2022 Provincial Judges Pension Board annual report

Message from the chair

At times, 2022 left us wondering what could happen next. War in the Ukraine, our careful emergence from a worldwide pandemic and rates of inflation we had not seen since 1982; issues seemed to emerge weekly, continuously redefining our priorities. It was against this backdrop that the Provincial Judges’ Pension Board (PJPB) continued working to define the objectives of our key investment strategies, carefully manage our responses and refine our administration structure to take full advantage of emerging trends.

The Board has always taken its investment responsibilities very seriously, so a key priority for the PJPB in 2022, was to finalize our Investment Management Agreement (IMA) with IMCO, the Plan's strategic asset allocation, and the Statement of Investment Policies and Procedures (SIPP). Since its inception interim provisions of the IMA required the Fund to be entirely invested in low-risk money market accounts. This interim strategy allowed the Board to protect the Funds from volatile markets but long-term returns would not be adequate to support the Plan's funding requirements. Completing this policy framework would allow the Board to begin transitioning the Fund's asset mix to achieve risk adjusted returns and address long-term needs.

Early in the process of establishing the new funding structure, the Board along with the Association of Ontario Judges (AOJ), and Treasury Board Secretariat (TBS) began discussions regarding investment of the Fund and they continued throughout 2022. The situation was complicated by the retirement of the AOJ’s representative from the Board in November. As the year ended, the Board concluded it would be prudent to defer key plan decisions affecting investments until 2023 when the process to appoint a new AOJ Representative to the Board might be complete.

Despite these challenges, I was very happy with our progress in 2022. We managed to move several initiatives forward including the implementation of management roles and responsibilities and development of business continuity plan. All while continuing to deliver high quality pension services, and recurring and ad hoc communications with Plan members like the Annual Pension Statement and notice on the per diem rate suspension provisions. A full list of our accomplishments along with commentary appears under the "Year in Review" beginning at page 5 of this report.

In addition, we also adopted policy to help define how we want to interact with stakeholders (PJPB Stakeholder Engagement and Information Sharing policy), and to meet the needs of members and beneficiaries in special situations (Disabled Child Policy update). Documenting these and other policies will help ensure a repeatable, consistent approach is taken by OPB’s operational staff, especially when orienting new employees.

Throughout 2022, we sought opportunities to consult our key stakeholders, AOJ, and TBS. As we point out in our business plan, which will be available on the government’s agency accountability web page, we believe these consultations will only serve to strengthen our relations with each stakeholder. These discussions demonstrate our commitment to accountability and transparency at this critical stage of implementation.

After serving nearly 2 years of his term Justice Thomas McKay decided to retire as a full-time justice of the Ontario Court of Justice and from his appointment to the Board. Justice McKay was appointed using new provisions of the Plan that require one member of the Board be recommended by the AOJ. He was a highly valued member of the Board and an extraordinary colleague, his insights and enthusiasm for this plan will be missed going forward. His contributions during his term were deeply appreciated.

I was honoured to be able to continue to serve as PJPB Chair in 2022 and I must express my gratitude to my Board colleagues for their invaluable contributions over the period. Their passion, perseverance and breadth of knowledge has helped build a strong governance framework that will serve the members and beneficiaries of this plan well into the future. I also want to acknowledge the AOJ for their enthusiasm and deep commitment to protecting the entitlements of the membership. Moreover, their feedback over the review period has been instrumental in developing meaningful member communications and pension policy.

Finally, on behalf of the Board, I also want to acknowledge the professionalism and support provided every day by the capable staff at Ontario Pension Board, Treasury Board Secretariat, and the Investment Management Corporation of Ontario.

Once again, there is still more work to do to complete the transition to a mature plan design and governance structure and I look forward to new initiatives and accomplishments in 2023.

Deborah A. (Debbie) Oakley
Chair, Provincial Judges Pension Board
September 21, 2023

The year in review

Throughout 2022 the Board’s priority was to establish a sound governance framework for the administration of the Plan.

Interim ecommunication and fulfillment solution

What we said

The APS project highlighted the need for a secure method of electronic communication between the Board and sitting judges. We were grateful to The Chief Justice Office for facilitating electronic delivery of the APS by providing access to their e-mail system. The Board requires a temporary, secure. communication channel until it can establish a permanent solution within OPB’s communication infrastructure. We will need to assess options and decide the matter early in 2022 to permit secure delivery of the next APS in September 2022. Ensuring that the Board is in a position to communicate electronically is consistent with government-wide priorities to adopt digital delivery.

What we did

Obtained permission to extend an arrangement to access the government’s secure email system for the Ontario Court of Justice.

Updated the APS package for currency. The package included a communication from the Chair, a guide to the statement and the statement itself.

After the project was completed, we conducted a brief satisfaction survey with the recipients.

OPB Call Centre and the PJPP Administration Team received additional support to prepare for an increase in client contact.

Result

Delivered 276 digital, password protected, Annual Pension Statements and supporting communications. Delivery was completed using a secure channel trusted by the membership.

There were no reported incidents of unauthorized disclosure of personal information.

More than 97% of the respondents to the APS survey expressed satisfaction with the content and security.

The APS survey collected additional feedback that will be used to improve the next APS in 2023.

Transition to New Strategic Asset Allocation

What we said

The Investment Management Agreement (IMA) between PJPB and IMCO includes a schedule of permitted investments and restrictions to be in place until a Statement of Investment Policies and Procedures (SIP&P) is approved. The investment objective of the short-term investment strategy is to provide a highly liquid portfolio of money market securities comprising predominantly of Canadian Government T-Bills and high-quality short-term securities. The primary focus is on capital preservation and liquidity given the increased level of market volatility and uncertainty due to the ongoing COVID‑19 pandemic economic impact. Final adoption of the Strategic Asset Allocation (SAA) and SIP&P will enable the Board to begin shifting fund assets from the existing investment portfolio toward its selected long-term optimal investment portfolio. The Board will need to consider the implementation timeframe required to move to the new asset mix based on ongoing advice and consultation with its expert advisors (Aon and IMCO).

What we did

Transition was deferred pending resolution discussions between TBS and AOJ.

Once the SAA is approved the Board will begin shifting fund assets from the existing investment portfolio toward its selected long-term optimal investment portfolio.

An implementation plan setting out expected timelines required to move to the new asset mix needs to be developed in consultation with IMCO and the Board’s independent investment advisor.

Result

Final adoption of the SAA and SIPP has taken longer than expected due in part to consultations between TBS the AOJ.

In the meantime, Plan assets continue to be held in IMCO’s standard money market strategy on the list of permitted investments.

The Plan assets continue to earn investment returns in line with IMCO’s standard money market strategy approved in the shortterm.

Establish PJPB ESG/Investment Beliefs

What we said

Many Canadian and international pension plans have adopted policy to set out how they want to incorporate ESG factors into their investment decision-making. The Board will consider whether to proceed with documenting its ESG/Investment Beliefs in 2022.

What we did

In the Fall of 2022, PJPB began discussions with IMCO that included a presentation and Q&A with the Board regarding their approach to ESG.

At the same time consultation with AOJ on the topic revealed concerns that addressing the Board’s position on ESG might compromise their fiduciary obligations to the members.

Result

The AOJ’s view on ESG, reveals the priority the membership assigns to the Board’s oversight of the Plan’s assets. The Board will need to consider how it can improve communication on investment topics like ESG in the future.

The Board recognizes that ESG can support a fiduciary’s oversight by providing a helpful framework for assessing investment risk.

The Board has not adopted a formal policy view on ESG. The absence of an AOJ Representative on the Board cannot be overlooked, and we look forward to involving a new appointee in this important debate.

Implement OPB Management Roles and Responsibilities

What we said

A key issue for the Board during the implementation of Plan redesign was the management structure it required to properly carry out its responsibilities as trustee and plan administrator. Rather than adopting the "distributive" management model that was previously in place and would require its members to perform traditional management functions, the Board favoured consolidating responsibility for plan operations management with OPB. The new Service Level Agreement (SLA) between PJPB, OPB and TBS reflects this expanded role. Fees for the new services have increased from initial estimates due to the revised nature of the responsibilities (i.e., OPB assuming a management role) but continue to be provided on a cost recovery basis. In addition to day-to-day responsibility for managing plan operations, programs and activities that require implementation include:

• Establishing measures that will allow the Board to assess OPB’s performance;
• Ongoing policy and procedure development that will document delegations of Board authority and define new administrative processes for OPB;
• Delivery of regular strategic and priority updates including risk management;
• Establishing PJPP Communication Policy;
• Agencies and Appointments Directive (AAD) compliant procurement of required service providers (e.g., actuarial, and legal) for the Board;
• Ongoing development of governance and operations structures and processes to support PJPB oversight of the redesigned Plan and its funds; and
• Ongoing consultation on emerging plan issues and projects.

What we did

On a resolution by the Board, the SLA was approved, and the Chair was authorized to sign on behalf of the Board.

The SLA defines the services, responsibilities, expectations, and remuneration related to OPB’s role in delivering and managing pension administration.

Consultations between the PJPB, TBS and AOJ also contributed longer than expected timelines for approval.

During this period OPB was remunerated for services at the rates set within the SLA.

Result

The agreement is effective for the 5-year period from October 1, 2022, to October 1, 2027.

Initially the fixed fees will be in effect until October 1, 2024, at which point OPB will be able to propose adjustments to PJPB and TBS.

In keeping with its commitments to transparency and strengthening stakeholder relations, the Board insisted on consultations with AOJ. AOJ actively participated in this process and played a vital role in defining the Plan’s operations.

The agreement ensures that PJPB has access to a highly skilled pension administration workforce, systems, and processes to cost effectively administer the Plan and support the Board.

Revise Board Mission and Values statement

What we said

The mandate of the plan has changed, and the existing Mission and Values statements need to be modernized. A restatement of the Mission and Values will inform the Board’s Communication policy and will be reflected in the 2023 business plan.

What we did

Board began discussions in the summer of 2022.

The Board reconsidered original plans to engage a consultant to facilitate the initiative, in favour of "in-house" development.

Initial concepts and options were developed with the Board’s feedback and compiled into a working document.

The project was reprioritized due to constraints on key Board resources.

Result

The restated Mission and Values were not required content for the 2023 Business Plan.

The Board continued to refine its Mission, Vision, and Values and expects to complete the final version in 2023.

The Board will need to assess its consultation requirements and the effect of the current appointment vacancy on the Board before finalizing the statement.

Develop and approve business continuity plan with service providers (OPB and IMCO)

What we said

The COVID Pandemic struck just as the Board was implementing new governance structures and processes to oversee the Funds and Plan. Our ability to carry out our fiduciary obligations to the members of the Plan was not affected due to OPB’s and IMCO’s existing business continuity plans that helped mitigate risk during this challenging period. The Board needs to be certain that it can interact effectively with its key service providers when responding to a risk event affecting the Plan’s investments, and governance and operations. Establishing a more formal mechanism to assess that capability will support the Board’s risk management capabilities.

What we did

PJPB has confirmed that its service providers have Business Continuity Plans in place that have processes to notify PJPB and manage incident responses.

Work on the PJPB Business Continuity Plan that incorporates key service providers into the overall design, continued through the end of 2022.

The project was reprioritized due to constraints on key Board resources.

Result

Draft Business Continuity Plan to be presented at March 2023 Board Meeting for feedback.

Final draft submitted to PJPB for approval at June 2023 Quarterly meeting.

Develop IT Electronic Service Delivery Plan including proposal for website development

What we said

The Board considers the development of IT service delivery to be vital for improving our service offerings as well as making progress against government priorities for digital delivery and customer service. We believe that creating a service delivery plan will help define the Board’s expectations so we can more effectively explore interim and longer-term solutions that take advantage of OPB’s system modernization initiative initiatives and deliver a more cost effective PJPP solution.

What we did

PJPB began formal discussions with OPB regarding its options for developing an IT/Communications Strategy.

The strategy would involve modernizing the PJPP through technology, communication, and related governance enhancements to performance reporting and workflow tracking, which could be made available through work already being done by OPB.

OPB was asked to develop scope, budget, and timelines for enhancements to technology and communications so the PJPB could determine which options were most feasible for this application.

The Board continued to refine the scope of its request through ongoing discussions with OPB.

A budget allocation for the initiative was included in the 2023 Business Plan with project specifics to be prepared in 2023.

Result

The Board agreed that both a website and a self-service intranet portal would be valuable service enhancements.

However, a decision on whether to pursue changes would be dependent upon the cost involved.

Under the SLA, the addition of new services would have a financial impact requiring consultation with TBS.

Initiatives involving member communications will also need to include AOJ consultation.

OPB must assess resource impacts and develop a project timeline in 2023.

Review and update Board self-assessment program

What we said

Board self-assessment is considered best practice and the PJPB has engaged in a selfassessment process in prior years. The current program needs to be assessed to ensure it is aligned with the Board's expanded mandate. The Board will consider what, if any, adjustments are required for the reconstituted Board.

What we did

Self-assessment questionnaire was revised from previous versions and provided to the Board members for completion.

Individual responses were kept anonymous.

Results were discussed privately among the Board members.

Result

Although the response rate was less than 100% the survey yielded useful information on Board member perceptions.

Common themes included satisfaction with the Chair, Board member participation and contributions to strategic planning/issues, service providers, and meetings and materials.

Areas requiring attention included: increasing Board member education and decreasing the volume of meeting material.

Assess new Board member orientation needs and develop a formal on-boarding program

What we said

A good Board member orientation program provides new members with important information about the Plan, the Board, and their responsibilities so they can quickly transition into their new role.

Currently PJPP Board has several orientation tools available but defining the process will help achieve consistent results for a more efficient transition into their Board role.

What we did

In December 2022, using guidance published by the Institute of Corporate Directors (ICD), the Board adopted an orientation process for new appointees.

Result

The process covers ten topics and assigns responsibility for their delivery to one of four sources: The Chair; OPB Plan Executive; Investment Manager; and an operational group (OPB).

Each source was chosen with the goal of providing the new Board member with an opportunity to gain insight on their role as it relates to the specific topic while introducing the Board member to the leaders responsible for delivery of the PJPP work.

Each orientation source will be responsible for content delivery.

The program will be managed by OPB.

Update performance measurements for service providers according to emerging requirements

What we said

The Board needs to consider the effectiveness of current Key Performance Indicators (KPI’s) in the redesigned plan setting.

What we did

This is an on-going commitment by the Board.

New "dashboard" reporting was created in October 2022 and piloted with the Board.

Result

The dashboard style of service reporting was accepted by the Board.

The new report combines all service points into a single document for easier comparison by members of the Board.

KPI development is continuing.

Complete Annual Actuarial Valuation

What we said

The Board is responsible for completing future valuations of the RPP and RCA only. An initial actuarial valuation was prepared for the Provincial Judges Registered Pension Plan as at January 1, 2020. Under the terms of the Plan, valuations must be completed annually, and the next valuation will be prepared as at January 1, 2022. The next valuation for the purpose of funding requirements should be filed with CRA no later than December 31, 2023.

What we did

PJPB determined that it is required to prepare annual actuarial valuations of the Plan.

The Board decided to move forward with annual valuations that will include all three components of the Plan (i.e., RPP, RCA and SUP).

This approach will allow for a complete view of the Plan and help with decision-making on contribution flows between the components.

Aon, the actuary for the PJPP, was tasked with preparation of an actuarial valuation of the Plan as at January 1, 2021.

Result

Valuation results as at January 1, 2021, were presented at the June 2022 Board meeting.

Results were for informational purposes only. Until the SAA was approved and a discount rate set, final results could not be provided.

In the future the PJPB will use its quarterly June meeting cycle to determine whether to file the RPP valuation with CRA.

Annual review of Statement of Investment Policies and Procedures

What we said

The PJPB SIP&P document was established voluntarily so the frequency of Board review is not mandated. Plans governed by provincial pension legislation must be reviewed annually as a minimum. The Board will need to clarify its approach.

What we did

PJPB was not able to finalize the adoption of the initial SIPP due in part to consultations between TBS and the Association of Ontario Judges (AOJ).

Result

The reason for the delay is that there are ongoing discussions between the AOJ and TBS on what role the AOJ has in strategic decision making.

As such, key documents such as the IMA are not being approved until this dispute is resolved.

The Plan is not subject to the Pension Benefits Act and as such there no adverse regulatory impact on the Plan or funds for not adopting a SIPP and commencing annual reviews.

Operational performance

Delivery of Pensions

In 2022, PJPB continued to deliver high-quality cost-effective services to the Plan’s membership. At the end of the year, 353 beneficiaries were receiving either a pension or survivor allowance from the PJPP and 282 full time sitting judges were actively accruing pension entitlements.

In the twelve months ending December 31, 2022, the Board conducted four regular quarterly meetings to consider regular business (e.g., approval of pension payments, operational updates) and special approvals mostly related to governance and redesign implementation. An additional nine working meetings were convened to consider special business related to the implementation or facilitate briefings with key stakeholders.

The Board monitors its service providers through regular reporting on pending and outstanding work at its quarterly meetings. The Board also relies on the quarterly presentation of the PJPP Call Activity Report to assess telephone service delivery performance. These reports facilitate Board oversight of service delivery relative to commitments within the service agreements.

For 2022, the PJPB met or exceeded its client service standards over the period of this report: no application for pension or other benefit from the Plan, or pension estimates, took longer than 60 days in total to process.

Once again there were no requests for adjudication or appeals of decisions made during the reporting period. At its regular quarterly meetings, PJPB reviewed and approved twenty-five new annual pensions and survivor allowances, all under the new plan provisions that require calculation of the three-tiered pension benefit entitlement. In the reporting period ending December 31, 2022, there were no applications for lump sum payment in respect of a family law settlement, nor were there any refunds of contributions on resignation.

The corresponding annual value of new pensions and survivor allowances approved by the Board for payment was $5.009 million. All pension payments commenced on time and within service commitments.

Annual Cost of Living Adjustments

The Plan provides for annual cost of living increases that are calculated using two different methods. Depending on the judge’s eligibility, they may receive either a Consumer Price Index (CPI) adjustment every January 1st or an adjustment based on the Industrial Aggregate Index (IAI) (Canada) given to sitting judges each April 1st. These payments are approved each year by the Board and there are two adjustments in total paid in the fiscal year.

Effective January 1, 2022, the CPI based COLA was calculated as 2.4%. It was applied to a total of 212 pensions and survivor allowances and went into pay as planned on January 22nd. Every individual whose pension was affected received a personalized communication advising of their increase and providing a brief explanation of the COLA calculation.

In October 2022, the Board made escalation adjustments to 139 pensions and survivor allowances to reflect the annual IAI salary adjustments under the Framework Agreement on Judges’ Remuneration. Pensions for affected retired provincial judges or their survivors were increased by 1.80% effective April 1st. with retroactive amounts owed paid in a lump sum. The adjusted pensions and retroactive amounts were paid as expected on October 21, 2022.

In addition to the immediate effect on pensions and survivor allowances in pay, the change required recalculation of 10 new pensions for individuals retiring after April 1st effective date and 99 earnings limits for judges continuing to serve in retirement. In total 250 personalized notifications explaining the changes were delivered to affected members.

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 ensure personal information is properly secured, especially prior to transmission by mail or electronic means. Member communications containing personal information (e.g., Annual Pension Statement) have been deployed according to OPB’s well-established privacy policy and processes. As a result, the Board was able to successfully mitigate the risks associated with a privacy breach.

Financial performance

Until recently, the Provincial Judges’ Pension Plan (PJPP or the Plan) operated as an unfunded Plan, with member contributions held by, and pension payments made entirely from the Province’s Consolidated Revenue Fund (the CRF). In 2020 important changes were made to the funding framework, as two components of the Plan, the Registered Pension Plan ("RPP") and the newly created Retirement Compensation Arrangement ("RCA") became funded pension arrangements, with assets being held and invested under newly created trusts. The third component of the Plan, the Supplementary Plan (SUP), would continue to be funded from the Province’s CRF.

Throughout 2022 vital discussions continued between the AOJ, TBS and the Board regarding issues affecting the Plan’s adoption of a Statement of Investment Policies and Procedures (SIPP), completion of the long-term Investment Management Agreement (IMA) with the Investment Management Corporation of Ontario (IMCO) and transition to a long-term Strategic Asset Allocation (SAA). While the discussions were on-going the RPP’s assets remained invested in Canadian Treasury Bills and highquality short-term securities; a strategy that is consistent with the interim provisions established within the Board’s IMA. The purpose of the approach is to maintain safety and liquidity until the strategic asset allocation can be implemented. As expected, Fund returns for the year were reported as 1.6% (net of expenses) and are reflective of the conservative strategy.

Regular member contributions equal to 7% of salary continued to flow into the RPP and RCA during the reporting period. Member contributions that exceed the maximum amount permitted for an RPP are remitted to the RCA. In 2022, the province contributed just over $3M per month to the RCA as combined special funding and member matching payments. Fifty percent of these payments, along with the member contributions are sent to a Refundable Tax Account with the Canada Revenue Agency.

An initial actuarial valuation was prepared for the Provincial Judges Registered Pension Plan as at January 1, 2020, for the purpose of establishing the Plan’s contribution requirements in accordance with the Income Tax Act, until the next actuarial valuation is performed. The valuation was filed with Canada Revenue Agency (CRA) and the actuary’s recommendations for employer contributions to the Plan were approved.

Since then, the Board has adopted the practice of preparing annual valuations to monitor the funding framework of the Plan on a regular basis. However, the Plan’s lack of invested assets meant an appropriate discount rate could not be established for use in the valuation. Setting a realistic discount rate is vital to achieving the long-term financial health of the Plan and the Board necessarily deferred preparation of the January 1, 2022 valuation.

Under the provisions of the Income Tax Act a plan valuation report must be filed with CRA within 4 years of the most recently filed valuation, unless there’s a plan amendment affecting funding. The Board did not file a valuation as at January 1, 2022 fiscal year but will need to file a valuation with Canada Revenue Agency by the end of 2023.

The Board is responsible for the administration of the Plan and investment of its funds but has no employees to carry out its responsibilities. Both OPB and IMCO have personnel, facilities, systems, and processes in place to administer all aspects of a pension plan and fund. OPB and IMCO have been named to play key roles in supporting the Board and are providing defined services to the Board on a cost recovery basis. Plan expenses related to RPP and RCA administration are paid from the respective funds. Expenses relating to the SUP are paid directly by the Province. In 2022, total pension administration expenditures ($1.793M) exceeded PJPB estimates ($1.734M) by 3.4%.

OPB is compensated on a fixed fee basis for managing the day-to-day pension administration services required to maintain the Plan’s operations. The SLA between PJPB, OPB and TBS, considers the possibility that OPB may be asked to perform additional services in addition to those specified in the agreement. Recent examples include the data validation project and the Annual Pension Statement. These additional expenses may appear as an additional expense allocated among the Funds however, there were no special projects requiring recovery in 2022.

Mandate achievements

The Minister’s mandate letter was received in June of 2021. The Board was asked to focus on the following four priorities:

1. Provide effective oversight of the operational, strategic, legal, and financial risks encountered by PJPB and the PJPP, including managing and mitigating the continuing impacts or associated risks of the COVID‑19 pandemic;

Comments

Regular reporting is vital to effective risk oversight. Over the review period, the Board continued to track risks through its established Enterprise Risk Management Framework. The Board has established a quarterly risk reporting schedule that is tailored to its needs and there is regular discussion with the Board member assigned to the risk management role.

Business continuity is part of the PJPB risk inventory, and since the Board relies heavily on 3rd parties for operational services, the simplest form of mitigation can be achieved by ensuring that its service providers have well-developed plans. The PJPB’s service providers have each confirmed they have processes to notify the Board and manage incident responses as required. In 2022, PJPB also began drafting its own Business Continuity Plan. Implementation is expected in 2023.

2. Provide effective governance and operations structure and processes that support and measure effective administration and performance of the redesigned Plan and its funds;

Comments

Protecting the security of PJPP benefits is a key responsibility of the PJPB, and one way the Board can assess the financial health of the pension promise is to periodically evaluate the funded status of the Plan. In 2022, the Board completed its first actuarial valuation of the Plan since funding redesign was implemented effective January 1. 2020. Regular valuations provide information about the plan’s sustainability and can serve as a decision-making tool allowing a Sponsor to anticipate and address emerging funding issues before they can threaten the Plan. The Board is committed to performing annual valuations to ensure effective administration of the Plan and its Funds.

In 2022, OPB piloted a modified performance report with the Board. The updated report now appears in a dashboard format and quickly conveys information about service delivery in the prior quarter. The information is regularly presented at the Board’s quarterly meetings and provides a high-level summary of administrative activities and performance over the review period. This initiative provides another tool for the Board to track and assess the effectiveness of the Plan’s administration.

3. Provide strong oversight of both the Investment Management Corporation of Ontario (IMCO), in its role in managing assets the PJPB is accountable for, and the Ontario Pension Board (OPB), in its role as management and regarding its service level responsibilities in respect of the PJPP;

Comments

PJPB’s relationship with IMCO is defined within the IMA that took effect March 17, 2020. At that time the Board adopted an interim schedule of permitted investments and restrictions to be in place until a strategic asset allocation could be established with the input of the fully represented Board. As a result, the assets were invested in Canadian Treasury Bills to maintain safety and liquidity and there was no change by the end of the fiscal year. Governance structures and processes needed to oversee IMCO’s role in managing the assets exist and are sufficient for the time being while discussions between the Sponsor and the AOJ concerning implementation issues continued in 2022. The Board will need to reassess its approach to investment governance once the new strategic asset allocation is adopted.

The Board also completed procurement for an independent investment advisor. Willis Towers Watson Canada Inc. was the successful proponent and will provide consulting services in relation to the development and implementation of the Board’s long-term investment strategy. In addition, the Board may turn to WTW to provide support on other investment related matters including governance and oversight of the Board’s investment manager, IMCO.

Board oversight was strengthened in 2022 when PJPB established its approach to internal audit and securing its objectives. At the Board’s request, OPB presented a schedule of planned internal audits, beginning in 2022, that Deloitte LLP would conduct. It was recognized that many of the internal audits focused on processes that either include PJPP membership or the general operating environment and might be relevant to the administration of the PJPP. This way PJPB could have cost-effective access to internal audit services with the option of engaging separate internal audit services if needed.

4. Provide superior client service that helps members understand their pension entitlements, rights, and responsibilities under the Plan.

Comments

In 2022, PJPB began formal discussions with OPB regarding its options for developing an IT/Communications Strategy. The strategy would involve modernizing the PJPP administration through technology, communication, and related governance enhancements to performance reporting and workflow tracking, which could be made available through work already being done by OPB.

The Board continues to finalize its strategic vision. At this time there is an expectation that a digital solution should deliver three outcomes:

1. support delivery of superior client service, effective communications, and strong stakeholder relations,
2. support effective and measurable administration and performance of the Plan and Funds, and
3. align PJPP governance and operations with government-wide priorities relating to technology and innovation.

At the Board’s request OPB is developing project scope, budget, and timelines for enhancements to technology and communications with decisions to follow in 2023.

The Annual Pension Statement (APS) is an important regular communication tool that provides pension plan members with personalized information about their plan and their current and future entitlements in a digital format. Once again PJPB oversaw delivery of the APS program for active members of the PJPP. In addition to the pension statement, members also receive an explanatory guide and the option to provide feedback through a survey.

In addition to the APS the Board regularly interacts with the membership through written, verbal, and other digital means. Using OPB’s Client Service infrastructure, PJPB can deliver Plan information to members and retirees through several convenient options, including direct contact with OPB Client Care Centre, electronic responses to questions about the plan and regular and ad hoc written communications explaining changes affecting their entitlements or insured benefits.

Board of directors

Financial statements

• January 1, 2022 to December 31, 2022