December 12 th, 8:00am to 4:30pm AOMBT Trustees: Karin Terpstra, Chair Debbie Doiron Kelly Gascoigne Kelly Graff (AOM Board Member) Andrea Mills Diana Doe Melinda Soares Kelly Stadelbauer (AOM Executive Director) Esther Willms (AOM Board Member) AOMBT staff: Nicole Mellin, Director Janice Fuller, Manager, Benefit Operations & Administration Allison Jack, Executive Assistant & Communications Officer Morneau Shepell: Marilynne Madigan Riza Sychangco Rob Boston Vladimir Bobko December 12, 1. Meeting called to order K. Terpstra, as Chair, called the meeting to order at 8:58am. 2. Confirm editors of minutes for this meeting K. Terpstra and K. Graff will edit the minutes for this meeting. 3. Presentation from Morneau Shepell on AOMBT s Group RSP plan R. Boston, Partner, Morneau Shepell, presented on Outcome-oriented investing. This new approach to investments is currently being rolled out to select Morneau clients, and will likely be available to DC (defined contribution) clients such as the AOMBT within the next year. o o One of the key features of the AOMBT Group RSP plan is the lower management fees. The representatives from Morneau Shepell indicated that this new investment program, when available, could result in a further reduction of our management fees (depending on individual selection of funds). R. Boston spoke to a shift in the perspective of what diversity of funds mean. Fund diversity and choice has also been a key issue for midwives. A plan that would enable further diversification and broader choice of type and variety of funds would make for a stronger plan, both in perception to members and according to R. Boston s report. AOM Benefits Trust Trustee meeting minutes 1
December 12 th, 8:00am to 4:30pm o Morneau Shepell encouraged Trustees to continue to discuss and investigate this new approach over the coming months. Trustees are finalizing adjustments to our members benefits program and agree that strengthening our RSP programs and platform is an important next step. V. Bobko, Investment Consultant, Morneau Shepell, presented on our Annual Investment Performance, as of September 30,. o It was noted that 14 members closed their RRSPs in this period. This information will be included in future reports from Morneau. o It was noted that nearly half of all members are selecting their own investments. Decision: V. Bobko to provide breakdown of those members selecting their own investments. o Trustees indicated some concern by the number of members who have withdrawn funds from their RRSPs, which should be reviewed against the number from 2012. It was noted that some of this may be from members who are using the funds for personal reasons. Decision: V. Bobko to provide information on past year s withdrawals for comparison. o An important approach for the AOMBT will be to continue to educate and encourage members about the added features of our plan alongside strengthening that plan so that it attract and retain more members. Decision: V. Bobko and R. Sychangco to check on feasibility of determining why members are withdrawing funds. This could be a short exit survey. R. Sychangco will provide a draft to N. Mellin. This discussion will continue at the Trust level. o The performance of Hexavest and Blackrock funds were discussed. It may also be useful to have a summary at the end of the presentation, noting which funds are currently on watch and clarifying exactly what that means. This could include an action plan with a road map for addressing issues. Decision: V. Bobko will provide summaries of data and also recommendations from Morneau regarding follow-up on issues around Trust RSP funds in the future. o It was noted that feedback from members tends to focus on RSP performance and returns. Trustees thanked the representatives from Morneau Shepell, who then left the meeting. 4. Consent agenda The September minutes (4.2) and practice administrative staff benefit enhancements: survey report and update (4.5.3) were removed from the consent agenda. The agenda was revised to defer the Critical Illness presentation (7) and add 5.2. Succession Planning. AOM Benefits Trust Trustee meeting minutes 2
December 12 th, 8:00am to 4:30pm The revised consent agenda is as follows: 1.1. Approval of the agenda (revised as noted above) 1.3. Chair s Report 1.3.1. 2014 Meeting calendar 1.3.2. Trust Agreement revisions 1.3.3. 2014 Elections 1.3.4. Committee meetings: process and communication 1.3.5. Fall Regional meetings report 1.4. Director s Report 1.4.1. IT strategy update 1.4.2. EAP/member assistance program 1.4.3. Staffing update 1.4.4. audit report 1.4.5. Equitable/AOMBT booklet and policy review 1.5. Member Services Committee report 1.5.1. Member survey update 1.5.2. Parental leave program evaluation framework 1.5.4 AOM employee benefits enhancement update 1.6. Governance Committee report 1.6.1. Director role performance evaluation 1.6.2. Policy development 1.6.3. Strategic partnerships 1.6.4. Strategic planning update Motion: K. Terpstra moved to approve the consent agenda as amended. K. Graff seconded and the motion carried. 1.2. September meeting minutes It was raised by a Trustee that future minutes for Trust meetings could be prepared in a more abridged format capturing just the key discussion points as well as any action items, motions and/or approvals. A discussion amongst Trustees was held in this regard and it was agreed that this format would be utilized for December s minutes and any issues on this new format be brought forward at January s meeting. Decision: December minutes for the Trustee meeting and future meetings will be prepared in a more condensed format and summarized as noted above. A. Jack will revise the September minutes and re-circulate for approval via email. 4.5.3. Practice administrative staff benefit enhancements: survey report and update The Member Services Committee are scheduled to meet again on December 20,. We have received the revised costing from Morneau Shepell that includes moving administrative staff to the enhanced plan and continuing employer-paid LTD. Lalita Pereira from Morneau Shepell will participate and present at the meeting. The survey results indicate that the majority of practice admin staff prefer to continue having their employer pay LTD premiums. They would also like to have enhancements AOM Benefits Trust Trustee meeting minutes 3
December 12 th, 8:00am to 4:30pm similar to those introduced for midwives and other member groups with the changeover to Equitable Life on May 1 st. They also have a strong interest in vision benefits. The tax implications of employer-paid versus employee-paid LTD were presented by Morneau Shepell during the webinar for practice partners held in October, although it may have been unclear for those unfamiliar with disability benefits. It was noted that it is a commonly misunderstood issue in general; often, employees in general do not want to pay any premiums and assume that they will not need disability benefits. A discussion was held amongst Trustees regarding their role for the different AOMBT plan member groups. Trustees also have a clear responsibility to make decisions based on what is best for the membership group as a whole. Given that practice admin staff are employed by the practices, AOMBT has a responsibility to provide accurate, unbiased information to the practice partners, who, as employers, are then responsible for making decisions about the benefits plan for their staff. AOMBT determines the scope of the plan and has a mandate for delivering this plan in a fair and equitable way to various plan member groups who are part of this benefits program. It was noted that there are a small number of practice administrative staff who pay their own premiums, and as such need to be considered in decision-making. The approach of employers providing an increase in pay that covers off at least the amount of increased cost of LTD premiums for their staff was mentioned. This issue will be discussed further with Trustees in future meetings, however, it was agreed that no recommendation can be made to plan member groups in this regard. Decision: A. Mills will investigate the tax implications and restrictions on the option above. Following the meeting on December 20, the Member Services Committee hopes to be able to make a recommendation to Trustees on potential changes to the benefit plan for practice administrative staff. 5. Governance Committee 5.1.1 Cheque signing; 5.1.2 Contract review and signing; 5.1.3 Signing authority The above 3 policies were reviewed by Trustees and no changes were made. It was noted that AOMBT financial policies will be reviewed annually as noted on these policies. Motion: K. Graff moved to approve the following policies: Cheque signing, Signing authority and Contract signing and review. K. Gascoigne seconded and the motion carried. 5.1.4 Stipend policy The Stipend policy was discussed by Trustees. A brief update was provided on this policy, noting that there was an attempt to obtain examples of other non-profit/comparator organization stipends or honorariums. As noted by staff, this was difficult to obtain and no examples were brought forward. A discussion was held about the overall intent and philosophy with the Stipend policy, noting that the amount provided to Trustees for Trust-related work would not entirely cover off their total hours worked and that there is a volunteer aspect to this work. AOM Benefits Trust Trustee meeting minutes 4
December 12 th, 8:00am to 4:30pm K. Stadelbauer noted the AOM Board approach to paying stipends to Board members. The AOM stipend policy outlines a certain number of hours worked that are considered volunteering before compensation begins. Consensus was reached by Trustees to increase the committee chair stipend to $500 and amend the policy to note that this amount would be pro-rated for the calendar year since that has been the precedent set until this time. It was noted that K. Terpstra is currently the chair of the Governance Committee. The Governance Committee will consider if this is the optimal role for the Trustee Chair to maintain. Trustees also reached consensus that Task Force members could be compensated at a rate of $25/hour up to a maximum of $500 annually, which would be submitted to the Director, AOMBT for reimbursement in early December as part of stipend payouts. For non-trustee members who worked on a specific Trust-related task (such as work related to the Member Information Reports, or Midwifery Work Units), as subject matter experts would be paid at a rate of $25/hour was agreed to. Members being paid out for Trust-related work as contractors would need prior approval from the Chair of the Benefits Trust or Director, AOMBT with an invoice being submitted for payment of hours and be paid at an hourly rate of $50-$65/hour. Compensation for other contractors is up to the discretion of the AOMBT Director as it is an operational issue. Decision: AOMBT staff will revise the Stipend policy as discussed. A revised version will be reviewed by the Governance Committee in January and will be recommended for approval to the Trust when revisions are complete. 5.1.5 Expense reimbursement It was noted that the AOM has an expense reimbursement policy that pays at a rate of 45 cents/km for work-related travel. Consensus was reached that the AOMBT policy be amended to reflect this amount. A discussion was held regarding childcare-related expenses. It was agreed that much of Trustee-related work is via teleconference, which can be difficult to conduct if young children are at home. It was agreed that childcare-related expenses would be paid for Trustees where reasonable and required for Trustee-related work both via teleconference and/or at meetings. It was also agreed by Trustees that the amount for childcare costs should reflect the minimum Ontario hourly wage up to a daily maximum as noted in the draft policy. Receipts are required for any expenses (for childcare, receipts should note the date and hours worked, etc). It was also discussed by Trustees that where there are other personal situations that could present a barrier for a new or serving Trustee to participate on the Trust (e.g. Other caregiving responsibilities to a elderly parent) that caregiving-related costs should be considered a valid expense. The possibility of developing a caregiving policy was raised. AOM Benefits Trust Trustee meeting minutes 5
December 12 th, 8:00am to 4:30pm A discussion was held regarding the possibility of approving the policy retroactively (for one year) as it was raised that the practice of covering childcare-related costs had been previously understood as being covered. K. Terpstra declared a conflict of interest and left the meeting for the discussion. Trustees continued to discuss the issue and reached consensus that making it retroactive for one year would not be reasonable. K. Terpstra rejoined the meeting. Motion: D. Doe moved to approve the Expense reimbursement policy with noted changes as of December 12,. K. Gascoigne seconded and the motion carried. Decision: A care-giver policy will be developed in relation to the expense reimbursement policy. It will go through the Governance Committee before it is presented to Trustees for approval. 5.2. Succession planning The terms of office for both K. Terpstra and D. Doiron are up as of March 31, 2014, as per the current Trust Agreement, which states that Trustees may serve up to 2 consecutive 3- year terms. A process began in February to revise aspects of the Trust Agreement, including extending Trustee term limits to 3 consecutive 3-year terms, amongst other items. The proposed third-round revisions are being reviewed by AOMBT s legal counsel and will be presented for approval at the January 10 th Trustee meeting, before they are brought forward to the AOM Board for approval on January 22. Consensus was reached that 3 consecutive 3-year terms is a more appropriate limit for Trustees. Consensus was also reached that it would be ideal to have succession planning for all of the Trustees, but particularly for the role of chair commence in 2014. Having a mentoring period of at least one year prior to the current chair`s end of term for the incoming chair (vicechair) was also recommended for the Benefits Trust. If the proposed revisions to term limits are approved, K. Terpstra and D. Doiron noted that they would both willing to stand for re-election. Regardless of the election results, Trustees will need to appoint a chair. K. Terpstra declared her conflict of interest and left the meeting room. Consensus was reached that Trustees will appoint K. Terpstra to the chair position if she is re-elected. If K. Terpstra is not re-elected, Trustees will then consider an alternative approach. K. Terpstra returned to the meeting. Decision: A policy related to elections and succession planning will be developed. It will go through the Governance Committee before it is presented to Trustees for approval. 6. Finance and Audit Committee 6.1. Motion to add A. Mills, Finance and Audit Committee Chair, as signing officer AOM Benefits Trust Trustee meeting minutes 6
December 12 th, 8:00am to 4:30pm It was agreed by Trustees that K. Stadelbauer will remain as a signing officer. Having up to 3 signing officers for the Trust is optimal in cases of absence. Motion: K. Stadelbauer moved to add Andrea Mills as a signing officer for the AOMBT as per the Cheque Signing and Signing Authority policies. D. Doe seconded and the motion carried. 6.2. Financial statements All Trustees confirmed they have reviewed the financial statements and have no questions at this time. 6.3. Sustainability grant projections N. Mellin presented on the Sustainability grant projections. As reported by N. Mellin, participation in the parental leave program has been lower than expected over the course of the past few months. Participation rates and projections will continue to be closely monitored by AOMBT staff. The possibility of retroactively increasing the monthly maximum payment to optimize payments to midwives was discussed and has been considered as possibly the best way to maximize funds for members, which may no longer be able to be carried forward. K. Stadelbauer gave an update on her meetings with the Ministry of Health. It seems unlikely that any funding will be cut in the short term. The parental leave policy will need discussion and potential revision to include the intention of maximizing the benefit for members within a contract year. This will be discussed further at the Member Services Committee. Decision: The Member Services Committee will review and discuss the Parental leave policy. 6.4. 2014 draft AOMBT budget N. Mellin presented on the draft 2014 budget, which was shared previously with the Finance and Audit Committee. She called attention to key items, such as planned projects and increases in the budget for items such as the regional meetings and office expenses. The Finance and Audit Committee has been discussing the optimal way of presenting statements to best reflect operations and benefits that flow through the Trust. The final draft budget will be presented to Trustees in January for final approval. 6.4.1 $62,000 surplus, reserve fund, restricting funds for systems administration development As is noted on previous meeting minutes, the $62,000 was surplus funding from a Ministry of Health grant from over 10 years ago for an admin upgrade project. A number of attempts in previous years have been made to the Ministry to inquire about returning the funds. The Finance and Audit Committee discussed the matter with our auditor, J. Rade. J. Rade recommended internally restricting the funds to be used in a manner in line with the original intention of the grant. The Finance and Audit Committee agreed with J. Rade s AOM Benefits Trust Trustee meeting minutes 7
December 12 th, 8:00am to 4:30pm recommendation, and as such, is recommending that the Trust motion to internally restrict $62,000 to special projects as part of the database development work commencing in 2014. It is noted that there is always the potential that the Ministry of Health could ask for the surplus returned some point in the future. This possibility is believed to be quite remote at this point. The Finance and Audit Committee recognizes this risk and recommends to the Trust that it is a reasonable risk to take given the length of time that has passed and the fact that the funds will be restricted for a purpose related to the original grant intent. Motion: K. Gascoigne moved to internally restrict $62,000 for special projects. D. Doe seconded and the motion carried. As noted in a pre-circulated letter to Trustees from AOMBT`s legal counsel, the statute of limitations has expired for the settlement amount being reserved for the potential payout to the former TD Waterhouse/AOMBT financial advisor. Funds set aside for this potential claim came from RSP basis point collection. That same collection has been utilized to fund member financial education in the interim. Trustees discussed the collection of RRSP basis points for financial education. It was noted that these funds are collected from midwives who hold funds in the group RRSP plan, but that the financial education offerings are available to all plan members. Financial education discussion document, prepared by K. Terpstra and shared in advance of the meeting, provides additional background information on the basis points. As noted in this discussion document and based on recommendations from J. Rade, K. Terpstra recommends discontinuing the collection of basis points and internally restricting the funds collected to date for special projects that will be beneficial to all members. J. Rade also recommended internally restricting the majority of the unrestricted surplus for special projects, leaving a reserve or contingency fund. Based on J. Rade s guideline of 10% of operating costs, N. Mellin and J. Fuller recommend a $95,000 contingency fund representing roughly 3 months of operating costs. The full recommendation then is to internally restrict the following to be utilized for special projects in education and service that benefit the entire membership: the funds set aside for a potential settlement to the former TD Waterhouse/AOMBT financial advisor, the financial education funds from 2011-, and the above restricted $62,000. There is also an outstanding to date unrestricted surplus that has been intended for systems and infrastructure development, which will be restricted to the same purpose, totalling $745,516. This surplus is the result member fees that had not been previously allocated. The goal is to utilize these funds to bring these ideals of operations and management to life within our next strategic plan timeline and that these will greatly improve service to members. The possibility of restricting the basis points funds separately from the surplus and settlement funds was discussed, though was not recommended by our auditor. The possibility of still using those basis point funds collected from midwives for membership education versus utilizing funds from operations since our members are not just midwives was also discussed at length. AOM Benefits Trust Trustee meeting minutes 8
December 12 th, 8:00am to 4:30pm After some discussion, consensus was not reached, and the discussion was deferred to December 13,. The meeting adjourned at 5:09pm. December 13, The meeting was called to order at 8:50am. 6.4.1 $62,000 surplus, reserve fund, restricting funds for systems administration development The original intent of the basis points collection was discussed. Our uninitiated contract discussions indicate that it was for transfer of third-party members to our platform, telephone and in-person support and advice for individual members related to their investments with us and financial education in general. The intent of the special projects fund is to develop systems and infrastructure to better support members and strengthen the program as we grow. Our plan to repatriate benefits administration work currently being done by Morneau Shepell further intensifies the need for this special project work and its potential benefit to members. The possibility of restricting only the unrestricted surplus (funds saved for the last number of years for repatriation and systems and infrastructure development) was discussed, with the intent that the remaining funds ($160,000 currently internally restricted for financial education, collected from RRSP basis points, and the amount restricted for the potential settlement) would be revisited when we have a better idea of the cost of the database project. The basis point funds could then continue to be used for education. There was no consensus on this possibility. It was noted that J. Rade recommended having only one internally restricted fund with a purpose that is specific but will allow for some flexibility. It was noted that in the draft 2014 budget, $80,000 is budgeted for consultancies, $25,000 of which will be related to database development. Additional consultancies may be required related to privacy as we move forward on this project. Initial estimates indicate that repatriation and infrastructure and systems development to support that could be quite costly, though due diligence will be carried out for all contracts. It is noted that the contingency fund (reserve) will remain in the general account. A policy will be developed, initially at the Finance and Audit Committee, around the use of the funds. Consensus was reached that the amounts can be internally restricted for special projects with the caveat that a policy must be developed to guide the use of those funds. AOMBT staff will report regularly to Trustees as the project moves forward. Motion: A. Mills moved that the balance sheet as of December 31, reflect the establishment of a $100,000 reserve fund and an internally restricted fund for special administrative projects, the balance to come from the previously unrestricted surplus and previously internally restricted funds for financial education. 2 policies will be developed: one policy for the use of the reserve and one policy to guide the use of funds for special projects. K. Stadelbauer seconded and the motion carried. AOM Benefits Trust Trustee meeting minutes 9
December 12 th, 8:00am to 4:30pm Motion: K. Gascoigne moved to instruct Morneau Shepell to discontinue the collection of RRSP basis points for financial education effective January 1, 2014. A. Mills seconded and the motion carried. 7. Critical Illness presentation This item was deferred. 8. AOMBT website N. Mellin shared a screenshot of the early draft website home page. 9. Investment and education issues This item was discussed under 6. Finance and Audit Committee. 10. Benefits administration for the future The background materials for this item will inform the strategic planning discussions going forward. The meeting adjourned at 9:07am. AOM Benefits Trust Trustee meeting minutes 1 0