Toronto The Canadian Union of Public Employees (CUPE) Ontario has instructed its lawyers to begin preparing a legal claim against the board and certain employees of the Ontario Municipal Employees Retirement System (OMERS), President Sid Ryan announced today.
The action was triggered by OMERS dealings with Borealis that saw more than $100 million paid out in annual and termination fees over a 19-month period, including payments to three senior managers totaling about $10.5 million, for outsourcing and then repatriating management of OMERS real estate assets.
CUPE Ontario will seek the repayment of any improper gains made by OMERS fiduciaries and the restoration of OMERS losses to the greatest extent possible.
We are sending a message today to OMERS and to every other pension plan in Ontario that you cannot use the deferred wages of workers who earn modest incomes to make yourselves into millionaires, said Ryan, whose union represents most of the members of the pension plan.
And, were sending a message to the province that any process they initiate to move us towards joint trusteeship of OMERS must not be controlled by OMERS management. Its a process that belongs to the representatives of employees and employers in the plan, the ones who have a real stake in good governance.
The Borealis transactions of principal concern to CUPE Ontario are a number of decisions culminating in the sale by the OMERS board of the asset management business of OMERS Realty Corporation to Borealis for $11 million in June 2002.
In conjunction with the sale, OMERS contracted with Borealis for the management of $7.5 billion worth of OMERS real estate investments. Borealis fees charged to OMERS for the last six months of 2002 alone were $16 million. Those fees increased to $46 million for 2003. Within 19 months of selling its real estate related asset management business to Borealis, OMERS terminated its contract with Borealis, at an additional substantial cost reported to be some $49.9 million.
The Financial Services Commission of Ontario is currently conducting an investigation into transactions involving OMERS and Borealis.
For more information, please contact:
Sid Ryan, President, CUPE Ontario, 416-209-0066 (cell)
Pat Daley, CUPE Communications, 416-299-9739 ext 264; 416-616-6142 (cell)