We learned in January that Saäd Rafi, former CEO of Toronto’s 2015 Pan Am Games, is our fearless leader for the Ontario Retirement Pension Plan Administration Corporation and we pay him a comfortable $500k+. Knowing the government it is probably $500k+++.
A number of times in my commentary I have suggested that I might be willing to take the job. I was half-joking when I thought the pay would be at half the size. Honestly, at $500k+ I would have taken the job and left Jason and Dean to run the Actuarial Solutions empire. Of course I have no track record organizing anything bigger than the boys’ backyard birthday party when they were 7 years old. So arguably my 30 years of pension industry experience, my actuarial credentials and the fact I run a pension administration business probably aren’t enough. OK, honestly, my wife is the mastermind behind the epic birthday party so I don’t even have that on my resume.
When I was speaking at the Benefits Canada 2016 Pension & Benefits Summit at the end of March, I was criticized for complaining about how much we were spending on Mr. Pan Am. My critic pointed out that to do this right we are going to need a capable executive at the helm and these dollars are appropriate for the size of the task at hand. That analysis of my complaint is very fair, the last thing you want is someone without a proven track record leading complex projects at the helm burning more of our taxpayer dollars than necessary.
Of course, the defense of the level of pay leads right into one of my fundamental arguments that I put on the table two years ago when our provincial government cooked up this scheme. It is funny to look back to that commentary to see how little we have learned about this fantasy in the last 24 months.
Many of you will have received the ‘good news – great news’ email from the ACPM on Friday morning announcing the ORPP AC’s search for “Pension Talent”. For those that missed it I posted my copy here. By the way, why is the ACPM announcing job openings for the ORPP? Is the ACPM doing that for free or is someone making some money here and why?
Maybe Friday’s email shouldn’t have taken me by surprise – after all, I have been complaining for a while about how much this adventure is going to cost. But I was taken by surprise – 23 positions to be filled right now! They aren’t telling us the target salary for these positions and it appears we already have an HR team doing the hiring – so I am just going to round to $2.5 million for payroll and benefits including the CEO (are we providing these folks with an ORPP pension or are we going ahead and giving them the slightly more generous public service pension?). Add to this another half million in office space and I figure we must be at least $3 million a year by now.
Remember, no contributions until 2018 and no benefits to be paid until 2022.
Now someone is sure to point out that with $6 billion in annual contributions expected at maturity, this $3 million is just a drop in the bucket. I don’t care, it is still $3 million we didn’t need to spend if we just used the CPP or one of our already existing administration teams at Teachers, OPTrust, HOOPP, etc. Of course, I remain doubtful that the government’s enrollment and contribution targets will be reached and so stay tuned for my 2022 commentary on that one. At this point I am invested (some say consumed) with this subject – I won’t be going anywhere as long as this ‘bad idea’ keeps rolling and with the CEO job taken and the board positions filled Ontario is probably out of opportunities to buy me out.