OMERS Disability Administration Review OMHRA Fall Conference Celine Chiovitti, VP, Pension Operations September 14, 2017

Review of OMERS disability benefits administration Feedback to us indicated: Leading to a Review: Feedback Our process and communications are complicated Process requires more rigor Employers control the timing of application Generally more guidance on complex cases (rehabilitation, modified work programs) Objectives of our Review Simplify the experience Strengthen guidance and training Streamline workflows Incorporate Best Practices This review only addressed considerations and approaches to improve the administration process and did not deal with Plan design issues

Two types of OMERS disability benefits that members can apply for… Disability Waiver of Contributions Disability Pension Credited service accrual without contributions (member and employer) Unreduced immediate pension for life (upon member’s election) Both types of disability benefits require medical evidence to support the application.

The application for disability benefits consists of many steps Employer OMERS Member OMERS Doctor OMERS Sends benefit request forms and/or required information to OMERS Processes the request and sends forms and instructions to member Returns completed medical documents to OMERS Reviews medical information and provides medical opinion Approves/declines the disability benefit and/or rehab program and informs the member of the decision The initial application is only approved when the information from all parties is complete. A waiver or disability pension can be processed retroactively.

Disability Waiver statistics and trends Waived contributions (both sides) Approximately $77 Million/year The number of members on Waiver (2%-3% of active membership) has remained stable and in line with total active membership growth

Disability Pension statistics and trends 95% of disability pensioners are age 55+ The number of members on disability pension has been decreasing slightly over the past five years

We consulted broadly during our review… Internal Consultations Employer Consultations Member Consultations Union/ Association Consultations Peer Practice Review Future State Recommendations Historical Reviews Communications Review

Summary of what we heard… All stakeholders said that our communications are confusing, our process is complex and our current approach allows for too much discretion. Members/Member Associations Employers Internal Concerns Enforce a consistent application approach for members More communication with members Simplify language Member election Provide a consistent administration guideline More tools to address complex cases and rehabilitation. More rigorous reviews and follow-ups Automate and simplify process (self-service, enhance e-access, less paper and forms) Potential for inconsistent practices Need to simplify communications Need enhanced internal skills and support Roadmap to automate processes Consulted peer plans: HOOPP deals direct with members, OTPP aligns with LTD, OPT outsources administration

We will be making changes to our Disability Administration Process in four distinct areas Communication Employer Support Simpler communications in general. Reduce the number of letters and forms. Follow up with members who do not respond. Customize approach to deal with complex cases. Enhance responsiveness and automate when possible. Provide clear employer guidelines and require all employers to inform OMERS of member’s absence prior to 5th month. System Medical Reviews Improve processes through OASYS Phase 1 and 2. Enhance self service functionality and secure portal. Allow Employers to upload and pull reports on portal. Create standard operating procedures and guidelines for physicians. Better define staff role versus physician’s role. Create ‘Disability Claims Manager’ Role

Two key changes to note… Application Process to be started before the 5th month of absence If a member will be absent from work due to illness or injury that is expected to go beyond 4 months, employers must notify OMERS by the 4th month of absence Create New Internal Role ‘Disability Claims Manager’ This role will oversee the disability administration process including the medical doctors OMERS will send an application form to the member If approved by OMERS, employers will be informed of the date of approval and must stop member and employer contributions. Oversee the development of procedures and guidelines for medical doctors Work with employers on complex cases including modified work, rehabilitation, return to work protocols. Application: Current Plan provisions and administration: A member who is considered totally disabled accrues credited service from the later of first day of the fifth calendar month following the month in which the member is considered to be totally disabled OR the day the member ceases to make contributions Our Employer Administration Manual provides employers with discretion in whether to continue making contributions, while requiring a consistent practice within an employer. The majority of our employers provide the application by the fourth month of absence, while others only submit it after the member receives less than 100% income replacement, or exhausts all sick credits The Problem with the current approach: In the absence of clear guidelines and monitoring from OMERS there are inconsistencies within and between employers resulting in disputes Without a standard approach, it is difficult for OMERS to ensure employers are complying with the Plan text and providing consistent treatment for all members The Recommended Approach: Simplify the administration of this provision by requiring all Employers to notify OMERS once a member has been absent from work beyond four months Disability Claims Manager Current Approach: Pension Operations has two medical doctors working on a part-time basis to adjudicate all claims (approx. 9,000/year) with little support and capacity to follow up nature of disabilities and associated legislation (e.g. WSIB) is changing and we need additional in-house expertise to respond to the changing landscape Disability Claims Manager role with a nursing/medical background to better support the process We will communicate changes over the remainder of the year and will fully implement by June 2018.

Examples of other changes to be fully implemented within 36 months Themes Activities Simplify forms and letters (Medical Review Form, Employer Admin Manual) Create new letters for members who are making an election between waiver and/or continued sick leave Notify employer when a member is applying for a disability pension Communication (0-12 months) Focused employer training on rehab periods and other complex situations Establish guidelines and clearer direction Enable direct channel for employers to contact disability team on complex cases Employer Support (6-12 months) Medical Reviews (6-12 months) Create procedures for the review process (initial and definition change) Define Physician role versus staff role and create capacity System (24-36 months) Allow employers to report an event through e-channels Develop secure tool to share and receive information Expand self-service functionality, reduce paper and forms 11

Our go-forward approach Targeted approach to strengthen our disability administration process and improve satisfaction with members and employers. 3. Medical Reviews 1. Communication 2. Employer Support 4. System FAQs Plain language Clear direction One consistent approach Customized employer support Dedicated Claims Manager Streamlined reviews LEAP / OASYS Self-service Digital tools 0-12 months 6-12 months 6-12 months 24-36 months