help create an environment of trust and openness that is vital to collecting feedback on how we can continually improve the client service experience. The Board will continue to focus on improving the exchange of Plan related information needed to support informed decision-making in all aspects of the Plan’s administration.

The Board’s approach to communications is shaped by its limited capability for digital communication. Maintaining an independent website is not feasible at this time and while we have had some access to post some communications in the Judges Manual on the Chief Justice intranet site, the Board relies on more traditional oral and written communication platforms to reach its audiences. All communication products are developed in-house and approved, by either the Board or the Chair as appropriate, prior to distribution.

Communication with retirees, sitting judges and other beneficiaries are typically undertaken to transfer information relating to an entitlement under the Plan. Our clients need access to knowledgeable staff that can provide timely, personalized communication. The Board plays an active role in the development of administrative policy which is used to guide development of written operational procedures by OPB, our service provider. Documenting procedures and template communications to support staff will ensure our clients receive consistent and accurate information each time they contact the Board. In the coming years we will continue to clarify administrative policy with respect to emerging pension issues including: future Remuneration Commissions and litigation related to O.Reg. 290/13.

Transparency and openness are cornerstones of trust and are hallmarks of our approach to communications. We strive to ensure our stakeholders have access to information and an opportunity for dialogue about the Plan’s financial and operational performance. Public communication and consultation are outside the scope of the Board’s mandate but we are committed to consultation with our stakeholders in advance of administration changes that may have a direct effect on them or their constituents.

Responsibility for communication of Plan related information has historically been determined by the beneficiaries’ status under the Plan. Communication with sitting Judges is generally undertaken by the CJO and in some cases the AOJ, while responsibility for communication with retirees and survivors rests exclusively with the Board. Although the Board has no formal mandate to proactively communicate with sitting Judges, it nevertheless takes an active interest in monitoring and where appropriate collaborating on the preparation Plan information being prepared by other stakeholders.

The Board completed its review concerning the introduction of annual pension statements for active members and would like to see this program introduced in conjunction with the redesigned Plan implementation. Regular communication with members about their accruing pension is a basic service available to members of registered pension plans across Ontario. The Board understands that viable recommendations will demand a consultation process among our stakeholders that applies the same principles of transparency and openness. We are committed to collecting the views of the various stakeholders to ensure our recommendations are not only beneficial to the membership but feasible for those responsible for their implementation.

The Board will continue to identify opportunities for communication that will help active members, retirees and survivors make informed decisions concerning their pensions. The Board will also create opportunities for stakeholder feedback by consulting the CJO and AOJ frequently on these and other pension administration services to assess client satisfaction and suggested changes.

Finally, as part of determining our requirements for automating pension payments; we should consider the impact of automation not only on quality and cost effectiveness of existing administration but also, whether we should develop capability for digital communication.

Organizational chart and reporting structure

• Deborah Oakley - Chair - November 14, 2018
  • Lisa Philipps - Member - February 26, 2020
  • Elizabeth Boyd - Member - June 1, 2019

1. Board composition

   The Province appoints Board members by Order-in-Council for specific terms. Ordinarily there are three Board members, each of whom initially holds office for up to three years. One of the members is designated by the Province as the Chair of the Board. Members may be re-appointed when their terms of office expire. The Board normally meets four times a year, but may schedule additional meetings as workload demands.

   Deborah Oakley’s reappointment as Chair was formally confirmed effective November 14, 2015^{footnote 9[9]}. After retiring as a senior executive with OMERS, Ms. Oakley established her own consulting firm and provides executive and association management services, largely to organizations in the justice sector.

   Originally appointed to the Board in April 2013, Elizabeth Boyd was reappointed for an additional three year term in June 2016. Ms. Boyd is a Partner with a major law firm in Toronto and her practice focuses on Pensions, Benefits and Executive Compensation.

   Lisa Philipps joined the Board effective February 26, 2014 and is the Provost & Vice-President Academic of York University.

2. Accountability relationships

   The Chair is accountable to the President of Treasury Board for the performance of the Board in fulfilling its mandate. Specific responsibilities are assigned to the Chair by Regulation, its MOU and the applicable Ministry/Government policies and directives.

   The Deputy Minister of TBS is accountable to the Secretary of Cabinet and the President of the Treasury Board for the performance of the Ministry in providing administrative and organizational support to the Board so that it can perform its responsibilities.

3. Administrative and organizational support

   The Board has no staff, so secretarial support and its actual day-to-day work is outsourced to OPB through a tripartite SLA that includes TBS, the Plan Sponsor.

   Implementation of pension design and policy changes is the responsibility of the Plan Sponsor, as represented by TBS. Management within the Centre for Public Sector Labour Relations and Compensation, Total Compensation Strategy Branch, also ensures the Plan’s regulatory reporting requirements are met and that all expenses associated with running the plan, including expenses related to legal and actuarial support are paid.

   OPB is the provincial trust agency with responsibility for administering the PSPP and investing its fund. In addition, it has delivered both pension administration services and board secretarial services to the PJPP Board on a cost recovery basis using its operational infrastructure, management and staff resources since 1999.

Appendix "A"

PJPP stakeholder roles summary

Appendix "B"

Classified Agency Directives and Guideline Applicable to the Provincial Judges Pension Board

• Agencies &Appointments Directive
• Advertising Content Directive
• Travel, Meal & Hospitality Expenses Directive
• Records Management Guideline
• Visual Identity Directive
• Procurement Directive on Advertising, Public and Media Relations and Creative Communications Services
• Procurement Directive (to the extent applicable to the Board as an "Other Included Entity")
• Freedom of Information & Privacy Directive
• Disclosure of Wrongdoing Directive

Appendix "C"

Risk assessment - Scale descriptor definitions

Likelihood scale

Impact scale