Boston Consulting Group study reveals strengths of Canada's public pension funds
Canada's 10 largest public pension funds represent one of the strongest retirement systems in the world and contribute significantly to the country's economy and prosperity, according to a new study commissioned by the plans and conducted by Boston Consulting Group.
The plans represent 35% of all Canadian retirement assets and 80% of public pension assets. Net assets of the plans increased by more than 100% from 2003 to 2011, to C$714 million (US$697 million) from C$350 million. Recent reporting periods indicate the combined assets are now around C$775 million, according to the study.
“The most impressive statistic is the increase in assets from 2003 to 2011 … and the majority is from investment returns,” said Michael Block, Toronto project leader at the Boston Consulting Group, in an interview.
Over that period, investment returns made up C$240 billion of the increase, while contributions accounted for C$125 billion.
About 80% of the combined assets of the 10 are managed internally; the average cost of managing assets for the plans is 0.3%, comparable to passive index ETFs.
The 10 plans have gained much attention in recent years for their direct global investments, but also have invested about C$400 billion in Canada, including C$100 billion combined in real estate, infrastructure and private equity. Four of them rank among the top 20 global investors each in commercial real estate and infrastructure.
The 10 systems, overseeing pension assets ranging from C$14 billion to C$162 billion, are the Canada Pension Plan Investment Board, Caisse de Depot et Placement du Quebec, Ontario Teachers' Pension Plan, British Columbia Investment Management Corp., Public Sector Pension Investment Board, Ontario Municipal Employees Retirement System, Healthcare of Ontario Pension Plan, Alberta Investment Management Corp., Ontario Pension Board and OPSEU Pension Trust.