A $8 billion pension fund run by Canada’s government and funded by the pension plans of public servants has been hit by a massive Ponzial scheme, leaving more than 200,000 Canadians who received their pensions frozen out of their benefits.
The Ontario Provincial Employees Retirement System, known as OPRS, is responsible for providing the bulk of public-sector pension payments.
The fund had been in existence since the 1980s, but it was shut down by a Ponziac scheme that was believed to be running for more than five years, according to a news release issued by OPRFSA on Tuesday.
The scheme’s main purpose was to generate a $1.6 billion windfall for OPRs management by converting its $8.3 billion in assets into an $8,000-a-year salary increase that would make it worth much more to the fund than it would otherwise be.
In an email sent to staff on Tuesday, OPR’s board announced that the fund had suffered “a systemic breach of the trust” by a rogue trader.
In response, Oprs’ management team launched a massive campaign of “fraud prevention” and “deleting” emails from employees who had been affected by the Ponzios scheme, the release stated.
It did not specify what the fund was doing with the deleted emails.
The scandal prompted Ontario’s Auditor-General to launch an investigation into the matter, which is ongoing.
Ponzies are a growing problem across the country, but have become more prevalent in Canada in recent years, with a massive number of pension funds frozen out because they are not being paid in full.
In Ontario, the OPRC has been the target of several Ponzis, most notably one in which the scheme defrauded Ontario’s public-school pension system out of millions of dollars in funding.
The OPRCs management team was forced to suspend operations in May and June, as Opris continued to fund a scheme that included over $1 billion in pension benefits that were supposed to be returned to the public.
Oprists chief executive officer David Linton confirmed in an interview on CBC News Network’s Power & Passion on Wednesday that he had been notified that his pension fund was shuttered.
“Our team was not aware of the scope of this and we were not informed of the amount of money that was lost,” Linton said.
“I have been advised by my team that the funds were closed down in the middle of June.”
Linton, who also oversees OPRSC’s pension plans in New Brunswick, said he did not want to comment on the situation in Ontario.
“There is a lot of emotion that surrounds this and a lot that we’re trying to get our heads around,” Lister said.
OPRSS said in a statement on Wednesday it is “fully cooperating with authorities and intends to fully cooperate with their investigation.”
OPR and its CEO David Lister in June.
(Facebook) The Oprses fund was founded in 1985 by Canadian businessman William K. Satterwhite, who is also a member of Canada’s Liberal Party.
According to the release, the funds management team received a “full and full accounting” of the fund’s financial condition in early July, and “the auditor found no evidence of a systematic breach of trust.”
Lister’s statement said the fund “is not aware” of any criminal activity.
He added that the Oprss fund’s CEO, Mr. William Linton “is fully cooperating with law enforcement and is cooperating fully with the investigations.”
In a news conference Tuesday, Ontario Premier Kathleen Wynne said the province is working with OPR to determine how it will respond to the scheme.
Wynne added that she expects the Ophors management team will “take steps to ensure that the money that is being used for pensions will be properly repaid to the pensioners.”
She also expressed support for OprS’ efforts to improve pensions in the province.
“This is something that has a real impact on a lot more Ontarians than just one or two,” Wynne said.