In this episode of OPSEU/SEFPO Talk, President Warren (Smokey) Thomas speaks with OPTrust President and CEO Peter Lindley about the success of OPTrust and the importance of defined benefit pension plans.

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00:07 Hi everyone and welcome to OPSEU/SEFPO Talk.

I’m Smokey Thomas, President of OPSEU/SEFPO and joining me today is Peter Lindley, Peter is the President and CEO of OPTrust, OPSEU Pension Trust – the defined benefit pension plan for OPSEU/SEFPO members working in Ontario’s Public Sector and recently in the Broader Public Sector.

This past January 1st marked 26 years since OP Trust was established back in 1995. For those who don’t know, it took a hard-fought battle by our union and its dedicated OPS members to create the Plan.

And as a Joint Trustee, our members and pensioners continue to have a strong voice in managing this plan. That’s part of the reason the Plan has been, and continues to be, so successful.

Today, OP Trust is one of Canada’s largest pension funds with nearly 100-thousand members. And it’s going strong, despite the challenges of the past year.

With the recent release of OPTrust’s Funded Status Report, we thought it’d be a good time to sit down for a chat. So, thank you Peter for your ongoing leadership at OPTrust and for joining me here today.

You’re a veteran of the financial services industry. What drew you into working for a pension plan and can you explain that to folks and tell us about yourself.

1:39 – Peter Lindley: Thank you so much Smokey and it’s a great pleasure to be here. I appreciate the invitation. You mentioned that OP Trust stands for OPSEU Pension Trust and we manage the money for the 98, nearly 100-thousand members who are members. I just want to mention up front the mission that we have. Our mission is to pay pensions today and preserve pensions for tomorrow, something I take very seriously.

You asked me why I wanted to join a pension plan. I’ve been involved with pension plans for the last 20 plus years through my investment career. But I’ve been in the investment world for over 36 years now. Really what I think attracted me to the pension industry was something from a very young age, both my parents were school teachers and they both had the benefit of a Defined Benefit pension plan. My Dad unfortunately had serious health issues and he ended up being on disability for a while and unfortunately he passed away, relatively young, when I was still relatively young. But because he had a death benefit as part of that, my Mom could live on that and her pension, she was a part time teacher. So a combination of that really enabled us to continue to live, go to school, go to university and so, it really taught me at a very early age the benefit of that because without that, my Mom would have really struggled and she continued to live on her pension right up until last year when she passed away at age 88. So it’s something that’s really important to me and so I had the opportunity to take what I had learned through my education, and I was able to turn that to the benefit of pensioners and I’ve really have had a great experience in Canada for over 28 years and 20 of those have been working in the pension space. But I’ve really wanted to come to OPSEU Pension Trust because I know I’d be able to really help people have a great retirement and I think that’s what really important to me: people who have worked hard for the community, for our society, help them have a retirement that really matters so they can enjoy the latter stages of their lives.

3:50 – Smokey Thomas: It’s that as you say, pension promise for everyone paying in. I’m a huge fan of Defined Benefit pension plans and I don’t think it can be overstated how good they are. What do you think is the biggest advantage Defined Benefit plans provide for their members and why should young people and fix term workers care about this?

4:19 – Peter Lindley: Smokey, it’s very hard to say just one, there are so many benefits to it. Maybe I’ll just think of the top three I can think of off the top of my head. I think the first is you have a predictable lifetime benefit, like I just said about my Mom’s experience and my Dad’s experience, they lived different lives. That’s the really important one because when you retire you don’t have to worry: ‘are my savings going to run out?’ I think that’s a really important thing, especially these because it seems the price of everything seems to be going up all the time, whether it’s houses or cars so having a predicable benefit is very important, probably for me that’s the most important one. I think for a pension trust like us, it’s really important to know that because we pool the assets we’re able to access specific investment strategies and asset classes that individuals never could. So if you’re into your RSP, you’re not going to have access to private equity or real estate or infrastructure type investments so that’s another really important benefit where we gain from the pooling of these assets. And then on top of that you get these experts again, who you wouldn’t have access to as an individual, who are going to be working on behalf of the pension. I think the pooling of the assets and the lifetime benefit are the two really critical things that make the biggest difference. For young people, I’d say it’s really important and I tell my kids this: ‘You gotta start saving young’ because if you save a dollar today you can invest in and earn interest on your interest so that compound interest effect is really on your side if you start, but it’s also a good habit to get into so I think those are really important things for young people to get into.

6:06 – Smokey Thomas: When I was young, which was quite some time ago, I can remember I was in a bowling league and one of the women in the bowling league was in the investment field, she said; ‘you know you should put a little away every pay day’, (I said) aaah, I don’t have to worry about it. But after a while I did and I’m glad I did because of the OPSEU pension plan I’m going to have a good pension, but you’re right about for young people; start saving early, make it a habit. Wherever you’re working make sure you get in a pension plan if you can.”

6:40 – Peter Lindley: Exactly, we always think,’ oh I’ll do it later when I’ve got more money’ but we never have more money, but we never have more money, no matter how long we live we always have something we’re going to spend it on so if we don’t force ourselves to save we never will.

6:51 – Smokey Thomas: My partner, she’s instilled this in all three of our boys and they actually actively save some every pay day, comes right out of their bank account, goes into their savings account so that’s a good habit to get into.

7:01 – Peter Lindley: It’s a very important thing to do.

7:07 – Smokey Thomas: We’ve been ravaged and savaged by COVID-19 and it really has caused some market instability, particularly back in (last) March and April, but for anyone listening, despite all that, the OPSEU Pension Trust has done well, in fact we are now ranked one of the top three pension plans in the world for member services. What would be the recipe for that success?

7:27 – Peter Lindley: That’s true and I think we’ve done very well for a long period of time and I think that’s really a function of truly dedicated people at OP Trust, I mean they really care about that. I mean a number of them are also OPSEU employees so they really bring their passion to it, but even those who are not are very dedicated to our members and that is our single purpose. That is all we do so we have no distractions, we’re a not for profit organization, we’re not trying to earn profits for shareholders, we’re dedicated to our members and that is something that comes back to the focus that I bring to it, the organization, all of the executive team, everybody. I’ll tell you a quick story, when I first joined OP Trust I did a town hall just to meet everybody. And at the end of it, people came up to me from all over the organization, different areas, younger, older, people who had been there 27 years, 25 years or two months, they all came up to me and said: ‘I love working here because we really help people, I love being on the phone and I can really make a difference.’ It was just an incredibly moving experience. It was this incredible passion to serve our members and having a purpose I think really helps because that’s a big piece of it.

8:42 – Smokey Thomas: Sometimes the emails I get are usually only a complaint about service, but I cannot remember getting a complaint about service from the OP-T, not ever. I do know that customer satisfaction is very very high and full disclosure; a lot of workers at the OP-T are OPSEU members.
You mentioned the OP-T’s funded status report that was released earlier this month. Can you explain a little bit what that means?

9:19 – Peter Lindley: We create this every year. Some companies create annual reports, we like to call it our funded status report because it shows we’re not a company, and we’re a trust fund. The first thing I’m really, really proud about is that we’re fully funded and that’s the 12th year in a row. Those who don’t know about pensions, that is not common and it’s really hard to do and so that’s something I’m very proud of for OP Trust. I think we do that and I think the secret of our success is the focus we have on our members, but also our investment team is incredibly focused and we have an investment strategy that is specifically designed for a pension fund and it’s very well done, well executed, we invest in a variety of different strategies, but we do it very thoughtfully in that we take just the right amount of risk. We don’t take too much risk we don’t take too little risk. We’re really focused on keeping fully funded. Fully funded means you’ve got enough assets to pay the pension benefits for all of the members into the future. We do all these calculations and projections but that is what it means, but fully funded is hard to do and I’m very, very proud of that. The other thing I want to mention for this year Smokey, is the title of our funded status report, we put titles on it, was “Taking Care.” It was something we felt it was really important to acknowledge that we feel that our job is to take care of people’s pensions, but we also wanted to acknowledge that many of the members whose pensions we manage work to take care of Ontarians and so if I think about what that means whether they’re in various parts of the public sector whose pensions we manage across the province, across the organization, we just wanted to make sure there was a connection between what we do for our members and what they do for Ontario and its society and it’s a very important part of our purpose.

11:17 – Smokey Thomas: The breadth of the work that members in the OPSEU Pension Trust do, I always explain it this way: They register your birth and register your death and look after society all the way through your life so you’re absolutely right about that. How about a little bit about what the structure is?

11:36 – Peter Lindley: We are a pension trust and we’re solely dedicated to manage the pensions so we have no confusion about that we have no distractions, I think that’s really important. We sort of have these two primary functions, one of which is the investment team, where we take the money and we invest it we pool it and invest it and the other is servicing the members. It’s really important that we keep our focus really on those two areas and then we have the rest of the organization, of course the accounting, the people team — human resources, the communications, we do other pieces to support that but those are the primary parts of it so that’s what really matters and helps us to keep the focus on that funded status, which is the thing that matters the most.

12:21 – Smokey Thomas: Recently, it took a while to get there, but we’ve launched OP Trust Select, so can you explain for people outside the OPS, can you explain how it works?

12:34 – Peter Lindley: Probably some of your members may not be as familiar with it. OP Trust Select is if I’m not mistaken the first new Defined Benefit pension plan in Ontario a generation. We’ve only seen pension funds closing unfortunately across Canada in the last several decades so having a new one is something that is truly remarkable. It’s also truly remarkable, I think, that you were able to bring it to life. The work of OPSEU is absolutely critical in that and it’s making a huge difference for a large sector of Ontarians who really have never had retirement security. And so retirement security for people in the not for profit networks, the Ontario not for profit network and the broader public sector. Bringing pensions and retirement security to that segment of society is really important, they’re typically on the lower end of the salary range and they’re typically mostly women so what we’ve found we’ve got over 80 per cent of the members now in the OP Trust Select schedule are women and I think that’s a phenomenal thing to try to close the gender gap in pensions where there is a clear negative impact for women as they retire so that’s something that I’m very proud of. In fact it’s only been launched since 18 months ago and in that time we brought on 43 employers and over 15-hundred new members into the plan, it’s really important. And the longer it goes on the more new members we’re going to bring in, the better it is for the broader OP Trust, but it’s a very important part for society here in Ontario.

14:19 – Smokey Thomas: You’re right about the BPS, it is 80 per cent women and some employees didn’t even have RRSP contributions, some did. Nothing against RRSPs but putting your money into a pension plan is far more advantageous than RRSP’s I think.

14:40 – Peter Lindley: Well it is because you get the benefit of the employer matching your contribution, so again one of the huge benefits of the DB pension model is that you contribute as an individual, but the employer matches and then you get these professionals to invest it. It makes a massive difference and ultimately for every dollar that we pay out in pension benefits, 73 cents is created from the investment part of that, which is really the critical secret source in proving able to buy back those benefits for all of our members as we’re all living longer these days.

15:14 – Smokey Thomas: Yes I hold the OP Trust up as an example to people who really attack Defined Benefit pension plans, mostly from the right-wing and I say: ‘well you know, here is how it could work’ and have actually shown some of these critics how it works and the advantages of it and I say you know, join a union, join a pension plan. You’ll never convince some people about it because it’s ideological, but I guess we’re on the other side of that. On the trustees, OPSEU, we actually have trustees that are actually appointed by the union and we put a lot of training into our trustees and on the employer side, I think the relationship, now is perhaps the best, it’s always been a good relationship but now I think Peter under your leadership and the team you have, I think the relationship is a lot stronger. All the trustees on there, their primary focus is the pension plan and they basically take an oath on our part to uphold the pension promise. There are people who criticize having workers on board, but I think at OP Trust, I think it’s been quite a positive experience.

16:48 – Peter Lindley: Very much so, coming into the role, as Chief Executive my relationship is primarily reporting to the board and it’s been a very positive experience. We’ve had some really phenomenal trustees working incredibly collaboratively just for the benefit of the members and there doesn’t appear to be sides. When you go into that board room everybody is talking from the same perspective and you don’t feel like there is an employer on one side and a union on the other at all, it’s a very collaborative, a very positive experience and I really enjoy it. I’ve worked in this industry a long time and I’ve seen board and worked with boards over the years. One of the things that really strikes me about our board is how diverse it is. You often find with pension boards there is not that much diversity in any dimension whether it’s gender or race or anything. The background and the way people experience life is really different at OP Trust so having trustees who have worked in the public sector, who’ve worked, whether it’s on a Service Ontario desk or in an environment role or in Corrections, really brings a very different perspective to the whole experience and I think that’s a really important benefit that we have at OP Trust as well.

18:10 – Smokey Thomas: I think on the government side what I’ve seen in the last few years, they’ve embraced diversity as well. I’ve sat in on sponsors meetings, so the shareholders, one share for OPSEU, I represent that, on the government side, and it’s the finance minister, kind of a mix between finance and Treasury Board. Anything else you wanted to add Peter?

18:46 – Peter Lindley: It I could continue your thought on diversity: This year we have both the chair and the vice-chair of OPT rust are women, which I think is fantastic. We have very good representation of women on the board as well and I think that’s fantastic. I always want to mention briefly Mike Grimaldi who is the retiring chair, who has done a phenomenal job over such a long time for OP Trust and OP Trust Select and all of those things, Mike has been really heavily involved. He’s been a really great mentor to me and he’s explained a lot of the history and what’s happened, so I just want to give a big shout out to Mike who has done a phenomenal job for OPSEU in this regard.

19:39 – Smokey Thomas: I share your view of Mike. Mike was at one time an Executive Assistant to Leah Casselman when she was President, he went back to the membership got on the Executive Board. He retired, I’ve dragged him out of retirement I think two or three times to come back and work on pension stuff. Mike has been at the table with our staff back in the last government when they were talking about the roles of pensions and we stayed at those pension tables and I think we were the only union that did. What I said to the government of the day, ‘if you can make Mike Grimaldi happy, I’ll be happy’ and they said ‘I don’t believe it’ I said ‘ no, believe it because Mike is a problem solver and I have a great deal of respect.’ We will miss him but I do understand, he said to me; ‘Smokey, I’m done at the end of March, honest I want to retire, I love you but don’t call me anymore,’ but he trained a lot of people along the way and our new chair, I think you’re right she’s pretty fantastic. If anybody listening is interested in pensions and interested in becoming a pension trustee, send me an email at and I’ll steer you in the way to take some pension courses because we do put a lot of effort and resources effort into training people for pensions and I think that’s why it’s so successful.
I want to thank you for coming in. I think it’s really important for our members who are going to benefit from this pension plan to hear firsthand and to support Defined Benefit pension plans. The benefits you get will last you a whole life on the benefit side, which is different than some plans.

21:29 – Peter Lindley: Very much so, I’ve been involved in the pension industry for decades and I’ve seen all of the different ways you do it, whether it’s Defined Contribution or RRSP’s. It’s the only approach that will last you a lifetime, that’s such a relief when you retire, knowing that is such a relief and gives so much security and so much comfort in your retirement I think.

21:54 – Smokey Thomas: And full disclosure, I’m looking forward to drawing my OP Trust pension in a little over a year and I can actually go into retirement knowing I’m going to have a good standard of living, worked hard all my life and anybody who makes it to pension age has worked all their life so the last word is yours I just want to say thank you for coming.

22:29 – Peter Lindley: Thanks so much for having me and I really just want to thank the whole team at OP Trust who have done an amazing job throughout the last year, especially during the COVID crisis and being able to be flexible and still serve our members I think that’s been amazing as well so thanks to the OP Trust team.

22:36 – Smokey Thomas: There you have it, Pensions 101, from what I would argue is the best pension plan in the country. Thanks for listening everybody.