The new CEO of the Ontario Municipal Employees Retirement System says one of his top priorities will be making the $60-billion pension fund financially secure.
Michael Latimer says he does not plan a new strategic direction for OMERS when he takes over as chief executive from Michael Nobrega, who is retiring on March 31 after serving in the top job since 2007, but said funding security will remain a key priority. OMERS is one of Canada's largest pension managers, overseeing investing for municipal employees in Ontario.
"We're striving to make OMERS one of the most secure pension plans in the world and provide the best services for our members. … Those are things that I would like not to change, but to continue to enhance and pursue," Mr. Latimer said in an interview Wednesday.
OMERS announced Wednesday that Mr. Latimer, 62, will succeed Mr. Nobrega. He is currently OMERS' chief investment officer, and will keep the CIO title after he becomes CEO.
Financial security is a key issue for OMERS, which has faced a significant funding shortfall since the financial crisis in 2008, when it reported a 15-per-cent loss on its investment portfolio, costing $8-billion. The fund said it had a $10-billion solvency deficit at the end of 2012.
In 2010, OMERS implemented a plan to eliminate the deficit that includes a contribution increase for plan members phased in over three years.
Mr. Nobrega said Wednesday that he is confident the plan will move back to fully funded status due to strong investment returns and higher contributions.
He said he began planning his retirement more than two years ago, but did not want to leave until he had seen OMERS complete a revamp of its governance model and put a new independent board chair in place. Retired insurance industry executive George Cooke was appointed in October this year, becoming the first independent board chair who is not affiliated with any of OMERS' employer sponsors.
"That was the trigger event that made everything happen," Mr. Nobrega said. "I said I would stay until such time as we had that final peg in place."
Mr. Nobrega said he is especially proud of the innovation that has occurred at OMERS in recent years. The fund has launched a program to offer fee-based investment services to smaller pension plans that contract out their management to OMERS, and introduced a program giving members the option to make additional voluntary pension contributions and have the money managed by OMERS.
Mr. Nobrega says innovations at OMERS have contributed to the high regard that pension experts and money managers in other countries have for Canada's public sector pension funds. "We've added to the mystique of the Canadian pension funds outside of Canada," he said.
Mr. Latimer first joined OMERS in 1997 and previously served as chief operating officer of Borealis Capital Corp., which was a controversial offshoot of OMERS during a period when the fund decided to spin off its private equity management into a separate company.
When Borealis was brought back in house in 2004 following critiques of the high costs of outside management, Mr. Latimer became CEO of Oxford Properties Group, which is the real estate arm of OMERS. He became chief investment officer of OMERS in January, 2010.
Mr. Latimer said he long aspired to the top job and is "honoured" by the appointment.
"I have to be honest – it's something I've always had an interest to take on," he said. "There are so many really great things going on that it would be hard to say that you wouldn't want to aspire to have the opportunity to take on this role at OMERS."