AGENDA
TORONTO CENTRE REGIONAL PROGRAM FOR
PENSION SUPERVISORS:
Developing Practical Approaches to Risk Based Supervision
NOVEMBER 9 TO NOVEMBER 14, 2014
MAURITIUS
Program Funded By:
About
the Program
1
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:
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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.
2
Objectives
Upon completion of the five-day program participants will better understand:
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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.
3
SUNDAY, NOVEMBER 9
Briefing 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 change
Michael Hafeman, Chair, Toronto Centre Insurance and Pensions Advisory
Board, and former Assistant Superintendent, OSFI, Canada
This 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 stakeholders
Luc Cardinal, Program Director, Toronto Centre
A session on the approach for persuading stakeholders to support your action
plans:
 Analyze stakeholders – who they are, what they like and dislike about your
proposal, and what is needed to get their support and overcome resistance
 Four box model for effective persuasion and communication.
11:45
Session 3: Corporate governance
S.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 planning
Luc Cardinal
Participants 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 planning
Participants 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 11
08:30
Ideas I Will Use
08:45
Session 5: Case study: The Wonderwall Pension Fund
John Ashcroft, independent consultant, former senior official in the UK Pensions
Regulator, and former President of the International Organization of Pension
Supervisors
This 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. Venkatramani
The 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
15:15
BREAK
Case study: Trio Capital (cont’d)
17:00
Action planning
Participants 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 risk
Michael 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 efficiency
John 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
17:00
Factors that drive good investment performance and efficiency (cont’d)
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 13
08:30
Session 9: Crisis simulation exercise
Michael Hafeman and program leaders as role players
Participants 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 plan
Participants will finalize their action plan material for presentations on Friday
17:30
END OF DAY
19:30
Farewell dinner
FRIDAY, NOVEMBER 14
08:30
Ideas I will use
08:45
Session 10: Action plan presentations by participants
Participants 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. Venkatramani
Program leaders to share, where needed, relevant country experiences on issues
raised by participants
12:30
Closing ceremony
Concluding remarks
Presentation of certificates
13:30
LUNCH