The Top 24: Union Control

1
The Top 24 Union Control?

• UNION PENSION FUND TRUSTEES IN CANADA
• AND
• CONTROL OVER INVESTMENT

2
The Top 24 Pension Funds Social Investment?
Background to Study

• Joint project of the Ontario Public Service
  Employees Union (OPSEU) and the Canadian Labour
  Market and Productivity Centre (CLMPC)
• The first study of union activity in pension fund
  investment in Canada, covering the top 24 funds
• Assesses the extent to which unions and their
  members are involved in pension fund investment
  in Canada
• Provides a preliminary assessment of union
  involvement in social investment in Canada

3
Barriers to Union Involvement in Pension Fund
Investment

• Employer-controlled pension funds
• Fiduciary responsibility and the prudent man
  rule
• Rejection of social value by the financial
  industry

4
WHAT IS SOCIAL INVESTMENT?

• There are three types of social investment
• Ethical investment, or screening
• Shareholder activism, or corporate
  governance
• Economically targeted investment

5
THE TOP 24 PENSION FUNDS SOCIAL
INVESTMENT?Findings

• In two thirds of the funds, unions are seeking or
  have varying models of joint trusteeship.
• One of the reasons is to have more control over
  investment.
• Seven funds have little or no union involvement
  in fund investment. These are private sector
  unions.

• Five funds have social investment policies on
  ethical investment.
• Five funds have already blocked the financing of
  a private hospital and a highway.
• One fund is hiring a fund manager with experience
  in working with unions.

6
THE TOP 24 PENSION FUNDS WHO CONTROLS
INVESTMENT?Further findings

• Selection and monitoring of fund managers - OPT,
  CAAT, CBC
• Board selects and staff monitors - HOOPP
• Board monitors and staff selects - ALA and OMERS
• Staff monitors and selects - APSPP and the four
  B.C. funds

• Nova Scotia works with staff on selection and
  monitoring
• The employer handles all selection and monitoring
  - Hydro Quebec and Ontario
• The Caisse (bipartite) handles the investment
  process for remaining Quebec funds

7
THE TOP 24 UNION CONTROL?

• Funds with no union or
• employee representation
• BCE Inc.
• CN Rail
• GM of Canada
• Canadian Pacific
• Air Canada
• Diagram 8.9

Company Plan
Board of Directors/ Trustees
8
THE TOP 24 UNION CONTROL?

• Funds with little or no
• representation from the
• in-house union
• Ontario Hydro
• Ontario Pension Board
• Diagram 8.8

100 Employer representatives
Board of Trustees
9
THE TOP 24 UNION CONTROL?
50 employees 50 employers

• Funds with no joint
• trusteeship
• 50 employee and
• retiree representation
• OMERS
• Alberta Local Authorities
• Diagram 8.7

Government Ministry
Legislated Plan
Board of Trustees
Elected Chair
10
THE TOP 24 UNION CONTROL?
Unions 50
Employers 50

• Funds where Unions are
• recognized but only in an
• advisory capacity
• B.C. Municipal
• B.C. Public Service
• B.C. Teachers
• Nova Scotia Public
• Service
• Diagram 8.6

Advisory Committee
Legislated Plan
Government Trustee
11
THE TOP 24 UNION CONTROL?

• Jointly trusteed funds
• where Unions and the
• employer are equally
• represented except that
• the employer retains the
• chair
• CBC
• Diagram 8.5

Unions 50
Employer 50
Board of Trustees
Employer Chair
12
THE TOP 24 UNION CONTROL?
Unions 50
Employer 50

• Jointly trusteed funds where Unions and employers
  are equally represented, with a legislated chair
• Quebec Public Employees
• Hydro Quebec
• Quebec Teachers
• Diagram 8.4

Government Ministry
Board of Trustees
Legislated Chair
13
THE TOP 24 UNION CONTROL?



Union
Union
Union

• Jointly trusteed where
• the affiliated Union
• and the government
• are sponsors, with an
• independent chair
• Ontario Teachers
• Diagram 8.3

Union


Union
Union

Affiliated Union 50
Government 50
Board of Trustees
Independent Chair
14
THE TOP 24 UNION CONTROL?
Union 50
Employer 50

• Jointly trusteed fund
• Union and employer
• equally represented
• government trustee
• selection
• on union recommendation
• trustee selection of chair
• and vice chair
• Alberta Public Service Pension Plan
• Diagram 8.2

Government Ministry
Board of Trustees
Chair/Vice Chair (rotating)
15
THE TOP 24 UNION CONTROL?
Union 50
Employer 50

• Jointly trusteed fund
• Union and employer
• equally represented
• Union trustee selection
• trustee selection of chair
• and vice chair (rotating)
• OPSEU Pension Trust
• HOOPP
• CAAT Plan
• Diagram 8.1

Board of Trustees
Chair/Vice Chair (rotating)
16
THE TOP 24 PENSION FUNDS SOCIAL
INVESTMENT?Some Questions

• Is there a difference between investment
  strategies of the financial industry/government
  staff/pension fund staff and those of union
  trustees?
• What would a union agenda on investment look
  like?
• What kind of training could the trade union
  movement provide to support union trustees in
  pension fund investment?