Ontario Teachers’ Pension Plan
What are the big funds doing about investments during the pandemic?September 24, 2020
The pension industry has a big footprint.
With the top 300 pension funds around the world managing an eye-popping $19.5 trillion (U.S.) in assets – and with quite a few of those funds being Canadian-based – Save with SPP decided to take a look around to see what our own country’s pension leaders are saying about investment markets.
With $409.6 billion in assets, the Canada Pension Plan Investment Board (CPPIB) is the nation’s largest pension fund. CPPIB has identified four sectors of the economy it thinks will grow in the near future – e-commerce, healthcare, logistics (aka shipping/receiving) and urban infrastructure.
CPPIB expects “massive changes” in those areas, CPPIB’s Leon Pederson tells Tech Crunch. And while CPPIB invests for the long-term, the four areas identified by their research might “indicate where the firm sees certain industries going, but it’s also a sign of where CPPIB might commit some investment capital,” the magazine reports.
The $205-billion Ontario Teachers’ Pension Plan (OTPP) saw small losses in the first half of 2020, reports Bloomberg.
“Some of our hardest hit investments were among our private assets. Heavily-impacted segments were leisure and travel, including our five airports, and assets where consumer spending declined, which is our shopping malls and Cadillac Fairview,” OTPP’s CEO, Jo Taylor, states in the article.
However, losses were cushioned by the plan’s strong fixed-income returns, the article notes – in all, $7.9 million in income from its bond portfolio helped OTPP limit losses.
The $94.1 billion Healthcare of Ontario Pension Plan’s (HOPP) CEO, Jeff Wendling, recently told Benefits Canada that the plan is considering looking at some new investment categories as it pursues its “liability driven investing” strategy. With a liability driven investing strategy, the investment target is not beating stock market indexes, but ensuring there is always enough money to cover every current and future dollar owed to pensioners.
“We’re very focused on liabilities, but what you do when interest rates are at really extreme lows, in our view, is different than what we did in the past,” he states in the article. HOOPP, he adds, is now looking at infrastructure investing, insurance-linked securities, and increased equity exposure to generate income traditionally provided by bonds.
Large pension plans like CPPIB, OTPP and HOOPP have enjoyed a lot of success over the years. The takeaway for the average investor is that the large scale of these plans allow them to do things the average person can’t – like directly owning businesses (private equity), or shopping centres and offices (real estate) in addition to traditional stock and fixed-income investments. The big guys are taking advantage of diversification in their holdings, and so perhaps should we all.
Individuals and workplaces can leverage the investment expertise of the Saskatchewan Pension Plan. Its Balanced Fund is invested in Canadian, U.S. and international equities, bonds, mortgages, and real estate, infrastructure and short-term investments. And the fund has averaged an eight* per cent rate of return since its inception in the mid-1980s. Check them out today.
*Past performance does not guarantee future results.
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Written by Martin Biefer
Martin Biefer is Senior Pension Writer at Avery & Kerr Communications in Nepean, Ontario. A veteran reporter, editor and pension communicator, he’s now a freelancer. Interests include golf, line dancing and classic rock, and playing guitar. Got a story idea? Let Martin know via LinkedIn.
Jun 24: Best from the blogosphereJune 24, 2019
A look at the best of the Internet, from an SPP point of view
Be sure you don’t miss out on pension benefits from long-ago work
When this writer was a young reporter in the 1980s, it seemed that moving to a new job took place every year or two. It’s quite common, in fact, for people to have many different jobs over the course of their careers.
So it’s not that surprising that some of these folks had pension or retirement savings through their old employers that they’ve forgotten about – and that unclaimed pension money is still there, looking for them.
A recent report in Benefits Canada took a look at the size of this problem. While no one knows exactly how much unclaimed pension money is out there, “the federal government says the number could be rising with people switching jobs more often, qualifying for plans faster, retiring abroad more often and not updating their mailing address because of increased reliance on online accounts,” the magazine reports.
The Ontario Teachers’ Pension Plan, for instance, “has about 30,500 members it can’t locate,” the article says. In the UK, an estimated $682 million in unclaimed pension money is piling up in various accounts, hoping to be reunited with its owners.
When the various plans can’t reach members, they’ll try tracking them down “through Equifax, search firms, and the Canada Revenue Agency,” the story notes. Unfortunately, there are so many fake CRA calls out there now that many people don’t respond, believing it all to be a scam, the article adds.
So what should you do if you think you might have had benefits in a retirement plan of a long-ago employer?
The article recommends that you “call up the human resources or pension administrator at the old company. If the company has been taken over, gone bankrupt or is otherwise hard to find, (you) can try getting in touch with the provincial regulator.”
If you think you may be missing out on benefits from long ago, it’s a good idea to make that call.
Take a tip and help your retirement
The Retire Happy blog offers some great tips to help you plan for retirement.
First, the blog notes, “take care of your health and make fitness a priority.” As well, “prepare for the retirement process by having a good idea, in advance, of what your income will be as well as your expenses,” the blog advises. The idea here is to have no surprises.
A third great bit of advice that many retirees wish they had taken is to “pay off debts while you are still working.” The blog notes that a surprising 59 per cent of retirees are in debt, and “for 19 per cent, that debt has grown in the last year.” The blog advises “laying off the credit cards” before retirement and remembering that in nearly every case, your retirement income will be less – not more – than what you were making at work.
Save with SPP has an additional tip to add to these excellent suggestions, and that is this – start saving early. The earlier you start saving for retirement, the more you’ll have when work is a fading memory. You can start small and grow your contributions to savings when you get a raise or a bonus. A terrific tool for your retirement savings program is the Saskatchewan Pension Plan; be sure to check them out today.
|Written by Martin Biefer
|Martin Biefer is Senior Pension Writer at Avery & Kerr Communications in Nepean, Ontario. A veteran reporter, editor and pension communicator, he’s now a freelancer. Interests include golf, line dancing, classic rock, and darts. You can follow him on Twitter – his handle is @AveryKerr22|