Lochead and Infantino: How to increase accountability in the public service? Start with Revera

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As the new President of the Treasury Board, one of the responsibilities of MP Mona Fortier should be to increase accountability and transparency in the management of the federal public service.

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A good first step would be to start with the Federal Public Service Pension Fund (RPP) of the Treasury Board and its ownership of Revera.

Revera is a for-profit pension company owned by the PSP. The company’s high death rates during COVID and its long string of class action lawsuits have received much media coverage.

Unlike its listed competitors Extendicare, Chartwell and Sienna, Revera is privately owned. This means that when the media reported the high salaries and bonuses paid to executives at large long-term care companies last year, Revera was not included – not because its executives’ salaries were lower. , but because as a private company it is not obligated to disclose this information.

Revera was acquired by the Federal Office for the Investment of Public Sector Pensions (OIRPSP), a crown corporation whose role is to invest funds for the pensions of federal public service employees.

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Revera’s appalling toll during the pandemic prompted all federal public service unions to come together to demand that the PSPIB divest itself of this investment and that Revera become a public company. The management of OIRPSP or the Treasury Board did not respond to this proposal.

When individual public service employees asked the President of OIRPSP at their annual general public meeting to disclose the salaries and benefits of Revera executives, their questions were ignored. In fact, the company received only one row in the entire 340-page PSPIB annual report.

When asked directly what the federal government can do about Revera, Deputy Prime Minister Chrystia Freeland replied that all options are on the table. But Freeland also added that the PSPIB is an independent pension fund operating separately from the federal government, apparently justifying the government’s non-intervention position.

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While all federal public service unions want to make Revera public, and opinion polls indicate a majority of taxpayers are against for-profit long-term care homes, the OIRPSP may be deliberately ignoring the opinion. of its members and of Canadian taxpayers. Why? Because, he says, like most pension funds, its mandate and fiduciary duty to retirees is to maximize returns without undue risk of loss.

Yet shareholders are increasingly questioning this mantra and demanding that their pension fund investments reflect their concerns about climate change, unethical working conditions and corrupt corporate practices known as name of environmental, social and governance (ESG) directives. These are now required for pension funds and investment houses. The PSPIB 2021 annual report devoted 22 pages to them, citing examples of actions carried out. But Revera was not included.

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Right now, public service retirees don’t know what percentage of Revera’s profits come from long-term care homes as opposed to its retirement homes. It is highly likely that the transfer of the long-term care business from Revera to state hands would have minimal impact on the overall revenues of the Public Service Pension Fund. Such a move would signal its members and the public that it takes its ESG statements seriously.

Much can be done here to improve transparency and accountability.

First, to have the PSPIB disclose the same level of information for Revera (its earnings and executive salaries) that is required for its listed competitors in long-term care.

Second, involve public service unions in monitoring the application of the ESG guidelines for the OIRPSP.

Third, if the public service employees pay 50 percent of the contributions into the pension fund, why not have these employees represented on the board of directors?

Finally, make the PSPIB more accessible. The notice of her most recent AGM was not even posted on her website.

Revera’s case is just one example of questionable investment decisions made by pension funds. The public service pension fund could be a good place to reverse this trend.

Richard Lochead and Jacques Infantino are federal public service retirees in Ottawa.

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