Canada鈥檚 big pension funds hold lessons for funds elsewhere
Canada鈥檚 big pension funds are the envy of fund managers in other countries. They鈥檙e something that the UK鈥檚 defined contribution plance could aspire to, writes Padraig Floyd in Pensions Expert. 鈥淭hey鈥檙e all public, but they鈥檙e run like private sector corporations,鈥� said Prof. Sebastien Betermier.
Buy Canadian movement shouldn鈥檛 interfere with prudent pension fund management
The Trump administration鈥檚 tariffs have catalyzed a cross-country movement to buy Canadian products. But will that movement affect the how Canada鈥檚 big pension funds manage their portfolios? The eight largest pension plans in Canada hold more than $2 trillion in assets, but only about a quarter of those assets are Canadian.
The debate over domestic investment for Canadian pension funds
As calls to bolster Canada鈥檚 economy intensify, the debate over pension fund strategies has gained national attention. In a Financial Post article, Professor Betermier highlights concerns over political interference in pension management and the potential long-term impact on investment strategies.
Professor Betermier offers guidance for Quebec investors
With increasing market volatility, Professor Sebastien Betermier shares his advice on how Quebec investors can weather economic uncertainty. In an interview with the Motnreal Gazette, he emphasizes the importance of staying disciplined, avoiding panic and hasty decisions, and consulting a financial planner before making changes.
Large number of Canadians are missing out on pensions
According to a report by the National Insitute on Ageing, there are around 200,000 people in Canada with registered pension plans who are eligible to claim them, but haven鈥檛. Often, the unclaimed funds stem from contributions made early in a person鈥檚 career that were simply forgotten about.
Political pressure impacts Canada's top pension funds
Canada鈥檚 Maple 8 pension funds are globally respected for strong returns and independence from government influence. However, recent political moves threaten this model. The federal government has encouraged more domestic investment, while Alberta鈥檚 government fired AIMCo鈥檚 board, raising fears of political interference.
Financial institutions shift climate strategies amid GFANZ changes
Despite BlackRock鈥檚 exit from the Glasgow Financial Alliance for Net Zero (GFANZ), climate action remains a key priority for financial institutions, says Sebastien Betermier, Associate Professor of Finance. He notes that asset managers are shifting their strategies to focus on helping firms transition to net zero rather than maintaining strictly net-zero portfolios.
Alberta-commissioned report on CPP withdrawal used flawed methodologies
When Alberta commissioned a report on withdrawing from the Canada Pension Plan, the resulting document claimed the province was entitled to $334 billion more than half of the plan鈥檚 total assets. However, the method used to calculate that share is deeply flawed. If applied to other provinces, the combined total of their share would exceed the plan鈥檚 actual assets.
Challenges of adapting Canada鈥檚 pension model for the UK
In a Financial Times piece on the UK鈥檚 interest in replicating Canada鈥檚 pension system, Associate Professor Sebastien Betermier highlights concerns about the growing politicization of Canada鈥檚 pension funds. He notes that the success of the Maple 8 model relies on maintaining independence from government interference.
Making strategic assets available to pension funds would encourage more domestic investment
Canadian pension funds have a mandate to deliver steady pension payments to millions of plan members, writes Professor Sebastien Betermier in Benefits Canada. But that鈥檚 easier said than done, and the most cost-efficient way to deliver is by investing in a globally diversified portfolio tilted toward strategic assets.
Instability at Alberta鈥檚 public pension fund could undermine its effectiveness
While 2020 was tough on just about everyone, the Alberta Investment Management Corporation (AIMCo) really took it on the chin. Alberta鈥檚 public pension fund manager lost billions of dollars in a volatility-based trading strategy during a topsy-turvy year in markets.
Canadian pension funds are already overweight on Canadian equities
Canada鈥檚 eight largest pension funds are big players in the world of institutional investing with more than $1 trillion under management collectively. Pressure is being applied for the funds to invest a greater proportion of their money in Canadian stocks.
Changes in pension funds portfolio management produce different demands for analysts and managers
Historically, pension funds managed their portfolios using a strategic asset allocation approach. Fundamentally, this meant buying a mix of asset classes with the highest probability of achieving the necessary returns, at a level of risk that was acceptable 鈥� or buying and holding. But since the mid-2000s, some large pension funds have adopted a total portfolio approach strategy, which seeks to maximize returns while keeping a portfolio鈥檚 volatility low.
A lack of strategic assets can be a deterrent to domestic investment for large pension funds
In 2023, the Government of Australia suggested that some of the country鈥檚 pension assets might be used to fund social housing or renewable energy. The idea received mixed reception, and to understand why, Lachlan Maddock of Investor Strategy News looked to Canada, where a group of business leaders called for pension funds to increase their holdings of Canadian equities.
