A lot of questions surround Ontario's plans to create a supplemental pension fund to the Canada Pension Plan, not the least of which is who will manage plan assets that could potentially reach as much as C$80 billion (US$74.7 billion).
Among the potential options for the plan promoted by Ontario Premier Kathleen Wynne and Finance Minister Charles Sousa include: hiring third-party managers to run the plan assets; create an in-house money management business similar to what runs the assets for the C$192.8 billion CPP; or outsource money management to one of Ontario's defined benefit plans with existing in-house money management capabilities, like the C$129.5 billion Ontario Teachers Pension Plan or the C$60.9 billion Ontario Municipal Employees Retirement System, both of Toronto.
“Determining who would get this business will create some interesting dynamics in the market,” said Paul Forestell, senior partner, market retirement leader for Canada and a member of the Canadian leadership team at Mercer LLC, Toronto.
The decisions about who would manage the assets are going to be influenced by what kind of plan eventually is created: a traditional DB plan modeled after the existing public pension giants in Canada or other options under consideration, chiefly a defined contribution plan modeled after the U.K.'s £42 million ($69 million) National Employment Savings Trust, London.
The supplemental plan for Canada's most populous province could be sizable. While sources wouldn't specify how much in assets could ultimately be in the plan, they said it could reach as high as Ontario's current share of the CPP — estimated around C$80 billion.
Ms. Wynne and Mr. Sousa are following through on their earlier pledge to create a provincial plan supplemental to the Canada Pension Plan, Ottawa, after provincial finance ministers, Canada Finance Minister Jim Flaherty and Kevin Sorenson, Canadian minister of state-finance, couldn't agree on a national plan that was proposed by Wes Sheridan, Prince Edward Island finance minister, and backed by Mr. Sousa. Scott Blodgett, spokesman for the Ontario finance ministry, said provincial officials continue to work on the supplemental plan proposal.