AGENDA TORONTO CENTRE REGIONAL PROGRAM FOR PENSION SUPERVISORS: Developing Practical Approaches to Risk Based Supervision

NOVEMBER 9 TO NOVEMBER 14, 2014MAURITIUS

About the Program

Program Funded By:

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The program is designed as a course on a risk focused approach to pension supervision. Within the framework of a risk based supervisory approach, case studies and vignettes will be used to identify the chronology of problem evolution, identification of risks and fraud:

It includes a session on quantitative assessment of risk to the application of the risk assessment tools to defined benefit specific and defined contribution activity.

A case study, Trio, will deal with fraudulent handling of investments and provide deeper insights on how to detect fraud or other problems in investment decision-making processes within an asset management company.

There will also be sessions on the factors that drive good investment performance, including discussions on assessment of portfolio efficiency, benchmarks set for investment funds and the approaches used in foreign securities markets to supervise asset managers.

Practical experiences will be shared and lessons drawn in terms of identifying and resolving problem situations of pension entities under stress.

Key to effective supervision is ability to act quickly and resolutely. To act effectively requires a clear understanding of stakeholder interests, the ability to convey clearly your intentions and consequences – and the structure of the supervisory agency, and authority to act.

Throughout the program participants will work on resolution strategies for self-identified challenges they face and need to address once back at their home organisations.

All participants will take part in a full-day pension crisis simulation exercise – designed to drive home the challenges of working in a ‘real time’ environment – facing the demands of differing stakeholders while adapting to changing financial and operating stresses.

As with all Toronto Centre Leadership programs, case studies are instrumental to our learning experience, drawing upon the experiences of our experienced program leaders and the participants joining us from around the world.

The program will be highly interactive and practical, using case studies, a simulation, group discussions, and breakout sessions to foster debate and effectively transfer knowledge from presenters and amongst participants.

To ensure lessons learned can be readily applied, each participant will prepare an action plan during the program. This action plan maps out a strategy for addressing a real problem the participant faces at his/her home agency, and outlines how to convince stakeholders of the importance of implementing the necessary changes. Each action plan will benefit from input and feedback from our experienced program leaders.

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Objectives

Upon completion of the five-day program participants will better understand:

The importance of early intervention and how this can lead to a stronger supervisory authority, enhanced public confidence, and greater financial stability

Why risk based supervision is an effective and necessary tool for supervisors How to deal with problem entities effectively The essential contributions of governance and risk management The use of quantitative tools to assess risk What drives good investment performance and efficiency and how to assess it

Who should attend?

The program is designed for mid-to-senior level staff involved in regulatory and supervisory activities at pension supervisory authorities. Participants should have at least three years working experience in the financial sector or its supervision.

Prerequisites:

Participants will be expected to complete pre-course reading that should take approximately four to hours. In addition, participants will be required to identify a key challenge they face at their home agency. Throughout the program, participants will work on an action plan to address this challenge: additional details on action planning will be sent to participants, once accepted to the program.

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SUNDAY, NOVEMBER 9Briefing and networking tour

18:00 Ice breaker and welcome cocktail

MONDAY, NOVEMBER 10 08:30 Welcome and opening remarks

Dane Hussain, Facilitator

09:00 Session 1: Context for changeMichael Hafeman, Chair, Toronto Centre Insurance and Pensions AdvisoryBoard, and former Assistant Superintendent, OSFI, CanadaThis session will provide an overview of current issues which will impact the work of pension supervisors and regulators.

10:15 BREAK AND GROUP PHOTO

10:30 Session 2: Effective communications and management of stakeholdersLuc Cardinal, Program Director, Toronto CentreA session on the approach for persuading stakeholders to support your actionplans:

Analyze stakeholders – who they are, what they like and dislike about yourproposal, and what is needed to get their support and overcome resistance

Four box model for effective persuasion and communication.

11:45 Session 3: Corporate governanceS.G. Venkatramani, Consultant

Basic principles relating to general purpose corporations, shareholder rights, minority protection and disclosure

How to assess corporate governance Issues specifically relating to the governance of pension plans How to deal with governance issues and problems

13:00 LUNCH

14:00 Corporate governance (cont’d)

15:00 BREAK

15:15 Session 4: Action planningLuc CardinalParticipants will learn about a framework for tackling challenges faced at work.

Assess the challenge confronting you with options to consider Outline a plan, analyze stakeholders, and project implementation

17:00 Action planningParticipants will start applying the action planning methodology with the assistance of program leaders. The first day will focus on understanding the situation and the development of a precise definition of the problems/challenges identified by the participants.

17:30 END OF DAY

TUESDAY, NOVEMBER 1108:30 Ideas I Will Use

08:45 Session 5: Case study: The Wonderwall Pension FundJohn Ashcroft, independent consultant, former senior official in the UK PensionsRegulator, and former President of the International Organization of PensionSupervisorsThis case study will explore:

Challenges in moving from a rules-based approach to a risk based approach Investment management control and governance considerations Conflict of interest considerations Addressing challenges to the expertise and competencies of the supervisory

agency

10:15 BREAK

10:30 Case Study: The Wonderwall Pension Fund (cont’d)

12:30 LUNCH

13:30 Session 6: Case study: Trio Capital S.G. VenkatramaniThe case study deals with fraudulent handling of investments. It highlights the need for strengthening the functioning of boards, meeting expectation gaps, early intervention and exemplary punishment. It will examine:

Issues in the system design Gaps between expectations and legal reality Poor coordination between regulatory and enforcement agencies

15:00 BREAK15:15 Case study: Trio Capital (cont’d)

17:00 Action planningParticipants will continue working on their individual action plans with the assistance of program leaders. In this session, they should be working on setting the goal and the outline of the plan.

17:30 END OF DAY

WEDNESDAY, NOVEMBER 12 08:30 Ideas I Will Use

08:45 Session 7: Quantitative assessment of riskMichael Hafeman

The role of quantitative assessment Quantitative regulatory requirements Quantitative risk assessment tools Application of risk assessment tools to defined benefits specific and defined

contributions activity

10:15 BREAK

10:30 Quantitative assessment of risk (cont’d)

12:30 LUNCH

13:30 Session 8: Factors that drive good investment performance and efficiencyJohn Ashcroft

What drives good investment performance and efficiency? How to assess results: comparison of actual performance with benchmarks

set for the investment funds and whether investments are justified Issues on assessments, including investments of defined contributions funds Some country experiences

15:00 BREAK

15:15 Factors that drive good investment performance and efficiency (cont’d)17:00 Action planning

Participants will continue to work on their action plan. On this session participant should finish the details of the plan to address the challenge and/or problem identified, analyze stakeholders and define the communication strategy to gain their support.

17:30 END OF DAY

THURSDAY, NOVEMBER 1308:30 Session 9: Crisis simulation exercise

Michael Hafeman and program leaders as role playersParticipants will learn from the simulation exercise how to manage institutions and the importance of inter-agency cooperation in managing crisis situations.

10:15 BREAK

10:30 Crisis simulation exercise (cont’d)

12:30 LUNCH

13:30 Crisis simulation exercise (cont’d)

15:30 BREAK

15:45 Crisis simulation exercise (cont’d) – debrief Lessons from the simulation

17:00 Individual action planParticipants will finalize their action plan material for presentations on Friday

17:30 END OF DAY

19:30 Farewell dinner

FRIDAY, NOVEMBER 1408:30 Ideas I will use

08:45 Session 10: Action plan presentations by participantsParticipants will present their action plans, with feedback from program leaders and fellow participants

10:30 BREAK

10:45 Session 11: Panel discussion Michael Hafeman, John Ashcroft and S.G. VenkatramaniProgram leaders to share, where needed, relevant country experiences on issues raised by participants

12:30 Closing ceremonyConcluding remarksPresentation of certificates

13:30 LUNCH