The Canadian Union of Public Employees (CUPE) is suing the Ontario Municipal Employees Retirement System (OMERS) and three of its managers for $60 million, alleging the three were “unjustly enriched at the expense of pension plan members.”

CUPE said the OMERS pension plan outsourced management of its real estate assets to Borealis Capital. Borealis, according to CUPE, paid OMERS an “undervalued” fee of $11 million and hired OMERS employees to do the work.

The union’s statement of claim alleges that OMERS then “repatriated” the management of those assets and in the process paid Borealis and the three managers $50 million for the “return of its own assets.”

CUPE said the three managers failed to disclose to the OMERS board that the costs of the Borealis agreement were “well above market rates.”

OMERS denied that it or the three managers behaved improperly and said it would defend itself “vigorously” against the lawsuit.

“It is unfortunate and truly regrettable, that despite numerous occasions where [CUPE Ontario president Sid] Ryan has been advised of all available facts, he continues to put forward allegations that are simply not reflective of the truth,” said OMERS board chair Frederick Biro in a statement.

“OMERS will be standing fully behind its three managers and its employees and will be defending itself vigorously against this claim,” he said.

OMERS provides retirement benefits to 355,000 active and retired municipal, school board, police and fire employees in Ontario. CUPE represents about 44% of them.