Provident10 Board of Directors

Department

Treasury Board Secretariat

Authority

Public Service Pensions Act, 1991 Joint Sponsorship Agreement Between: Her Majesty in Right of Newfoundland and Labrador, as represented by the Minister of the Department of Finance (the "Government") And: The Association of Allied Health Professionals ("AAHP") The Canadian Union of Public Employees ("CUPE") The International Brotherhood of Electrical Workers ("IBEW") The Newfoundland and Labrador Association of Public and Private Employees ("NAPE") The Newfoundland and Labrador Nurses' Union ("NLUN") (collectively the "Unions')

Remuneration

The annual remuneration for the Public Service Pension Plan Board of Directors is as follows: - Chair $5,000 - Vice-Chair $2,500 - Director $1,250 - Chair of Sub-Committee $1,250 (in addition to Director's annual remuneration) Remuneration of Directors per meeting, Half day - $250 Full day - $500. All directors receive the annual honorarium, but government and union employees do not receive meeting fees. Travel incurred related to the business of the Board of Directors will be reimbursed in accordance with the established travel policy.

Purpose:

On December 10, 2014, the Government of Newfoundland and Labrador signed a Joint Sponsorship Agreement (JSA) with the five largest unions representing the employees of the Public Service Pension Plan. This agreement provides for joint management of the pension plan and equal sharing of future surpluses and deficits in the pension fund between government and plan members. A pivotal element of the JSA is the establishment of an independent corporation known as Provident10 (formerly the Public Service Pension Plan Corporation) as a statutory corporation without share capital and which is not a Crown agent. Provident10 was established to administer the plan and manage the investment of the Public Service Pension Fund.

Provident10 is managed by a Board of Directors, the roles and responsibilities of which are defined in Appendix B of the Joint Sponsorship Agreement. The Board of Directors is accountable for the exercise and discharge of the objects of the corporation which are as follows:

• To act as trustee of the Public Service Pension Plan Fund (the Fund)
• To act as administrator of the pension plan, and to exercise those other powers and perform those other duties as may be expressly conferred upon the corporation under the JSA

For additional information on the role of the PSPP Corporation, please refer to:     

• www.Provident10.ca
• The Public Service Pensions Act, 1991 (available on-line at www.assembly.nl.ca/business/bills/bill1439.htm)

Structure:

Pursuant to the JSA, the Board of Directors is comprised of 14 persons who are to be appointed as follows:

• Six Government Appointees
• Six Union Appointees
• 1 Non-union Appointee
• 1 Inactive Member Appointee

There is a Chair and Vice-Chair of the Board of Directors. The initial Chair was appointed by Government from among the Directors. The initial Vice-Chair was appointed by the Unions from among the Directors. The Chair and Vice-Chair serve for a two year term. At the end of each term on a rotating basis, the Government Appointees will appoint a Chair or Vice-Chair of the Corporation from their Board members; and the Union Appointees will appoint a Chair or Vice-Chair from their members.

Competency Profile:

Each of the Government Appointees, as a collective, and the Union Appointees, as a collective, must possess competencies, by reason of experience, commitment or knowledge, in the following areas:

• Pension plan governance, including understanding the roles of the Sponsors, the fiduciary board and the service providers in the overall governance of Provident10
• Pension administration
• Delegation to and monitoring of agents, employees and advisors
• Asset/liability management and pension policy
• Macro-economic considerations and their impact on investment strategies and pension obligations
• Capital markets and private investments such as infrastructure, private equity and real estate
• Investment risk management
• Pension plan design issues and pension policy issues
• Actuarial terminology and actuarial balance sheets
• Key issues in contractual relationships with sophisticated counterparts
• The application of and compliance with pension laws, cases and regulatory rules, including the requirements of any provincial legislation and the Income Tax Act (Canada)

The Board of Directors must also ensure that all new Directors receive a comprehensive orientation, ensuring that they fully understand:

• The role of the Board and its committees, if any
• The contribution expected from individual Directors
• The objects of the Corporation

Continuing education opportunities will also be provided to all Directors so that they can maintain or enhance their skills and abilities and ensure that their knowledge and understanding of the objects of the Corporation remain current.

Qualifications:

The following qualifications have been identified (as per the JSA):

• A representative on the Sponsor Body must not be a Board Director
• An officer of the Corporation must not be a Board Director
• Qualification as a Board Director is subject to Section 172 of the Corporations Act, RSNL 1990, c-36

A Board Director, in exercising his or her powers and discharging his or her duties, must also:

• act honestly and in good faith with a view to the best interests of the pension plan and for the benefit of all employees, pensioners and deferred pensioners
• exercise the care, diligence and skill that a reasonably prudent person would exercise in comparable circumstances

Additionally, according to the JSA, the Board of Directors should also possess the following personal characteristics:

• Integrity, including familiarity with and a high regard for fiduciary obligations
• Strong commitment to time and effort required to undertake the role
• Demonstrated ability to contribute and operate with candor and intelligence while supporting other directors to do the same
• Effective negotiation skills in articulating viewpoints with influence to arrive at a conclusion in the best interests of the Pension Plan and for the benefit of all Members
• Strong conflict management skills to enable the identification and handling of conflicts in a sensible, fir and efficient manner
• Willingness to accept and support Board decisions
• Acting with a mindset of impartiality as it relates to Sponsors
• Freedom from influence by any factors other than the interest of the Pension Plan and all Members
• Team effectiveness, including the ability to work effectively in a collegial environment and to facilitate consensus and compromise
• After the Government has ceased to provide plan administration and plan investment services to the PSPP, absence of systemic conflicts of interest it being understood that membership in or employment by a Union or the Government or entitlement to or receipt of a benefit from the Pension Plan does not constitute a systemic conflict of interest
• Ability to identify the limitations of the Directors’ own knowledge and the need for independent professional advice, and to understand and evaluate such advice

Government must ensure that their appointees, as a collective, have these personal characteristics.

Time Commitments:

At the beginning of each fiscal year, the Board will schedule at least four meetings to be held during the year. Each Board Director will be provided the date, time and location of these meetings. No other notice will be required for these meetings. It should be noted however that any director may request the Chair to convene a meeting of the Board.

All meetings of the Board will be held within the Province. A meeting of the Board may be held by means of telephone or such other communication facilities.

Additionally, the Board may from time to time appoint a committee or other advisory body, it deems necessary. Membership of such committees/advisory boards may be comprised of Board Directors and/or persons other than Directors. Any such committee/advisory board may formulate its own rules of procedure, subject to such regulations or directions as the Board may make, including the frequency of meetings. Presently, the following sub-committees have been established:

• Governance/Human Resource Committee
• Audit Committee
• Investment Committee

A description of each of the above sub-committees is provided in the additional information section at the end of this profile.

Board members may also be expected to spend additional time to review materials and prepare for Board and Committee meetings.

Term:

Each Director must be a resident of Canada for the duration of his or her appointment.

All Directors will serve for a three-year term with the exception of the initial appointment of Directors. For the initial appointment of Directors:

• Two Directors appointed by each of the Government and the Unions serve for an initial four-year term
• Two Directors appointed by each of the Government and the Unions serve for an initial three-year term
• Two Directors appointed by each of the Government and the Unions serve for an initial two-year term.

No later than six months before the expiry date of a Director’s term, the Chair provides written notice to the entity that appointed the Director of the expiry of the term.

A Director continues to serve until their representative is appointed or they resign, in which case the entity that appointed that Director, within 30 days of receive notice of the vacancy, appoints a successor Director to serve for the remaining term of that Director.

Vacancy Profile:

Government is responsible for appointing six government appointees to the Board of Directors.

Currently, there are three such appointments that have expired or are set to expire, and therefore, expressions of interest are being sought from individuals with experience in pension plan governance, adminstration and investment.

Consideration will also be given to a variety of demographic factors to ensure the Board is representative of the population they serve, with preference for those candidates currently residing in this Province.