Canadian Pensions Both Worried, Proud | Chief Investment Officer

A new poll shows that, while Canadian pension plan sponsors are worried about meeting their liabilities, they still are confident that the national retirement system is better equipped to handle future challenges than the rest of the world.

(November 25, 2009) – Canadian plan sponsors are worried about the future of the defined benefit retirement system but, curiously, also have faith that the True North’s pension system is more robust than other countries.

According to a recent RBC Dexia poll, 89% of Canadian defined benefit (DB) pension plan sponsors are average or poorly positioned to meet their liabilities. The two largest concerns for those polled were investment risk—with 41% listing this as their major qualm—and insufficient returns (36%). Following these, interest rate risks were the primary concerns of 13% polled, while just 8% cited operational risk.

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When asked about future challenges, 48% cited aligning assets with liabilities as their greatest, followed closely by investment returns (38%). Just 7% cited accounting variations as their largest challenge for 2010, while 4% claimed that understanding novel financial instruments was likely to be the largest impediment in the new year.

However, despite turmoil and worries, 72% of Canadian pension plans still think of themselves as equal to or better than the global pension system; only 8% saw themselves as inferior to their global peers.

Pension reform is likely to be a prominent topic when Conservative Finance Minister Jim Flaherty meets with his provincial counterparts in December.

The pool included responses from 370 Canadian pension plans, with 18% controlling assets of more than $1 billion. The poll is available for download here .

To contact the <em>aiCIO</em> editor of this story: Kristopher McDaniel at <a href='mailto:kmcdaniel@assetinternational.com'>kmcdaniel@assetinternational.com</a>

A group of investors that includes CalPERS, CalSTRS, bcIMC, and others has petitioned the SEC in hopes of requiring companies to disclose balance-sheet risk relating to climate change.

(November 25, 2009) – An international group of institutional investors representing more than $1 trillion in assets is calling on the Securities and Exchange Commission (SEC) to increase transparency on climate-related risks.

The group of asset owners—which includes representatives of the California Public Employees Retirement System (CalPERS), the New York State Common Retirement Fund, and Canada’s British Columbia Investment Management Corporation—has signed a petition that is demanding the SEC require that companies disclose balance sheet risks stemming from climate change. Ceres, an environmental investment group, has organized the petition, according to Reuters.

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Under current regulations, companies are required to inform potential and current investors of any information that might influence the purchase or sale of the company’s stock. This often includes regulatory and currency risk, but does not include climate risks such as emissions. “The SEC should strengthen and enforce its current requirements so investors’ decisions fully account for climate change’s financial effects,” signatory Anne Stausboll, CalPERS CEO, said in a statement, according to Reuters.

This is not the first such petition filed by the group. In 2007, a similar petition was sent to—and rejected by—the administration of former President George W. Bush. While the Obama administration is admittedly more predisposed to such actions, the SEC has yet to make any comment on the petition.

To contact the <em>aiCIO</em> editor of this story: Kristopher McDaniel at <a href='mailto:kmcdaniel@assetinternational.com'>kmcdaniel@assetinternational.com</a>