Michael Nobrega, CEO of the C$44 billion (US$35.6 billion) Ontario Municipal Employees Retirement System, Toronto, is calling on the Canadian government to merge smaller Canadian public pension funds in an effort to create sustainability among the countrys retirement systems because small and medium-sized funds lack the infrastructure, resources and expertise to undertake broadly based portfolio diversification on their own.
An important advantage of a superfund and the key to sustainability for all of us is to actively manage pension assets, Mr. Nobrega said today in an address to the Conference Board of Canada. The speech was posted on OMERS website.
The days of passive investing of leaving investment decisions to fee-motivated outsiders must come to an end. Superfunds can help smaller plans to achieve sustainability by striking a better balance between volatile public market investments and more stable private market investments.
He said such a consolidation also would help Ontarios provincial government introduce legislation that would make pension coverage mandatory for all workers.
Mr. Nobrega said the proposal stems from a recommendation by the Ontario Expert Commission on Pensions.