A History of Security and Trust
The Colleges of Applied Arts and Technology (CAAT) Pension Plan was established on June 1, 1967. The Plan was originally created for non-academic personnel at the Colleges. When the Plan was established, academic staff contributed to the Teachers' Superannuation Fund. They were given the option to transfer to the CAAT Pension Plan. New academic staff continued to have the choice of plans until 1972. After January 1, 1972, all new academic staff members were offered enrolment only in the CAAT Pension Plan.
Governance
Members of the Board of Trustees and Sponsors' Committee
Partnership with OMERS
In 1967, the Boards of Governors of the 18 Colleges of Applied Arts and Technology that were in operation at that time entered into an agreement with the Ontario Municipal Employees' Retirement System (OMERS) Board, authorizing it to act as Trustee to the Plan. OMERS administered the Plan on behalf of the Ontario Council of Regents for Colleges of Applied Arts and Technology. OMERS, which enrolled its first members in 1963, was an umbrella body set up to consolidate separate municipal pension plans operating across the province. For 28 years, both plans' funds were managed as one pool, although each plan had different benefit provisions.
In the 1980s, the CAAT Plan was represented by an advisory committee that provided comments on the investment and administration of the Plan. By the 1990s, CAAT Plan representatives were looking for more control over decisions about the direction of the Plan and its investments. The CAAT Plan membership featured a different population, age and service mix than did OMERS, and represented a small minority compared to the bigger plan. In addition, CAAT Plan amendments had to be approved by the provincial government through an Order-in-Council, often a time-consuming process.
The CAAT Pension Plan goes it alone
After a number of years of planning and negotiation, it was concluded that an independent, jointly trusteed pension board could best manage Plan affairs. On December 20, 1994 a new governance arrangement was formally implemented, when the College Boards of Governors, the Ontario Public Service Employees Union (OPSEU) and the 12 members of the first CAAT Plan Board of Trustees signed the Sponsorship and Trust Agreement, effective January 1, 1995.
OMERS provided administrative support in the first year of the Plan's independence. The CAAT Board of Trustees took responsibility for administration of contributions made after January 1, 1995. OMERS continued to administer the part of its fund that belonged to the CAAT Plan during 1995, until, after 11 months of negotiations, agreement was reached on the amount to be transferred.
On January 2, 1996, the transfer of $2.5 billion took place. It was one of the largest inter-plan transfers in Canadian pension history.
An independent plan
By 1996, the Plan had 15,000 Members and 6,000 retirees, and a Fund of about $3 billion. The new operating environment meant that the Plan could have a more direct say in policy and investment decisions. It could make policy changes quickly, needing the approval of Plan sponsors instead of waiting for the provincial government to approve them. And it could work with a Fund large enough to stand comfortably on its own. The Board of Trustees concluded that the investments should be made in equities, bonds and cash items, and should stay away for the time being from assets such as real estate, mortgages and private equity investments.
The new governance structure - which continues today - includes the Sponsors' Committee and the Board of Trustees, as well as a Plan Manager/Chief Executive Officer and an administrative staff. The Plan has three sponsors: Colleges Ontario, acting on behalf of the Boards of Governors of the Colleges, the Ontario College Administrative Staff Association (OCASA) and the Ontario Public Service Employees Union (OPSEU).
The Sponsors' Committee is made up of four Employer and four Employee members, who appoint Trustees and approve Plan amendments. The Board of Trustees is composed of six Employer and six Employee members. The Board of Trustees is the "Plan Administrator" under law, which means the Board has oversight responsibility for the running of the Plan. Day-to-day management is delegated to the Plan Manager/CEO.
Plan History at a Glance
A number of improvements have been made to the plan over the years. Here are a few highlights:
November 1, 1974
Unreduced early retirement for members who could meet the 90 rule (precursor to the 85 Factor) came into existence; common law relationships were recognized for spousal pensions
April 1, 1978
Buybacks of optional and prior service became available
August 1, 1984
Calculation of average earnings moved to a base average of highest 60 months (it had been highest 7 years originally, and then 84 months)
January 1, 1988
Vesting moved to 2 years of service or Plan membership (it had been 10 years originally, and then 5 years).
Membership was extended to Other than Regular Full-Time Employees
July 1, 1991
Unreduced early retirement was extended to people who could meet the 60/20 rule
July 1, 1992
Contribution rate percentages increased by 1.6% to 7.6%, 5.8%, and 7.6%
January 1, 1998
- Introduction of reduced early retirement for Members between age 50-55 with 20 years of service; the 90 Rule was changed to the 85 Rule;
- introduction of optional 75% spousal pension;
- introduction of a guaranteed minimum of 60 months of payments;
- introduction of the crediting of one month of service if a Member contributes for one day during that month.
November 1, 1998
The Commuted Value transfer option is not available for members who are 55 or older.
Where a Commuted Value exceeds the CRA maximum amount that can be transferred to a locked-in RRSP, the excess can be paid as a pension.
December 8, 1998
Same sex partners are included in the definition of "Spouse"
January 1, 2001
Indexation for pre-1992 Pensionable Service is guaranteed to 2014 (the date had been extended in three year increments several times, but this was the most substantial expansion in the Plan's history).
June 19, 2002
Plan text amended to include changes in terminology and administrative practices surrounding Service, Enrolment, Eligibility and Buybacks
January 1, 2004
Contribution rate percentages increased by 1.5% to the current ones of 9.1%, 7.3%, and 9.1%
January 17, 2005
The Plan's office relocates from Mississauga to Toronto, Ontario.
July 1, 2007
The Plan celebrates 40 years as the "foundation of your future".
January 1, 2008
Contribution rate percentages increased by 1% to the current ones of 10.1%, 8.3%, and 10.1%
Today
The Plan serves over 17,500 Members and 11,000 Pensioners.
January 2008
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