Fees and Expenses

Administration Fee

OMERS will incur expenses associated with the start-up, operation and maintenance of AVC accounts. These expenses are in addition to expenses related to the administration of the defined benefit provision of the OMERS Plan and will be recovered by an annual flat fee. For 2012, the administration fee is $23. The administration fee is based on cost recovery and is subject to review. The administration fee may change over time.

Investment Management Expenses

Contributions to an AVC account will receive the same net investment returns as the OMERS Fund. Net investment returns for a given year represent investment returns after accounting for the investment management expenses incurred for that same year. Investment management expenses can be expressed in dollar terms, and also as basis points that are deducted from the gross rate of return, in order to determine a net rate of return. 

The table below shows OMERS investment management expenses as basis points relative to the value of the Fund in the applicable year. A basis point equals 1/100th of one percentage point and the calculation is based on an average value of Fund net assets.

As you can see from the table, investment management expenses can vary from year to year relative to the reported value of the OMERS Fund. Over the past few years, investment management expenses as a percentage of Fund net assets increased as OMERS developed and began to implement the strategic plan outlined in the OMERS 2011 Annual Report and as the value of the average Fund net assets declined due to the 2008 global financial crisis.

It is important to note that investment management expenses expressed as basis points cannot be set and communicated in advance to members who participate in the AVC provision, as the basis points are based on the actual expenses that are incurred and on the average value of the Fund in a given year.   

*A basis point equals 1/100th of one percentage point. For example, 64 basis points equals 0.64%.