Debt Issuance | Non-Deal Roadshow - omers
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Debt Issuance | Non-Deal Roadshow
Ontario Municipal Employees Retirement System Our Funding Team
Jonathan Simmons
Chief Financial Officer
Upton Jeans
Senior Vice President,
Financial Services
Brandon Weening
Vice President, Corporate
Finance & Treasury |
Vice President of OMERS
Finance Corporation*
*Trustee of OMERS Finance Trust
$97 8.1% 96% Unless otherwise noted, all figures are as at December 31, 2018, and in
Billion in Net Assets 5-Year Net Funded Canadian dollars. This document may change without notice. For the
Rate of Return current version, please visit www.omers.com/oft.
Non-Deal Roadshow | 2019 2
One of Canada’s Largest Defined Benefit Pension Plans
OMERS Established by
Captive legislation, and
Long-term membership independent
global investor and diverse from the Province
employers of Ontario
pp. 5-6 p. 7
pp. 5-13
FUNDING
Debt liabilities
SSA issuer with a US$5.0B Low leverage
have a priority
fixed-term funding program and Aa1/AA+/AAA
over pension
across multiple currencies credit ratings
liabilities
p. 15 p. 16
pp. 15-17
Non-Deal Roadshow | 2019 3
The OMERS Plan Non-Deal Roadshow | 2019 4
Captive and Diverse Membership
45,000
Established in 1962 as the exclusive deferred
pension provider to union and School boards Municipalities
non-union employees of 29% 47% 162,000 289,000
municipalities, school boards, transit retired active
systems, electrical utilities, emergency Other
services and children’s aid societies local boards
24%
across Ontario.
~1,000 employers 496,000 members
10.7% of earnings $31,300 per year
Member contribution rates Average annual pension for members retiring in 2018
16 yrs. 46 yrs. 71 yrs. 106 yrs.
Youngest Average age of Average age of Oldest
member active members retired members retired member
Non-Deal Roadshow | 2019 5
Stable, Predictable Cash Flows
Members
$4.2B contributions Investments Returns $4.3B benefits
Employers
$97B net assets globally
Non-Deal Roadshow | 2019 6
Mature Regulatory Framework Independent Governance
The OMERS Primary Plan is a registered pension plan and
a jointly sponsored pension plan. It is subject to three key
pieces of legislation: OMERS OMERS
Administration Sponsors
Corporation Corporation
OMERS Act, 2006 Pension Benefits Act Income Tax Act (OAC)* (SC)*
(and predecessor (PBA) Federal:
legislation) Provincial: broadly
Provincial: OMERS only all pension plans applicable
Administrator Sponsor
• Establishes OMERS • Minimum-pension- • Requires compliance
as the pension plan benefit standards with PBA RESPONSIBILITY RESPONSIBILITY
for employees of legislation • Investment • Benefit levels
municipalities and intended to protect • Specifies management • Contribution rates
local boards in members, including that pension • Plan administration • Board composition
Ontario certain funding contributions are and payments (OAC & SC)
requirements paid before tax • Actuarial valuations
• Created the two
OMERS corporations • Permits reductions • Benefit payments BOARD BOARD
(OAC and OMERS SC; in benefits and are taxable when
see chart at right) increases in paid • 14-person fiduciary • 14-person board,
contributions to board plus an appointed by
current members for independent Chair employer groups,
future service • Nominated by SC unions and
• Complete set of associations, led
• Ensures pensions competencies, by two Co-Chairs
have a plan to collectively
achieve full funding
*non-share capital corporation
Non-Deal Roadshow | 2019 7
Strategy and Investments Non-Deal Roadshow | 2019 8
United by Purpose
Our mission is to provide secure, sustainable defined benefit pensions for our members.
This purpose unites all employees across OMERS.
2020 Strategy Looking Ahead
We are updating our long-term
Strategy, which will focus on:
]] continuing to build a high-
quality, well-diversified
investment portfolio;
Funded
status
7-11%
net returns
Building
relationships
Business
model
]] ensuring the Plan is sustainable,
affordable and meaningful;
]] continuing to lower the
discount rate; and
]] managing assets and liabilities
to reflect Plan maturity.
Non-Deal Roadshow | 2019 9
Long-Term Growth in Net Assets
Net Return History
20-year 10-year 5-year 3-year 1-year
6.6% 8.0% 8.1% 8.0% 2.3%
Net Assets ($ Billions) Asset Mix
Infrastructure
18%
100 95 97 Private Equity
85 15% Real Estate
80 77
72 18%
60
40
Fixed Income
20 Public Equity 29%
33%
0 Cash & Economic
2014 2015 2016 2017 2018 Leverage
-13%
Non-Deal Roadshow | 2019 10Global Portfolio
Geographic Distribution OMERS Offices
Europe
17%
Canada
30%
United
States
44% Rest of the World
Toronto Calgary Luxembourg San Francisco Vancouver
9% Amsterdam Edmonton Montreal Singapore Washington
Boston London New York Sydney
OMERS manages more than 95% of its investments internally,
with a team of 750 investment professionals.
Non-Deal Roadshow | 2019 11Strong Funded Status
Plan funded ratio (%) Discount rate (%)
101 Funded Discount Rate
6.25%
97 97 6.20% 6.00%
5.75%
94 2.00%
93 2.00% 2.00%
96 2.00%
94
89 93
4.25% 5 bps 4.20%
91
92 20 bps 4.00% 3.75%
Target
88
2013 2014 2015 2016 2017 2018 2015 2016 2017/18 2025
Inflation Rate Real Rate
Funded ratio - smoothed value of assets Funded ratio - fair value of assets
A goal of our strategy is to be fully funded by 2025.
Non-Deal Roadshow | 2019 12Ensuring Our Investments Are Sustainable
Our Approach Our Investments
Integration We seek to engage
ESG factors into our
investment decision-
making processes and
asset management
practices.
Engagement We seek to actively and
directly engage with
investee companies and Leeward Renewable Energy “The Stack”
other stakeholders to A leading owner, operator and developer Vancouver office development featuring
promote sustainable of wind projects in the U.S., with 19 wind smart building technology and multi-
business practices and farms across nine states, comprising modal transportation options. Targeting
long-term thinking. 1.7 GW. LEED Platinum status and participating in
the Net Zero Carbon pilot.
Collaboration We collaborate with
others to exchange
information and to
advocate for better
transparency and
performance on relevant
standards and practices.
Adaptation We commit to enhancing
our capabilities and
practices to ensure they
remain transparent, ERM ArcTern Ventures
relevant and effective A leading global provider of A global, early-stage venture capital
over time. environmental, safety, risk and social company focused on breakthrough
consulting services. clean technologies in Canada, including
renewable energy, agritech and mobility.
Non-Deal Roadshow | 2019 13Debt Issuance Non-Deal Roadshow | 2019 14
Funding Program
Why issue term debt?
To benefit from OMERS To hedge non-CAD To complement
strong credit rating exposure floating rate borrowings
Recourse Debt
Comprised of guaranteed term debt, commercial paper and bank facilities
Term Debt Commercial Paper
• Board-approved limit: US$5.0B • Board-approved limit: C$5.0B
• Ability to issue in USD, CAD, EUR, • Ability to issue in CAD and USD
GBP, AUD and JPY • Backstopped by C$3.75B facility
• We do not expect to borrow for • Issued in 30-, 60- and 90-day tenors
tenors >10 years • Program established in 2010
• 144A/RegS format
Debt liabilities have priority Recourse debt is limited to
over pension liabilities 10% of Plan net assets
Non-Deal Roadshow | 2019 15Funding Structure
OAC’s Credit Aa1 AA+ AAA AAA
Ratings
OMERS Administration
Corporation (OAC)
Guarantee
Bonds
Loans
Proceeds
Investors OMERS Finance Trust Subsidiaries
(OFT)
Ticker: OMERFT
Non-Deal Roadshow | 2019 16Comparison to Canadian SSA Peers
Issuer Export Canada Pension CDP Financial Inc. OMERS Finance Trust Ontario Teachers’ Province of
Development Plan Investment Finance Trust Ontario
Canada Board
SSA Ticker EDC CPPIBC CADEPO OMERFT ONTTFT ONT
Assets n/a C$317B* C$310B C$97B C$175B* n/a
Ownership Agent of Her Non-agent Crown Mandatory and Independent from its Independent Sub-sovereign
Majesty in right entity; 100% owned property of the sponsors, Ontario-based ownership
of Canada; 100% by the Government Province of Quebec. municipal governments structure from its
owned by the of Canada Acts with full and local boards joint-sponsors,
Government of independence in the Government
Canada accordance with the of Ontario and
CDPQ Act. Ontario Teachers
Federation
Recourse of Recourse to the Minimum Assets Creditors have Creditors have a priority All assets are Recourse to the
Creditors Consolidated Held legislation; priority of claim claim on the Fund’s owned by OTPP Consolidated
Revenue Fund of transfers from over depositors’ assets because the and cannot be Revenue Fund of
Canada CPPIB are not participation terms that govern the diverted by the the Province of
permitted unless deposits. Issuer is OMERS Plan provide Government or Ontario
asset values exceed not responsible for that properly incurred OTF. Creditors have
liabilities. pension liabilities. liabilities of the Fund a priority claim on
rank ahead of payments the fund’s assets
to beneficiaries. ahead of payments
to beneficiaries.
Ratings Aaa/AAA/– Aaa/AAA/– Aaa/AAA/AAA Aa1/AA+/AAA Aa1/AA+/ – Aa3/A+/AA-
(M/S&P/F)
Issuance/Year US$10-12B C$7-10B ~C$5B US$1-2B C$1-2B C$32B
*As at December 31, 2017.
Non-Deal Roadshow | 2019 17Review
OMERS FUNDING
Captive membership Debt liabilities
and diverse have a priority over
employers pension liabilities
Established by legislation, Low leverage and
and independent from Aa1/AA+/AAA credit
the Province of Ontario ratings
Additional Information
Performance Governance, Legislation and Regulations Investment Approach Sustainability
Financial Highlights Administration Corporation Board of Directors Investment Beliefs Sustainable Investing
www.omers.com/performance www.omers.com/ac www.omers.com/board Investment Policies and www.omers.com/sustainable
Annual Results OMERS Act Plan Texts Procedures
www.omers.com/results www.omers.com/act www.omers.com/text Valuation
Senior Executive Team www.omers.com/policy
www.omers.com/leadership
www.omers.com/oft | investorrelations.oft@omers.com | +1 416.369.3677
Non-Deal Roadshow | 2019 18Notice to Investors This presentation has been prepared solely for informational purposes and does not constitute or form part of, and should not be construed as, an offer, invitation or inducement to purchase or subscribe for any securities. No part of this material, nor the fact of its publication, should form the basis of, or be relied on in connection with, any contract or commitment or investment decision whatsoever. No representation or warranty, either express or implied, is provided in relation to the fairness, accuracy, completeness or reliability of the information or any opinions contained herein, and no reliance whatsoever should be placed on such information. Any opinions expressed in this material are subject to change without notice and neither OMERS Finance Trust (the “Company”) nor any other person is under any obligation to update or keep current the information contained herein. Neither the Notes to be issued by the Company described in this presentation nor the Guarantee thereof by OMERS Administration Corporation (“OMERS”) have been registered under the U.S. Securities Act of 1933, as amended (the “Securities Act”) or the securities laws of any other jurisdiction, and the Company is not registered and does not intend to register as an investment company under the U.S. Investment Company Act of 1940, as amended (the “Investment Company Act”). Any Notes offered are offered in the United States only to “qualified institutional buyers” (as defined in Rule 144A under the Securities Act) who are also “qualified purchasers” (as defined in Section 2(a)(51) (A) of the Investment Company Act and the rules thereunder) and outside the United States to non-U.S. persons in compliance with Regulation S of the Securities Act. This presentation contains forward-looking statements regarding future events and our future results within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include, without limitation, those regarding the Company’s financial position and results, business strategy, and plans and objectives of management for future operations. These statements are based on our current expectations and projections about future events and are identified by terminology such as “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “expected,” “intend,” “will,” “may,” or “should” or the negative of those terms or variations of such words, and similar expressions are intended to identify such forward-looking statements. In addition, any statements that refer to projections of our future financial performance, our anticipated growth and trends in our business and other characteristics of future events or circumstances are forward-looking statements. Although we believe that our plans, intentions and expectations are reasonable, we may not achieve our plans, intentions or expectations. These statements involve risks and uncertainties. Our actual results could differ materially from the results expressed or implied by such forward-looking statements. Furthermore, reported results should not be considered as an indication of future performance. In addition, there may be other factors of which we are presently unaware or that we currently deem immaterial that could cause our actual results to be materially different from the results referenced in the forward-looking statements. All forward-looking statements contained in this presentation are qualified in their entirety by this cautionary statement. Forward-looking statements speak only as at the date they are made, and we do not intend to update or otherwise revise the forward-looking statements to reflect events or circumstances after the date of this presentation or to reflect the occurrence of unanticipated events, except as required by applicable law. This presentation is directed at and is only being distributed in the United Kingdom to: (i) persons who have professional experience in matters relating to investments who fall within the definition of “investment professionals” in Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the “Order”); (ii) high net worth entities and other persons to whom it may lawfully be communicated falling within Article 49 of the Order or (iii) persons to whom it may otherwise lawfully be communicated. Other persons in the United Kingdom should not read, rely upon or act upon this material. By accepting receipt of this material, each recipient in the United Kingdom acknowledges that they are a person falling within one of the foregoing categories. Other persons in the United Kingdom should not rely or act upon this material. Pursuant to applicable securities laws (including, but not limited to, the European Market Abuse Regulation), the recipients of this material should not use this information to acquire or sell, or attempt to acquire or sell, for themselves or for a third party, either directly or indirectly, any Notes until after the information has been made available to the public. It is also forbidden for the recipients to pass on the materials to another person outside the scope of their work, profession or function and to recommend, or arrange for, on the basis of these materials, the acquisition or the selling of, Notes so long as the information has not been made available to the public. The same obligation applies to any other person who obtains this material and knows or should have known that the information that it contains is inside information (within the scope of the Market Abuse Regulation and other applicable securities laws). No securities commission or similar authority in Canada has in any way passed upon the merits of the securities referred to hereunder nor has it reviewed this document, and any representation to the contrary is an offence. The securities that may be offered hereunder have not been and will not be qualified for distribution to the public under the securities laws of any province or territory of Canada and will only be offered in Canada pursuant to applicable private placement exemptions. Non-Deal Roadshow | 2019 19 Version 9
Non-Deal Roadshow | 2019 20
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