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When CUPE Ontario launched a lawsuit against the Ontario Municipal Employees Retirement System (OMERS) two years ago, OMERS vilified CUPE Ontario maintaining the CUPE claims were simply not reflective of the truth.
However, in his decision released yesterday (Wednesday, August 16), Justice Ground of the Ontario Superior Court of Justice agrees with CUPE Ontario. Members have a right to know how their pension monies are invested, and further, he agreed that OMERS members have a right to know if pension fund managers are unjustly enriching themselves through charging exorbitant fees.
CUPE Ontario has lifted the veil of secrecy on OMERS investments and may well set a precedent for all pension plan members in the province, said Sid Ryan, president of CUPE Ontario. With Justice Grounds decision, it is clearly obvious that our decision to launch our lawsuit was the correct one.
OMERS also claimed that the lawsuit was a waste of pension resources because of the large legal fees OMERS would have to pay to defend a suit that they claimed had no merit. However, with yesterdays decision, Justice Ground found that the case is strong enough to proceed to trial. CUPE Ontario is considering appealing some aspects of Justice Grounds decision and requires clarification of others. Some of the allegations against individual defendants and Borealis were dismissed.
The action was triggered by OMERS dealings with Borealis that allegedly saw more than
$100 million paid out in annual and termination fees over a 19-month period, including alleged payments to three senior managers totaling about $10.5 million, for outsourcing and then repatriating management of OMERS real estate assets.
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.
The Financial Services Commission of Ontario (FSCO) has also taken the Borealis affair seriously. FSCO began its investigation in 2004 and established a temporary office in the OMERS building to gain direct access to the mountains of paperwork they must examine to complete their investigation of the Borealis affair. The FSCO report is due in December.
CUPE Ontario is seeking repayment of any improper gains made by OMERS fiduciaries and the restoration of OMERS losses to the greatest extent possible. The case has still to go to court and all allegations must be proven at trial.
Sid Ryan, President, CUPE Ontario, 416-209-0066 (cell)
Wendy Forbes, CUPE Communications, 416-299-9739 ext 264