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 2017 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, 2017 that meant overseeing the calculation and timely delivery of just under $41 million in annual pension payments to 283 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.

A restatement of the Plan to bring its provisions into compliance with the Income Tax Act was the source of litigation that began December, 2013. In response, a working group was established to discuss and resolve the issues in the litigation for eventual consideration by the 9^th Provincial Judges Remuneration Commission (the Remuneration Commission). While the Board is not a party to the working group process, there is a possibility the discussions could result in changes to the Plan and its Fund. Should those changes include a substantive recasting of the Plan’s funding model, the Board’s priorities would shift dramatically for the remaining period of the business plan. We are advised there are still a number of issues under discussion with Canada Revenue Agency and we are monitoring closely.

The Province of Ontario is managing its fiscal situation through a deficit elimination plan designed to reduce program spending growth and contain costs. At the same time, the Provincial Judges Pension Plan (PJPP) is facing the possibility of changes through the Remuneration Commission and the on-going implementation of new Plan provisions dealing with the division of pension assets on marriage breakdown. There is also the above mentioned litigation that continues to generate additional but necessary legal costs and a much more rigorous transparency and accountability regime with multiple reporting and compliance requirements. Each of these modifications affects key administrative processes and creates operating cost pressures for the Board, the Agent and the Sponsor. The fact that all Plan expenses are paid by the Sponsor, contributes to a challenging environment for the Board to manage its operational risk which is a key consideration in the Board’s business planning.

Under an annual process, Minister Sandals clarifies her expectations for the Board’s focus in the coming fiscal year. These objectives are not only vital to our mutual success, they are essential to maintaining the pension promise for all the Plan’s beneficiaries. The Minister’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

Minister’s Expectation - Delivering high quality, cost effective and timely pension services that are valued by the members and their beneficiaries

Minister’s Expectation - Review and make recommendations on the introduction of annual pension statements for active members

Implicit in the statement of both the high level strategy and the Minister’s expectations regarding client service is that the Board knows whether the service it is delivering is high quality cost effective and on time. Performance reporting is challenging in an operational environment that is not automated. Improving the Board’s ability to assess the delivery of service for quality and timeliness will require some form of pension automation. We have made progress improving our ability to track performance in the previous year and expect to continue that trend in 2018. The Board will also continue to assess current opportunities to adopt technology solutions being implemented by our service provider OPB. We expect to have sufficient cost information to decide how to proceed with pension automation and develop a business case in the 2018/2019 plan year.

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 its available resources the Board concluded the most cost effective option is a strategy of direct engagement of clients and stakeholders. We will encourage discussion in future meetings with each stakeholder and develop a specific plan for this initiative.

Annual pension statements provide plan members with both, a snapshot of their pension entitlement and an opportunity to ensure the information held by their pension plan administrator is accurate. An exemption under Ontario’s Pension Benefits Act means that members of the PJPP have never received a statement describing their entitlements. Our conversations with stakeholders suggest there is growing support for providing a statement but there are unresolved questions concerning the content, distribution and process ownership. The Minister has directed the Board to undertake a review and make recommendations concerning the establishment of annual pension statements for members of the PJPP. We recognize there are unique challenges with respect to the collection and exchange of data among the current stakeholders with responsibility for pension related data (e.g. OPB and OSS). However, the mandate is consistent with our request to expand our role to include active members and we are eager to begin our review and deliver the completed report and recommendations.

High level strategy: Foster effective stakeholder relations

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 familiar stakeholder (e.g. the AOJ). This is especially important for the Board given our limited mandate in respect of sitting judges and for this reason we are committed to improving relations through frequent interaction with such stakeholders.

Good relations have contributed to regular invitations for OPB to attend a biennial pre-retirement seminar for judges, organized by the AOJ, to present an overview of the Plan on behalf of the Board. 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. In addition,

The Ninth Provincial Judges Remuneration Commission will make recommendations relating to the four year period ending March 31, 2018. Plan design changes can form part of the recommendations and the Board must ensure that administrative issues are identified early so implementation is not delayed. The Board plans to adopt a highly collaborative approach to identifying and resolving such issues among several stakeholder groups.

High level strategy: Strengthen plan Governance

Minister’s Expectation - Strengthening plan governance through greater transparency, and continuing to seek improvements to accountability relative to the management of the Plans operations

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 the current structure could pose a risk to effective Plan governance and has continued to prioritize the discussion of the issue with senior levels of government. As a result, "management" was formally defined, but since the definition includes several parties (e.g. TBS, OPB and Ontario Shared Services) it remains complex in comparison to other pension plans.

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 and we continue to seek a government commitment to resourcing internal audits in the future.

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 the Plan’s registered status with Canada Revenue Agency ("CRA"). Maintaining the Plan’s registered status is a major Board priority and the Board strongly encouraged the Sponsor to make the necessary amendments. The Sponsor prepared amendments to bring the Plan into compliance with the ITA and CRA's regulatory requirements, which received Cabinet approval and became effective in 2013.

The Plan amendments are the subject of current litigation proceedings questioning their constitutional validity. The Board continues to monitor its compliance with the ITA relative to the "Standstill Agreement" and is seeking independent legal advice as needed to ensure on-going registration of the Plan.

In December 2014, a Working Group composed of individuals representing the Sponsor and the AOJ was formed. The Working Group is a forum for resolution of the issues identified within the court application and is engaged in discussions with CRA to develop an ITA compliant solution. The Board has agreed that it should act as a neutral party serving as a resource on an as-needed basis and that it should satisfy itself that the Working Group has taken appropriate precautions to ensure CRA will not act to deregister the Plan while these important discussions are in progress.

As the Working Group discussions progressed, the matter of Plan governance arose. The Board received a commitment that it will be given a chance to participate in discussions where its experience in administering the Plan can contribute to a more effective Plan governance model in the future.

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 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

Services offered by pension plan administrators are continually evolving in response to increasing 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 are attempting to better understand our client needs and what they value.

Since 1999, the Board has delivered pension administration services to the Plan’s beneficiaries through a service agreement with OPB. Historically, client interactions have been focused on payment of the pension or survivor allowances. As a result, 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 as we review the proposed automation solutions and develop our recommendations for the Sponsor. Courts are increasingly holding administrators and employers responsible for pension communications with employees and plan beneficiaries. Beneficiaries may lack information they need to make informed decisions about how they plan for retirement and receive their entitlements. In our view, sitting judges are particularly vulnerable since they receive little if any communication from the Board or Plan Sponsor during the period of their appointment. Ensuring timely access to consistent Plan information, however, is a service area that has proven to be challenging for the Board due to limitations on both electronic communication capability and access to member contact information. We intend to address this gap by continuing to engage our stakeholders and the Sponsor on the subject of expanding the Board’s responsibilities to include communication of pension entitlements with sitting Judges, working toward the production of an annual pension statement.

Naturally, the Board views itself as the authority on the Plan and in the best position to assist clients in making informed decisions about their pension entitlement. Currently, there is no dedicated communication channel for promoting that message to retired Plan beneficiaries. The Board plans to pursue approval of resources to implement a formal communication strategy. We will use stakeholder feedback to identify opportunities for more proactive communication that is current, informative and written in plain language.

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. This is consistent with the Minister’s view expressed in her mandate letter which stresses the importance of stakeholder collaboration in the development and implementation of plan design changes.

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 if 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, processes do not support timely retrieval of member and Plan information because the Plan relies heavily on manual processing. We have assessed the feasibility of automating pension processes and are preparing our recommendations for the Sponsor’s consideration. The Board will be seeking an allocation from the Sponsor to address the information and data challenges by funding a modest but effective pension automation solution that will leverage system modernization initiative that is currently underway at OPB. The Board will consult with affected stakeholders including Ontario Shared Services ("OSS") to ensure a smooth transition.
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 - Representatives appointed by the Sponsor and the AOJ are striving to resolve litigation relating to the Plan’s administration. Although the Board is not directly involved, we understand that the "Working Group" is consulting CRA on specific plan design changes. 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 restructuring the Plan’s design especially if 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, 2021, one project ((a) Implement a Feasible Automation Solution) is a multi-year commitment that will require a funding commitment by the Sponsor. The Board’s business case is expected to be completed once OPB's project requirements are complete; which we expect in 2019. Items (b) and (c) below are on-going and part of continuous improvement efforts. Finally, the remaining activity (d) is on hold due to litigation. It will be monitored to ensure completion once the legal issues are resolved and TBS policy direction is clarified.

1. Implement feasible automation solution - First stage - (Status: On hold expected completion: Q4/2019)

   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.

   Undertaking a technology and process modernization project 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 Board’s service provider, OPB has advised it is starting a multi-year project to modernize its systems and processes. As a result, we expect the costs for a comprehensive solution to be more modest than our earlier estimates which, presents a significant incentive to develop PJPP automation within OPB's pension modernization project.

   We recognize this is a significant project for OPB and the Board understands that its influence over implementation and scheduling will be limited. We are expecting more project specifics and reliable cost information from OPB before we determine how we want to proceed. Once the project is defined and cost information is available a business case can be finalized for the Sponsor’s consideration.

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

   In her mandate letter for the 2018-2019 fiscal year the Minister has asked the Board to review and make recommendations on the introduction of annual pension statements (APS) for active members. Because we rely on other stakeholders for the data needed to produce an APS, TBS has agreed to engage a 3^rd party service provider to complete a data process mapping project by September 2018. Once complete, the analysis will help us better understand how member data moves through the organizations with responsibility for judges' pay and benefit administration (e.g. Ontario Shared Services). The Board will also need to engage other stakeholders, including the Association of Ontario Judges, in direct consultation to ensure their views are reflected in our recommendations.

   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 will continue to receive quarterly updates on call trends from OPB.

   The Plan and the Fund are 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 completed its governance self-assessment at the close of 2017. 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. We expect 2018/19 will be an extremely challenging 12 months for resourcing and will target 2019/20 plan year for the project start.

   An important part of plan administration is records management. We are pleased to report that our review of the Board’s compliance with provincial standards is complete and a new Records Retention Schedule was filed with the Archivist of Ontario at the end of 2017. Our attention is now focused on the majority of the Board’s quarterly meeting minutes dating back to its inception in 1985, which are maintained solely in a paper format. In order to mitigate the accidental loss or destruction of these records the Board intends to convert meeting minutes from paper to electronic form within the next 24 months.

   Policies and procedures provide clear direction to the service provider and ensure consistent administration of pension entitlements. The Board will continue to document and approve its policies and ensure implementation of supporting procedures on an on-going basis.

4. Implement ITA compliant plan provisions - (Status: Deferred expected completion: On hold)

   Pension contributions/entitlements that exceed maximum amounts prescribed under the ITA cannot be remitted to/paid from the fund of a registered pension plan. Plans that provide pensions in excess of ITA limits typically establish a supplementary fund/account to hold assets and pay pensions that cannot be administered under the registered plan. The compliance amendments were filed and effective October 31, 2013. Court proceedings began in December 2013 to set aside the compliant provisions and revert to the former Plan provisions. An agreement is in place between the parties that effectively defers the implementation and prohibits changes to the former administrative arrangements. A Working Group composed of representatives of the Sponsor and the AOJ was established in the Fall of 2014. The complexity of tax issues affecting plan design and the impending Remuneration Commission review have contributed to protracted discussions. The Board will continue to work with the Working Group, TBS and OPB to ensure full regulatory compliance once the matter is decided.

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 Plan Sponsor has authorized a budget to permit the engagement of a 3^rd party service provider to complete a project to map data processes between OSS and OPB. As our service provider OPB is leading the procurement process and expects to have vendor selection complete in early 2018.

OPB provides services on a cost recovery basis and the next opportunity for cost adjustment will occur in 2018. The Board has a comprehensive service arrangement that addresses earlier gaps in secretarial support required by the Board; compliance with Agency reporting requirements; and other services required to administer new Plan features like the Family Law provisions introduced in 2016. A major adjustment to pension administration fees was completed in 2015 to address these areas and we do not expect further significant changes. OPB has advised that costs associated with administration services relating to family law are evolving and should the plan experience exceed the estimated resourcing an adjustment to fees may be required.

The Board is proceeding with its assessment of a pension automation proposal that would allow it to deliver on an opportunity identified in an earlier audit. By taking advantage of planned OPB systems modifications the Board believes it can improve efficiency and reduce risk with a modest expenditure. The Board will need to work closely with OPB and the Sponsor to develop its business case to support a capital investment.

The projects mentioned above 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. Addressing the lack of automation is expected to yield improvements in risk mitigation, quality, cost effectiveness and governance. A systems modernization initiative is currently underway at OPB and the Board must evaluate the cost of participation. 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 returning to a balanced budget is a key priority for the government.

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 will 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 extended to June 30, 2018. 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 Ninth Judicial Remuneration Commission will make recommendations relating to the period from April 1, 2014 to March 31, 2018. Proceedings for the Ninth Judicial Remuneration Commission Hearings are expected to commence early in the 2018/2019 fiscal year.

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. 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. In 2018 the Board will consider adopting more detailed performance measures for quarterly case processing reports including total processing times for specific transactions.

One of the challenges 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 better performance reporting as part of its business requirements for the process automation initiative.

Financial budget and staffing

Daily administration of the Plan and Board secretarial support is outsourced to OPB. Currently these services are supplied on a cost recovery basis and paid by TBS. Fees are evaluated on a three year cycle and the next fee review will be effective April, 2018. The work being performed by OPB in respect of the Plan had increased over the past triennial period in terms of both volume and scope. Services provided outside the scope of the SLA are charged back to TBS at cost. The Board does not generate revenues.

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

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 is expected to yield state of the art administrative tools for PJPP use, at a substantial cost savings for the Plan Sponsor. OPB has agreed to provide more information to help us assess the cost and extent of our participation.

Once a solution is selected we will proceed with the development of a business case. On approval of the business case and depending on which solution is chosen, the Board must ensure a competitive procurement process is undertaken to select a qualified vendor.

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 are exploring an opportunity to achieve greater automation by leveraging their pension administration system infrastructure (see Section IV for a more detailed discussion).

In lieu of an internal audit, the Plan Sponsor has agreed to fund a data process mapping initiative that will support our efforts to review and make recommendations for the introduction of annual pension statements for active members. At the end of 2017 OPB began a procurement process on behalf of the Board to engage a 3^rd party to complete an analysis and report. Depending on responses to the procurement we expect the report to be complete by the end of September 2018.

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 and is expected to continue into 2018.

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. Most recently the Sponsor engaged the Actuary to assess the Plan’s funded status as at March 31, 2017. The report was not final at the time this Business Plan was completed.

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.

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

• Deliver Pension Automation Solution
  • Obtain agreement on proposed project scope with affected stakeholders named in Appendix A.
  • Seek Sponsor approval of business case for Pension Automation solution by the end of 2019.
  • Procure a vendor in accordance with government procurement guidelines. This deliverable is highly dependent on OPB and Remuneration Commission outcome.
  • Complete the project plan and oversee delivery.
• 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 on service delivery and include as a standing agenda item at quarterly Board meetings.
• Work with the Sponsor and stakeholders to identify and resolve data requirements needed to support pension communication initiatives.
  • Develop data process map to support recommendation on introduction of APS
• Create a beneficiary communication plan when new policy/procedure introduced.
  • Engage Stakeholders in a dialogue on expanding the Board’s mandate to include responsibility for pension entitlement related communication with sitting judges.

Foster effective stakeholder relations

• Regular face to face stakeholder interaction 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.
• Create a stakeholder engagement strategy.

Strengthen plan governance

Increasing transparency

• Co-operate with Chief Justice’s Office to maintain 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

• Finalize the Board’s format requirements for performance indicator data reporting and deliver the report quarterly.
• 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 and employees 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 so 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 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 at least an annual 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.

In her mandate letter, the Minister has asked the Board to review and make recommendations concerning the introduction of annual pension statements for active members. 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 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 more frequently on these and other pension administration services to assess client satisfaction and suggested changes.

Finally, as part of our inquiry into the feasibility of automating pension payments; we will consider the potential of leveraging OPB's pension administration systems to enhance not only 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. After retiring as a senior executive with OMERS, Ms. Oakley established her own consulting firm and provides interim 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 Interim Vice-President Academic & Provost 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