TORONTO The Canadian Union of Public Employees (CUPE) Ontario has filed a lawsuit against the Ontario Municipal Employees Retirement System (OMERS) and three individual managers, who it alleges were unjustly enriched at the expense of pension plan members.
The suit filed today seeks a declaration that OMERS and its board were in breach of their trust and fiduciary duties to pension plan members and acted negligently by allegedly entering into imprudent real estate transactions with Borealis Capital and Borealis Real Estate. The union is also asking for $60 million in damages from the three managers. The money is to be returned to the pension fund.
This is a serious matter for the almost 100,000 CUPE members who belong to the OMERS pension plan, said CUPE Ontario President Sid Ryan, one of the plaintiffs in the suit. We have to know how our members pension funds were able to be used this way and to make sure that it doesnt happen again.
Over an 18-month period, OMERS allegedly outsourced management of its real estate to Borealis Capital, which is alleged to have paid OMERS an undervalued $11 million and hired OMERS employees to do the work. Subsequently, OMERS repatriated the management function, paying Borealis shareholders including the three managers $50 million for return of its own assets, the statement of claim alleges.
The three individuals, who had been employed at OMERS or its subsidiaries and then became managers at Borealis, allegedly failed to disclose to the OMERS board that the costs of the agreement with Borealis were well above market rates. It is alleged that they had a duty neither to allow their personal interests to conflict with their duty to OMERS nor to use confidential information they gained as OMERS employees for their own benefit. The three were rehired by OMERS when it repatriated Borealis, the statement alleges.
The suit asks that Ryan and fellow plaintiff Wyman MacKinnon, president of CUPE 4705, be recognized as representatives of the more than 340,000 municipal, school board, police and fire employees who were members of OMERS at the time the alleged actions took place. CUPE represents about 44% of those members.
For more information, contact:
Sid Ryan, President, CUPE Ontario, 416-209-0066 (cell)
Antoni Shelton, Executive Assistant, CUPE Ontario, 416-299-9739 ext 303
Pat Daley, CUPE Communications, 416-616-6142 (cell)