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New edition of Communiqué Newsletter Out Now: Feature Interview with Peter Waite
The Spring 2024 edition is filled with insights into PIAC's leadership and members through a series of fun and informative interviews. As Peter Waite, CAE Waite prepares to step down during the 2024 Spring Investment Conference AGM after 20 years, a group of six prominent PIAC members look back at his time at the helm in this warm and candid round-table interview. Communiqué Chair Theva Naidoo caught up with Simon Frechet, a PIAC Honourary Member who recently retired after 17 years at Bruce Power and asked him to share insights, experiences, advice, and outlook for the future. Janet Julé, CIO at SHEPP is featured in our quarterly Member Profile. The issue's lead story is a thought-provoking lead article on global trade by MFS, followed by a recent Quick Poll of the Top 2024 risks identified by members.
Click HERE to read the full newsletter.
Celebrating PIAC's 150+ Volunteers: National Volunteer Week April 14 - 20
During National Volunteer Week, 14 - 20, 2024, we celebrate more than 150 members who volunteer with PIAC – the time, talent and energy they share to strengthen our pension community is incredible. From coast to coast, volunteering in PIAC reinforces our ability to grow, thrive, and create change and impacts our country’s overall wellness - now and for future generations. Thank you to all our Volunteers! We simply could not complete this work without your support. Interested in becoming a volunteer? PIAC has over a dozen committees and working groups that are looking for volunteers. From ESG and Risk to Tax, Alternatives and Fixed Income, there is a committee for every area of specialization within the pension sector. You can also get involved in planning conferences, developing the newsletter content or contributing to PIAC’s advocacy efforts. Also consider becoming a mentor through our new mentorship program. Every moment you give matters!
Contact dandrews@piacweb.org for more information.
Members Rate Their Top Risks for 2024: PIAC Quick Poll Results
PIAC members were asked to tell us their risk outlooks for 2024. Highlights from the survey include:
- Escalation of Current Armed Conflicts, High Inflation Surprise and US Elections Cited as Top Three Risks for 2024
- Most participants anticipate a moderate slow down (soft landing) scenario for the global market in 2024.
- On average, participants indicated their funds are most prepared for recession risk, and least prepared for extreme climate event risk.
View the summary HERE.
New Member Fund: Insurance Corporation of British Columbia (ICBC) Joins PIAC
Please join us in welcoming ICBC (Insurance Corporation of British Columbia) as a new Member Fund. The fund’s primary member is Marshall Petrie, CPA, Senior Investment Specialist.
Submit Your Questions for a Fireside Chat with Howard Marks - Spring Conference Welcome Dinner and Keynote Presentation
Michelle Peshko Head of Pension Investments at Glencore Canada Corporation, will be sitting down with one of the industry's foremost long-term investing gurus – Howard Marks at the opening night dinner of the Fall 2024 Spring Investment Conference. Howard is known for his strategic perspective and well-researched, straightforward approach to institutional investing over his 40-year career. Howard Marks: Insights www.oaktreecapital.com
Michelle is crowdsourcing questions for the discussion and is asking members to send "your best conversation concepts and questions so we may bring out the best of Howard Marks for PIAC!" Login to piacweb.org member directory for her contact info and email her your suggestions. Directory - Individual Members - PIAC | Pension Investment Association of Canada (piacweb.org)
Click HERE to view the full program and register.
Record Attendance for 2024 Spring Investment Conference
Hotel Sold Out - But Still Time to Register
The PIAC Spring 2024 Investment Conference will be the largest in PIAC's history, with a record number of members registered to attend the three-day event. Developed by members for members, the conference features an exciting lineup of expert-led, thought-provoking sessions showcasing insights and strategies to navigate the evolving pension landscape. With a variety of networking opportunities throughout including a DC plan meet-up and an open house welcome cocktail reception and the free-flowing open mic Exchange discussion, the Spring Conference will help you build community and gain practical take-aways applicable to your daily pension investment activities. At a gala dinner on Thursday night at the Arcadian Court, we will celebrate Peter Waite's exceptional 20 years as PIAC Executive Director as he prepares to step down at the AGM the following morning. Be sure to join in the fun! Registration closes on Friday, April 12. The hotel is fully booked; delegates are responsible for finding their own accommodations.
Click HERE to view the full program and register.
PIAC Job Board: Connect with the Best Possible Candidates from the Most Qualified Pool
The PIAC Job Board is a dedicated platform created exclusively for PIAC member funds. Features include:
- Industry competitive pricing of $300 per month
- Job postings are publicly available on our website, are distributed through our Pension Investment Association of Canada LinkedIn Company Page to over 1,700 followers and their networks, and in our weekly E-newsletter with a targeted reach of more than 1,100 active members.
- The user-friendly interface allows you to post jobs effortlessly and receive applications quickly and easily.
- Gain access to candidates from pension funds of all sizes in all jurisdictions across Canada who are specifically seeking opportunities in the pension sector and understand the nuances of your field.
- Connect with potential candidates with a wide range of responsibilities in areas such as the investment direction of the fund's assets, the administration of the plan or serve in related areas such as actuarial, accounting, communications, corporate governance, legal, responsible investment, risk management, tax, etc.
- Benefit from our established presence and reputation within the industry to attract top talent.
Visit the PIAC Job Board - PIAC | Pension Investment Association of Canada (piacweb.org) or contact Don Andrews dandrews@piacweb.org for further information. If you are not directly in charge of the hiring process, please forward this message to your HR team.
The Canadian Pension Model: An Expat's Perspective - Spring Conference Feature Presentation
A full day of programming at the PIAC Spring Investment Conference April 17 – 19 will kick off with a panel of Canadian expats who will share their views on the pension landscape and the value proposition of the Canadian Pension Model - from a perspective gained through their international work. Arthur Guimaraes, Chief Data and Operating Officer and co-head of Real Estate at University of California Investments and Donald Raymond, Chief Investment Strategist at the Qatar Investment Authority will explore best-in-class ideas on home country overweighting, the importance of corporate governance and what Canadian plans can learn from our global peers to improve long-term service to plan beneficiaries. The fireside chat discussion will be moderated by Robert Cultraro, Chief Investment Officer at Hydro One Inc.
Click HERE to view the full program and register.
Monitoring Managers: Tools and Approaches - PIAC Member Forum
Join us for a PIAC Member Forum this coming Tuesday, March 26 at 12:00 PM Eastern to discuss various tools and approaches for monitoring managers. Undertaking investments through external investment managers usually commits the investor to a long-term horizon which will involve staying on top of manager issues as well as underlying investments. During the forum, participants will hear about best practices for manager monitoring implemented by four leading PIAC members, Martin Belanger from Western University, Serra Erdogmus from the The Canadian Medical Protective Association, Dan Goguen, from Vestcor,and Graeme Hay from Teachers' Retirement Allowances Fund. Participants will also have an opportunity to share their own approaches with a diverse set of other PIAC members.
Click HERE to register.
Communique Member Profile: Aaron Bennett
Aaron Bennett, CFA, CIO of the University Pension Plan Ontario (UPP) is the subject of a fascinating profile in this issue. The Q&A reviews his professional background, events and achievements that have influenced his career, the launching of a relatively new pension plan and what distinguishes its investment policy, key issues facing the pension sector in Canada and where PIAC can be effective in influencing its future direction. He also provides some excellent Recommended Reads.
Click HERE to read the full newsletter.
De-Risking Using Buy-In Annuities - Spring Conference Feature Presentation
As pension plans see their funded status improve significantly in volatile markets, sponsors are looking to buy-in and buy-out annuities to remove investment, interest rate and longevity risk from their books while securing member benefits. This session with Marco Dickner, Managing Director and Retirement Risk Management Leader, Canada at WTW digs deeper into the annuity marketplace, the investment return comparisons and other criteria used by sponsors to evaluate this method of de-risking their plans.
Click HERE to view the full program and register.
Celebrating Peter Waite - Look for an Entertaining and Informative Interview in the Spring Newsletter
PIAC Past Chairs gathered this week on Zoom for a fun and philosophical conversation reflecting back on Peter Waite’s 20 year tenure as Executive Director of PIAC. The lively discussion focused on the major leaps forward PIAC has made during this time in terms of membership numbers and engagement, advocacy milestones and the growth in the number of committees, depth and breadth of resources and caliber of the events offered to members. A transcript of the interview with Kevin Fahey, (CAAT Pension Plan), Dan Goguen (Vestcor) Graeme Hay, (Teachers' Retirement Allowances Fund) and Honourary PIAC members, Betsy Springer, Lisa Jankov and Gretchen Van Riesen will appear in the upcoming Spring 2024 issue of the Communique newsletter. Peter will step down after providing his 20th address at the PIAC Annual General Meeting during the Spring Investment Conference April 17 – 19 in Toronto.
Target Date Funds: Considerations and Sensitivities - Communique Featured Article
Target date funds can be highly effective solutions for helping DC plan members with the challenge of making optimal investment decisions across their lifecycles. The purpose of this article by Ivor Krol and Joanna Mejza from PH&N Institutional is not to propose an optimal investment solution or detract from existing approaches, but to highlight certain key questions for DC plan sponsors to consider when evaluating TDFs such as What is the intended objective of the retirement savings program for employees? and What is the distribution of the plan population with respect to key parameters that are highly influential on outcomes (no matter the sponsor objectives)? A better understanding of these questions could help plan sponsors find the appropriate TDF for their plan based on objectives, beliefs, and actual plan population characteristics that are not easily discernible when looking at performance across different providers.
Click HERE to read the full newsletter.
Lessons in Managing Reputational Risk - Spring Conference Feature Presentation
Join Robert Field, as he leads a discussion with his colleague Gwen-Ann Chittenden at BCI on the growing interest and reputational considerations that pension funds are facing with their investment portfolios today. Pension plans are having to evolve their communication strategies beyond the traditional focus on member communication in the face of growing advocacy efforts by motivated members and special interest groups and increasing media interest. Recent communication challenges span geopolitical issues, responsible investing considerations, and market-driven and investment-specific events. If not managed well, these communication challenges can quickly escalate to significant governance risks for pension plans. Being proactive and having established processes in advance are just a few lessons to be shared.
Click HERE to view the full program and register.
PIAC Celebrates International Women's Day
At PIAC, we are proud to advocate for fair and equitable/adequate representation of women in pensions. Our advocacy on Governance has promoted the effective disclosure of governance composition to encourage the increased participation of women in positions of pension leadership. We firmly believe that diverse and inclusive leadership is essential for driving innovation, creativity, and sustainable growth. And the representation of women within our organization reflects a commitment to inclusivity and gender diversity. 43% of PIAC membership is comprised of women, and this figure continues to grow. Proudly, for the past two decades, approximately 50% of our Board Chairs have been women. As PIAC marks International Women's Day, we reaffirm our dedication to the promotion of women and gender equality in the pension sector.
Investing in Biodiversity as an Economic Necessity - Communique Featured Article
In the Winter 2024 issue's cover story, Lucian Peppelenbos and Rashila Kerai (Robeco) make the case that preserving biodiversity offers huge investment opportunities, and is becoming a must-have rather than a niche add-on for mainstream sustainable investors. Like climate change, maintaining a status quo will simply lead to huge economic losses in the future, and begin to affect our way of life. We can use the capitalist system to make a positive impact and still make financial returns. But first we must learn to work with nature, and not against it.
Click HERE to read the full newsletter.
Long Term Themes and Asset Allocation - Spring Conference Feature Presentation
Forecasting asset class returns is difficult at best of times. Acceptance that the shifting investment landscape (higher rates, inflation and geopolitical risk) and adapting to a lower carbon world could have implications for many years. Join William da Silva (Aon) and Peter Muldowney (Connor, Clark & Lunn Financial Group (CC&L)) to discuss the implications of such macro themes for forecasting and modelling future returns and risks and how this ultimately is reflected in asset allocator’s strategic asset mix shifts.
Click HERE to view the full program and register.
New Issue of Communique Out Now!
The Winter 2024 Communiqué edition shines a spotlight on the exciting new opportunities provided by investing in biodiversity, which is followed by a thought-provoking article on the Target-Date Fund model. We profile UPP's CIO Aaron Bennett, and celebrate several member milestones - our 1,100th member and our 150th volunteer. You can read about Melania Paraschiv at Ivanhoé Cambridge, the winner of the 2023 Terry Staples Volunteer of the Year Award and nominate one of your colleagues for the 2024 award. The issue also features highlights from the recent Tax Conference in Montreal, new resources and recommended reads for members, recent advocacy submissions, People on the Move and more.
Click HERE to read the full newsletter.
Submission to Finance Canada Regarding the Fall Economic Statement
On February 27th, PIAC responded to several prominent pension policy proposals in the federal government’s Fall Economic Statement: domestic pension fund investment, consultations on the removal of the ‘30 per cent rule,’ increased investment allocation disclosure for large federally-regulated plans and disclosure of crypto-asset risk. PIAC urges the federal government to actively involve Canada’s pension plans in discussions on these policy initiatives as we are keen to contribute our expertise.
Read the full submission HERE.
Manager Monitoring Tools and Approaches - PIAC Member Forum
Undertaking investments through external investment managers usually commit the investor to a long-term horizon which will involve staying on top of manager issues as well as underlying investments. During this forum on Tuesday, March 26 , 2024 at 12:00 - 1:00 PM Eastern, participants will hear about best practices for manager monitoring implemented by four leading PIAC members and have an opportunity to share their own approaches with a diverse set of other PIAC members. Click HERE to register.
What Are Your Top Risks for 2024? - PIAC Quick Pulse Poll
What do you consider the main risks for your plan for the coming year? From escalating global conflicts and severe climate scenarios to inflation and US elections, the Risk Management Committee is asking you to complete a quick poll to gauge the pulse of the pension sector. The survey is only 6 multiple choice questions and will only take a few minutes of your time. We will share the results with those who participate.
Meaningful ESG Reporting for Private Equity - Spring Conference Feature Presentation
The ESG Data Convergence Initiative (EDCI) is an open partnership of private equity stakeholders – today, it has more than 375 GP and LP members – committed to streamlining the private investment industry’s historically fragmented approach to collecting and reporting ESG data. Its mission is to create a critical mass of meaningful, performance-based, and comparable ESG data from private companies. Samantha Hill, Managing Director, Head of Sustainability Integration at CPP Investments | Investissements RPC and Matthew D. Schey, Managing Director, External Affairs & Sustainable Investing, at Institutional Limited Partners Association (ILPA) will discuss the initiative’s origins, objectives, and benefits to industry participants.
Click HERE to view the full program and register.
PIAC Quick Poll on Alternatives to BAs
Are you interested in what your pension colleagues are replacing BA’s with? Take a minute to answer two quick questions in a PIAC Pulse quick poll. Only the survey participants get to see the results. With the cessation of Bankers’ Acceptance issuance, the PIAC Fixed Income Working Group has created a quick member survey on which product(s) they would most likely invest in as an alternative. All responses will be kept confidential. The survey closes February 20, 2024.
PIAC Crosses 1,100th Member mark
Please join us in welcoming Vincent Chang as PIAC’s 1,100th member. In his role as Associate Director, Investment Risk with HOOPP (Healthcare of Ontario Pension Plan), Tianyang (Vincent) Chang, assists in the identification, assessment and monitoring of all risks associated with investments in both public and private markets and contributes to HOOPP’s risk management and oversight processes. He started his career at the Bank of Canada, where he was managing Canada’s foreign reserve portfolio as well as the employees pension plan. Prior to joining HOOPP, Vincent has spent a decade at TD Asset Management as a portfolio manager, managing public and private fixed income portfolios for institutional clients such as pensions and insurance companies.
Submission to Finance Canada regarding Pre-Budget Consultations
On February 9th, PIAC responded to Finance Canada’s 2024 pre-budget consultations. In support of ongoing advocacy efforts, PIAC provided input on five policy and program areas:
• Regulatory Harmonization: Funding Rules & Reform,
• Variable Payment Life Annuities Across Jurisdictions,
• Real Return Bond Issuance,
• The Regulatory Evolution of Bill C-228: The Pension Protection Act, and
• A Canadian Taxonomy for a Sustainable Financial Future.
Read the full submission HERE.
Practical Ways to Use AI in Pensions - PIAC Spring Conference Featured Presentation
Expand your practical knowledge of AI to improve your pension organization and your daily work-life activities in this interactive session. Karina Sidhu, Chief Technology & Data Officer at IMCO will provide an institutional perspective on how to apply AI and technology within the pension organization, as well as highlight the implementation challenges. She will be joined by Aaron Vale, Head of Client Solutions, Private Infrastructure, CBRE and Mai Mavinkurve, Founding Partner, Prosperity Global Services Inc. Attendees will brainstorm ideas on when and how the IMCO technology could be used to improve personal efficiency. Everyone should walk away with confidence to begin applying AI within their organization and at their desk.
Click HERE to view the full program and register.
Pension Awareness Day - February 15, 2024
Please join PIAC in supporting the Financial Services Regulatory Authority of Ontario (FSRA)'s upcoming 2024 Pension Awareness Day on February 15th. Pension Awareness Day is an initiative organized by FSRA to raise awareness about pensions, retirement planning, and financial security in retirement. “PIAC is pleased to continue supporting FSRA’s important efforts in the promotion of workplace pension awareness. Understanding the full scope of one’s pension benefits is central to a successful financial future. We advocate for retirement security and recognize its role in a thriving Canadian economy.” PIAC Chair, David Lawson.
New PIAC Resources - Public Equity Investment Management Questionnaire
The PIAC Due Diligence Questionnaire (DDQ) is a ready-made questionnaire for PIAC members focused on public equity markets investment managers. This questionnaire is the result of the collective efforts of the Public Equities Working Group. This DDQ can be used in a variety of ways. The whole questionnaire may be forwarded to a potential public equity investment manager during the due diligence process, it may be used to gain additional questions for your own manager questions, or sections of the DDQ may be used however best benefits your organization.
Click HERE to access the DDQ.
US Elections: Washington's Driving the Bus in 2024 - PIAC Spring Conference Featured Presentation
This session will delve into the 2024 US political landscape and the upcoming presidential election. Phil Orlando, Chief Equity Market Strategist at Federated Hermes will help members make sense of the US political climate and provide some thoughts on potential portfolio impacts and asset allocation views.
Click HERE to view the full program and register.
PIAC Conference Keynote Address: A Fireside Chat with Howard Marks
The PIAC Spring Investment Conference kicks off on April 17 with a fireside chat with one of the industry’s foremost long-term investing gurus. Howard Marks, Co-Chairman of Oaktree Capital, is known for his strategic perspective and well-researched, straightforward approach to institutional investing over his 40-year career. Register now to guarantee your place for three days of networking and educational content, with a focus on practical tips and tools members can apply to their day-to-day work. PIAC events are sales free zones with content created BY members FOR members.
Click HERE to view the full program and register.
PIAC Webinar on Biodiversity
People and businesses are dependent on biodiversity and ecosystem services, including clean air, water, healthy soils and pollination. According to the World Economic Forum, over half of the world’s GDP is moderately or highly dependent on nature. This means that protecting biodiversity is not just an environmental imperative but a crucial economic necessity. The Kunming-Montreal Global Biodiversity Framework (GBF) that was agreed at COP15 and the publication of the Taskforce on Nature-related Financial Disclosures (TNFD) have propelled investor and corporate action on biodiversity by providing strategic goals and frameworks. Join Zoé de Spoelberch and Sonya Likhtman, co-leads of biodiversity engagement and public policy work at EOS at Federated Hermes Limited, a leading stewardship provider, to explore how biodiversity is rising up the investor agenda. They will cover the relevance of nature-related risks and opportunities to companies and investors, the landscape of investor coalitions and frameworks on the topic, and related public policy advancements. The webinar will be moderated by Carmen Velasquez, Director of Responsible Investment at Alberta Investment Management Corporation (AIMCo).
Click HERE to register.
New PIAC Directors
Please join us in welcoming three new appointments to the PIAC Board:Alison Gould, Saskatchewan Teachers' Federation Pension Plan, Sean Kulik, Nunavut Trust and Ying Wu, Vestcor
PIAC Welcomes Sobeys as a New Member Fund
Please join us in welcoming Sobeys as its newest member and Gaelan Hanlon as its Primary Member. "We decided to join PIAC to engage with and learn from its unique, collaborative network of plan sponsors that face similar investment challenges on a day-to-day basis. " says Hanlon, who is active on PIAC’s DC Committee.
PIAC Spring Investment Conference - Join Us in Toronto April 17 - 19
Immerse yourself in an exclusive lineup of expert-led, thought-provoking sessions showcasing insights and strategies to navigate the evolving pension landscape. This must-attend and redesigned conference will not disappoint if you are seeking meaningful knowledge sharing with your peers and would like to hone your critical thinking around the hot topics faced by plan sponsors. Look forward to building community and gain practical take-aways applicable to your daily pension investment activities at the PIAC Toronto Spring Investment Conference! PIAC events are created BY members FOR members. They are unique as there are no sponsors or exhibitors and are sell-free zones. The external providers, consultants and academics who present are hand-picked by your peers for their expertise in a certain field.
Click HERE to view the full program and register.
PIAC Announces New Officers
PIAC is pleased to announce the following Directors have been appointed:
Chair – Dave Lawson, VP Investment Management, TELUS
Vice-Chair – Antonietta Cicerone, Managing Director, Head of Enterprise Risk & Governance, CN Investment Division
Secretary-Treasurer – Asif Haque, Chief Investment Officer, CAAT Pension Plan
Past Chair – Graeme Hay, Chief Investment Officer, Teachers' Retirement Allowances Fund
PIAC Featured in Benefits Canada
Benefits Canada magazine covered PIAC's advocacy efforts for 2024: "PIAC will concentrate its legislative advocacy efforts on funding reform in 2024, including for an overhaul of long-term, minimum funding regulations for federally regulated defined benefit pension plans", said Dave Lawson, PIAC’s new chair.
View the article HERE.
Submission to BC Finance regarding VLB Regulations
On January 15th, PIAC sent comment to the BC Ministry of Finance in response to amendments made to the provincial Pension Benefits Standards Amendment Act, 2023, regarding Variable Life Benefits (VLBs). This regulatory shift follows Saskatchewan, Quebec and the federal government in revising their pension standards to allow for VLBs, an important innovation in the Canadian retirement savings landscape. In the submission, PIAC recognized this important policy development and its potential to meaningfully improve the options available for managing longevity risk for Canadians who save for retirement outside of traditional defined benefit plans. PIAC supports a principles-based approach to VLB regulation development. PIAC recommended that BC allow for flexibility in the development of the VLB market and refrain from implementing overly prescriptive measures.
Read the full submission HERE.
PIAC Welcomes New Member Fund
Honda Canada Inc. has joined as PIAC's 132nd member fund and Cristina Lisita is the Primary Member.
"My decision to join the association, backed by the endorsement of the Pension Committee co-chairs, stems from my newfound interest in the pension space, despite it not being my full-time focus," says Lisita. "The opportunity of connecting and engaging with highly knowledgeable individuals within a collaborative environment resonated with me as an excellent opportunity worth pursuing. Tapping into exceptional leadership within the pension and investment industry is an invaluable chance to gain insights."
Thank You to PIAC's Outgoing Directors
PIAC wishes to extend its appreciation to Sean Hewitt, Katharine Preston and Francois Quinty for their service on their retirement from the PIAC Board after completing two terms.
Sean Hewitt, CEO at TTC Pension Plan most recently served as Past Chair of the Board and continues to volunteer on the Communique and Governance & Nominating Committees as well as the planning committee for the Spring Conference in Toronto on April 17 – 19 in Toronto.
Katharine Preston, Vice President, Sustainable Investing at OMERS remains active on PIAC’s Risk Management Committee, after serving for many years on the Investor Stewardship Committee.
François Quinty, Director, Investment Management at VIA Rail Canada served as a member of the Board and important contributor to PIAC’s Communiqué and Audit & Finance Committees for many years.
Under their guidance and contribution to several strategic planning sessions, the PIAC membership grew rapidly to more than 1,100 members and the association delved deeper into pension investment and more broadly into new specialized areas of expertise within the sector. PIAC would like to recognize their many hours of dedication to making PIAC an even better forum for pension professionals to network, meet and share ideas.
Six Things Pension Plans Should Discuss with Their Investment Managers on ESG: Communiqué Featured Article
Pension plans in Canada are paying more attention to the importance of ESG factors in the investment process. Driven by a recognition that they can have material financial impacts on portfolios and increasing expectations from regulators and stakeholders, it is crucial pension plans ensure that ESG is being considered in a meaningful way by those that are managing their members’ money - the asset managers. This article by Susan Golyak presents six important topics that you, as a pension plan administrator, should discuss with your asset managers.
Read the newsletter HERE.
Submission to OSFI on SCSE Consultation
On December 21, PIAC sent a response to the Office of the Superintendent of Financial Institutions (OSFI) regarding its consultation on the draft Standardized Climate Scenario Exercise (SCSE) methodology. While recognizing the value of the SCSE on assessing the potential impact of climate change on the financial sector, PIAC will look for further technical details expected to be in 2024 to provide more comprehensive feedback on the methodology. PIAC noted that member funds vary in size and not all have the administrative breadth for this substantial undertaking. PIAC encouraged OSFI to prioritize accessibility and efficiency.
Read the full submission HERE.
New PIAC Member Fund - iA Financial Group
PIAC is pleased to announce iA Financial Group Inc. has joined as a new member fund. Please join us in welcoming Pierre-Alexandre Desgagnés to the membership.
Communiqué Member Profile: Marlene Puffer
From one CIO to another: Steve Mahoney, CIO of Nova Scotia Pension Services Corporation, interviews Marlene Puffer, the new CIO of Alberta Investment Management Corporation (AIMCo) in the newsletter. The Q&A reviews Marlene's professional background, her experiences making the transition to a Maple 8 plan, current challenges and various initiatives she is involved in.
Read the newsletter HERE.
Submission to Finance on CMB Decision and RRB Cessation
On December 18, PIAC sent a response to Finance Canada in appreciation of the decision in its Fall Economic Statement to maintain the Canada Mortgage Bond (CMB) program. The role of CMBs in pension fund portfolios is significant and removing any ambiguities with regards to the program’s future will further solidify the reputation of the Canadian fixed income market on the global stage. The PIAC letter also recommends that the Government reopen consultations and reconsider discontinuing Real Return Bonds (RRBs). Canadian pension plans have been natural buyers of RRBs and their abrupt cessation has removed an essential investment vehicle for Canadian pension plans.
Read the full submission HERE.
Shariah Savings Plans for the Islamic Community: Communiqué Featured Article
Are Diversity, Equity and Inclusion a Priority for Your Organization? Dimitri Poliak, Principal, Savings at Normandin Beaudry, asks in this opinion piece why most savings plans are not considering the fastest growing religion in Canada. While Shariah investing does present some complexity to plan administrators and the participating CAP members, he suggests that the benefits are starting to outweigh the drawbacks. He says plans should view this as an opportunity to support an otherwise neglected and rapidly growing employee base, while acting on Diversity, Equity, and Inclusion (DEI) initiatives. These types of investments can also align with Socially Responsible Investing (SRI) initiatives and lead to greater engagement outcomes.
Read the newsletter HERE.
Accessing the Private Infrastructure Class in a Rapidly Changing Environment: Communiqué Featured Article
Infrastructure assets have proved their role within broader private market portfolios, and the downside-protection characteristics have translated into strong performance in tumultuous environments. As a result, institutional investors are allocating more capital to the asset class than ever before. This explores the opportunities in the market. The authors Jeff Buress and Jason Jenkins from Pathway Capital Management believe that open-ended structures will continue to be a readily available option for investors, and the core infrastructure market will to continue to grow, partially as a result of the continued de-risking of new infrastructure industries by non-core managers through closed-ended structures. Investors now have a greater ability to customize a portfolio to achieve their desired degree of risk/return by appropriately diversifying by strategy and by fund structure, each of which has its own challenges and opportunities.
Read the newsletter HERE.
Submission to BCFSA on Natural Catastrophes and Climate-Related Risks
On November 30, 2023, PIAC responded to the British Columbia Financial Services Authority (BCFSA) consultation on Natural Catastrophes and Climate-Related Risks. PIAC welcomed the work of BCFSA, recognizing the utility of conducting climate scenario analysis and stress testing for the appropriately sized pension plan. PIAC asserted that these analyses require a commitment of resources that may be unsustainable for plans with a small asset base and limited staff. PIAC also acknowledged existing data transparency issues related to external portfolio management and to the quality of data available based on disclosures from the entities in which our members invest. PIAC would support an expectation for plan managers to discuss their approach to climate risk management with their beneficiaries and asset managers. This disclosure is also in line with TCFD. PIAC stated any BCFSA requirements for pension plans related to climate risk should remain principles-based.
Read the full submission HERE
Apples to Apples: Are Private Market Valuations Fair? Communiqué Featured Article
In 2022, there was one overriding refrain that dominated discussion about private markets: “Valuations in private markets are bogus.” How, it was asked, can it be that public markets are down 20% and private markets are only down around 5%? Surely, private market valuations had fallen harder and just weren’t being reported as such. This article by Mike Woollatt from Hamilton Lane, presents the data to confirm that while the public markets are outperforming private markets for the last two reported quarters by a significant margin, over the last three years private equity has outperformed and over nearly any 10-year time horizon private equity has outperformed relevant public market indices.
Read the newsletter HERE.
New Issue of Communiqué Out Now!
One of our largest issues ever, the Fall 2023 Communiqué edition features a variety of articles on topics ranging from Private Market Valuations to Accessing the Infrastructure Asset Class, from tips on what ESG issues to raise with External Managers to DC platform choices, including savings plans for the Islamic Community. What's unique to this issue is the chance to get to know a number of our members. AIMCo CIO Marlene Puffer is featured in a Member Profile and her predecessor at AIMCo Jai Parihar is interviewed in a fireside chat Member Roundtable. You can read about our friendly and approachable Deputy Executive Director Don Andrews and his plans for the future of the association. You will also be introduced to Romina Cortina, our new Manager of Government of External Relations. Highlights from the recent Fall Conference in Halifax, award winners, new resources for members, recent advocacy submissions and People on the Move round out this information-packed edition.
Read the newsletter HERE.
PIAC Announces the Appointment of Romina Cortina
Graeme Hay, Chair of the Board, and Peter Waite, CAE, Executive Director of the Pension Investment Association of Canada (PIAC) are pleased to announce that Romina Cortina has been appointed the Manager of Government and External Relations effective November 13, 2023. Romina comes to PIAC with an impressive record in government relations and policy development. In this role she will be responsible for all advocacy, government relations and external relations management, and provide counsel and policy advice for PIAC. “We are very excited to have an excellent candidate in place to assist PIAC in the development and execution of the Association’s advocacy goals,” stated Graeme Hay.
Negotiating Investment Manager Fees Best Practices - Survey and Key Takeaways from PIAC Member Forum
Negotiating investment fees with investment managers is a critical step in plans’ due diligence and implementation processes. More than 30 members representing funds of all sizes across the country attended a member forum to share their insights on best practices in negotiating investment management fees. The presenters discussed their philosophy and strategies in different asset classes and how they address the challenge of negotiating lower costs while building strong partnerships with investment managers. The group then broke up into breakout rooms for further discussion. The forum was not recorded to protect confidentiality, but a summary of key take-aways and the results of an attendee quick poll are provided for members only HERE.
PIAC Featured in Benefits Canada for Advocacy on RRBs
PIAC was Featured in Benefits Canada for its advocacy on Real Return Bonds: “Without a product linked to Canadian inflation, the extra cost from managing alternative investments will ultimately be passed down to Canadian workers.”
View the full article HERE.
Melania Paraschiv Receives 2023 Volunteer of the Year Award
The 2023 Terry Staples Volunteer of the Year Award was presented at the 2023 Tax Conference to the Chair of the PIAC Tax Working Group Melania Paraschiv, who is Director, Taxation at Ivanhoé Cambridge, the real estate arm of Caisse de dépôt et placement du Québec (CDPQ). Only the second person to Chair this group, under her leadership, it has evolved from planning the annual Tax Conference to a year-round mandate of running webinars, exploring specific issues such as the Netherlands Tax Refunds and preparing resources for the website. She has cultivated a strong participatory team which stretches from Halifax to Victoria. Congratulations Melania!
PIAC Manitoba Regional Council Meeting Coming Up
Meet and interact with your pension colleagues for a catered lunch at a member fund's offices on November 17, 2023 between 12:00 and 1:30 PM. Regional Council luncheons are held twice a year and are a great opportunity to expand your professional network, gain insights, and brainstorm innovative solutions to challenges in the industry. We look forward to seeing you! To register, or to find a meeting near you, visit the Regional Council Events page HERE.
PIAC 2023 Tax Conference Attracts Record-Breaking Number of Delegates
The PIAC Tax Conference 2023 at the Humaniti Hotel Montréal attracted a record-breaking number of attendees who came together for two days of knowledge exchange and networking on tax issues impacting the pension industry. The success of the event is the direct result of the dedication of volunteers on the PIAC Tax Working Group, who did a wonderful job at creating an exciting, relevant, and helpful program for delegates: Gail Anthony-Hokororo, Nyomi Beatty, Karry Cheang, Antonietta Cicerone, CPA, Mimi Duong, Pedro Galego, Nathalie Kassar, Matt Leonard, Maya Loufti, Neil Marcovitz, Nima Nouri, Melania Paraschiv, Sky Schapiro, and Angela Winder
Presentation slides and the full program is available HERE
Submission to Finance Canada Requesting Consultation on Real Return Bonds
On November 1, 2023, PIAC called on Finance Canada to open a consultation on its abrupt decision to stop issuing RRBs. As stated in its submission in January 2023, PIAC believes the decision was based on narrow consultations that did not include the primary purchasers of RRBs and incorrect assumptions about the level of demand. For many sponsors with pension plans indexed to inflation, RRBs provide the most direct and cost-effective inflation hedge. Particularly in the current inflationary environment, the abrupt end to RRB issuance forces pension plans to look to alternative markets outside of Canada, and to more complex, administratively expensive and less liquid real assets, to manage inflation risk. With this sudden decision, Canada is now an outlier in the developed world and the government has removed a valuable investment tool for pension funds in the country.
Read the full submission HERE
PIAC Member Forum - DC Retirement Planning Tools: A Case Study
Join us on Thursday November 9, 2023 at 12:00 PM Eastern to test-drive two new retirement tools to try to help Mary achieve her goals and still retire comfortably. Janice Holman will use Ecker’s Guided Outcome tool and Tawnya Duxbury from Sun Life will use their One Plan tool to analyze Mary’s situation and address some important considerations to help Mary make this important decision. PIAC members will have the opportunity to participate in a members-only discussion following the provider presentations. The session will be moderated by DC Committee Chair, Cheryl Shea (Director, Pension Assets & Operations, CP Rail System) and DC Committee member Kamila Giesbrecht (Executive Director, Investments, The University of British Columbia Faculty Pension Plan).
Register HERE for the Member Forum.
Regional Council Meetings Announced Across the Country
Meet and interact with your pension colleagues over a catered lunch or over Zoom this Fall as Regional Council meetings are being held across Canada. Regional Council meetings are held twice a year and are a great opportunity to expand your professional network, gain insights, and brainstorm innovative solutions to challenges in the industry. For a meeting near you, visit the Regional Council Events page HERE.
New Job Posting - President & Chief Executive Officer, Vestcor
Due to a planned retirement, Vestcor is seeking an experienced executive to join as its next President & Chief Executive Officer. Reporting directly to the Board of Directors, the new CEO is responsible for providing the strategic direction, risk and opportunities management and leadership necessary to ensure the efficient, effective, and sustainable operation of Vestcor Inc. Core to this role is working successfully with Vestcor's numerous public sector pension plan and benefit plan clients ensuring the provision of exceptional service that enables both current and future client plans. Click here to view the full job description, view the current opportunities or create a posting on the PIAC Job Board.
Dan Goguen Receives Terry Staples Volunteer of the Year Award
Dan Goguen, Vice President, Real Assets at Vestcor, was presented the Terry Staples Volunteer of the Year Award for 2022 at the PIAC Fall Conference in Halifax by PIAC Chair Graeme Hay. Dan has served on numerous committees and working groups, starting with the group that put on the conference the last time it was in Halifax in 2012. He also helped with the 2013 conference in Boston and Chaired the 2015 conference in Moncton. Also, in 2012 Dan joined the Investment Practices Committee and went on to serve two terms as its Chair. He now leads the Alternatives Working Group and is also Chair of the Atlantic Regional Council, which meets every Spring and Fall. Last but not least, Dan served on the Board of Directors from 2012 to 2017 and as Chair of the Board in 2015. PIAC’s membership is very engaged. Our membership consists of over 1,000 individuals from 130 of Canada’s largest pension funds. Of those 1,000 individuals, over 135, are active in the life of the association by serving on a committee, speaking at a conference or webinar, writing articles for the newsletter or helping prepare an advocacy submission. That is an enviable record of involvement and each year, one of those volunteers is singled out for special recognition and presented with the Terry Staples Volunteer of the Year Award. Terry Staples was an executive with Ontario Hydro and a member of the group that founded PIAC in 1977. Terry served as PIAC’s second President in 1978 and, throughout the time he was a Member, was also a Director of PIAC. Terry’s greatest contribution to PIAC was the work he invested in the development of PIAC’s first Constitution. His tireless devotion was recognized by PIAC naming the Volunteer of the Year after him.
Proud Recipients of the PIAC Chuck Harvie Distinguished Service Award: John Sinclair, Betsy Springer, Lisa Jankov and Simon Frechet
At the Fall 2023 Conference, PIAC Chair Graeme Hay, CPA, CMA, CFA presented the Chuck Harvie Distinguished Service Award to four individuals, all of whom have an impressive history of involvement in various committees, working groups and the PIAC Board. The Chuck Harvie Distinguished Service Award was established by the Board of Directors in recognition of Chuck Harvie’s long commitment to PIAC. Chuck was a member of the group that founded PIAC back in 1977 and he served on the Board for many years where his advice and counsel were carefully heeded. Chuck will also be remembered as PIAC’s only Director Emeritus. His dedication to PIAC was obvious to everyone and he exemplified the model volunteer. The Chuck Harvie Award for Distinguished Service is granted to those persons who have made a significant contribution to PIAC and the management of pension funds over a long period of time. It is given upon the conclusion of an individual’s career in pension fund management.
The Changing Face of Choice in Group Retirement Plans - Paper by PIAC Director Roman Kosarenko
DIY participants need to understand that they can't have the cake and eat it too - can't have all the choices they want and enjoy the benefits of institutional oversight and economies of scale. For plan sponsors, there is a limit to what choices can be accommodated without significant incremental fiduciary risks. The article by Roman Kosarenko, PIAC Director and Senior Director, Pension Investments, Loblaw Companies Limited, contains a review of research about the number of plan options and other practical tips and advice.
Click HERE to read the full article.
Pension Plan Structures: A Primer - PIAC Tax Conference Featured Presentation
The PIAC Tax Conference November 2 - 3 at the Humaniti Hotel in Montreal, is designed by your tax pension peers to inform you of the latest trends, new regulations, and opportunities and help you to discover innovative approaches to maximize returns, manage risks, and optimize tax efficiency in pension portfolios. In this session on Pension Plan Structures, a panel of experts from McCarthy Tétrault consisting of Scott W. Bell, Partner, Geneviève Favreau, Associate, Christian Meighen, Partner and Susan Nickerson, Partner will provide an overview of:
- The Income Tax Act and pension standards requirements on how registered pension plans must be structured for registration
- How some of Canada’s largest public sector plans have been structured under their governing legislation
- Tax structuring issues that arise in the investment of plan assets
Register and view the full program HERE.
PIAC Fall Conference Brings Together Almost 100 Pension Industry Professionals
Another fantastic PIAC Fall Conference wrapped up last week in sunny Halifax. We had informative sessions and presenters on a variety of topics that touched on so many different areas applicable to pension investment professionals. Thank you to everyone who participated in such a great event! Special thank you to our conference committee, who came together to provide a world-class conference program. Slides will be available on the PIAC website shortly and a full summary will appear in the upcoming Fall issue of the Communique newsletter.
Fund Investments: ECI, FDAP, FIRPTA and other US Tax Considerations for Canadian Pension Funds - PIAC Tax Conference Nov 2 - 3 Featured Presentation
A panel of experts consisting of Elizabeth Adams and Cristina Arumi at Hogan Lovells US, will be joined by a plan sponsor, Wesley Riley from Ivanhoé Cambridge, to provide a technical overview of key US tax considerations for Canadian funds. They will describe and discuss common fund structures and US tax concepts that influence US fund structures and are of particular interest to Canadian pension fund investors – including dispositions in the secondaries market and contract provisions affecting tax that are likely to be most important depending on the size of the deal and the vintage of the fund. Attendees of this session will come away with greater insights into the tax rules most commonly applicable to Canadian pension funds, including the US trade or business and effectively connected income (ECI) rules, the US taxation of investment income, and exceptions specific to foreign pension funds (including under Section 892 and the qualified foreign pension fund (QFPF) rules of the Foreign Investment in Real Property Tax Act (FIRPTA). The session will be moderated by Neil Marcowitz Vice President, Tax, Finance at BCI
Register and view the full program HERE.
PIAC Job Board Posting - HRM Pension Consultant (Full Time)
Reporting to management, the Pension Consultant will work with the Plan Member Services team at Halifax Regional Municipality to provide high quality pension administration service. The office is located in HRM, and can accommodate a flexible work arrangement that includes both an in-person and remote work environment. The primary responsibility of the Pension Consultant will be ensuring the accurate and timely processing of all member transactions, such as retirement, termination, death, reciprocal transfers and service purchases; annual year end processing, and overall database management. The Pension Consultant will also be responsible for communicating with plan members and beneficiaries on their pension entitlements, and providing guidance and training to internal staff.
Click HERE to view the PIAC Job Board.
Submission on CAPSA Draft Guidelines on Pension Plan Risk Management
On September 29, 2023, PIAC provided comments on CAPSA's Draft Guideline on Pension Plan Risk Management. PIAC emphasized the need for a principles-based approach to accommodate diverse plan sizes and levels of sophistication. PIAC raised 11 areas for improvement, with key concerns focusing on clarifying inconsistent language and definitions, reducing prescriptive elements, and establishing clear expectations between plan administrators and third-party asset managers. PIAC suggested adding a step in risk reporting to guide resource allocation for risk framework implementation, including non-sophisticated models for tracking risk. PIAC recommended incorporating rebalancing constraints for illiquid assets in risk-based sensitivity limits and distinguishing expectations for plan administrators and third-party asset managers. PIAC called for changes in language and definitions, consistency in ESG terminology, and simplification of risk-related terms. Lastly, PIAC proposed clarifying the difference between "investment risk governance" and "investment risk management" and streamlining the Guideline by removing redundancies from merged guidelines on topics like leverage, ESG, and cyber risks.
Read the full submission HERE.
PIAC Launches Job Board - Where Excellence Meets Opportunity
PIAC is pleased to announce that it is launching a new member service - the PIAC Job Board is now available! This new service will be another valuable addition to the member services provided exclusively to PIAC members. The PIAC Job Board is a valuable resource available only to PIAC member funds. It reaches over 1,000 pension professionals within our membership. For $1,000 per month, member funds can post jobs that are publicly available on our website, are distributed through our LinkedIn Profile to over 1,400 followers and promoted in our weekly E-newsletter to all members – providing wide reach for the latest opportunities available.
Click HERE to view the PIAC Job Board.
Monitoring ESG Integration with Investment Managers - PIAC Member Forum on Wednesday, October 25 at 12:00 PM Eastern
Plan sponsors from BCI (Jon Deneuville), AIMCo (Carmen Velasquez), PSP Investment Board (Catherine Isabelle) and UTAM (Lu Yao) will share best practices on how to better engage with managers on how they are integrating ESG into their investments. Some funds are developing (or refining) external manager ESG assessment frameworks and creating scorecards to ensure consistency across strategies and asset classes. They will discuss details on active ownership activities, including engagement with holding companies, proxy voting and advocacy work. They will then open up the floor to a member discussion of others’ approaches and issues plans are facing.
Click HERE to register.
Practical Considerations on Indirect Tax for Canadian Pension Plans - PIAC Tax Conference Featured Presentation
Jadys Bourdelais and Jasmine Jolin from Ernst & Young will revisit the GST/HST rules applicable to pension plans and outline the recent legislative changes affecting these provisions during this keynote session. Taking a practical approach, they will review the compliance obligations of pension plans for indirect tax purposes and will discuss the opportunities which may be available to such entities from a GST/HST perspective, including input tax credit entitlement for financial institutions, zero-rating of financial services and holding entities deeming rules. Register by October 2 to take advantage of room rates and early bird registration fees for the PIAC Tax Conference on November 2 – 3 at the Humaniti Hotel in Montreal.
Register and view the full program HERE.
Negotiating Investment Management Fees Best Practices - PIAC Member Forum on October 17
Balancing Costs & Partnerships - Being overly frugal when negotiating fees with your investment managers may actually be counter to your plan members’ best financial interests, blindly signing up to managers’ rack rates may even be worse. Negotiating investment fees with your investment managers is a critical step in your due diligence/implementation processes and unfortunately, fee structures vary greatly from asset class to asset class. The good news is that you and your plan are not alone in facing this challenge! With over 130 pension plans and more than $2 trillion in assets, the PIAC member network has lots of great insights to share on best practices in negotiating investment management fees. Graeme Hay from TRAF Robert Field from BCI and Ahren Estabrooks from Ontario Teachers' will lead the discussion, which will be held on Tuesday, October 17, 2023 at 12:00 PM Eastern.
Click HERE to register.
Leveraging Technology in the Tax Function - PIAC Tax Conference Featured Presentation
Technology is playing an increasing and more critical role in the tax function across all pension funds. The tax function is being asked to transform from compliance manager to that of strategic business partner. In an environment with increasing complexity and limited resources, technological solutions are integral in driving efficiencies and value-add insights. In this session, tax technology and transformation experts Frankie Llewellyn-Thomas, Partner, Tax Transformation, KPMG Canada and Gagandeep Singh, Associate Partner, Tax Technology & Transformation, Ernst and Young will lead attendees through why technological transformation is imperative and how it can be achieved. This will include discussion on current technologies and use cases, as well as delve into the future of Artificial Intelligence and Machine Learning in the context of the tax function.
Register and view the full program HERE.
PIAC Submission to CSA on Amendments to Corporate Governance Guidelines and Diversity
On September 18, 2023, PIAC responded to the CSA consultation on proposed amendments to Form 58-101F1 Corporate Governance Disclosure and National Policy 58-201 Corporate Governance Guidelines. PIAC supported Form B, primarily because of the importance of standardized and comparable disclosures across different issuers in relation to the representation of women and historically underrepresented groups on boards and in executive officer positions. Form A would leave discretion for issuers to disclose no diversity information beyond gender, so would not be a substantive improvement over the status quo. Form B would provide both certainty to issuers in terms of what needs to be disclosed, as well as useful and comparable information for making investing and voting decisions. The disclosure required in Form B should be paralleled in relation to executive officer positions so that shareholders can understand where progress is being made on diversity. PIAC requested that the terminology be harmonized with other Canadian regulation and legislation, such as the Canada Business Corporations Act and Employment Equity Act to minimize confusion and ensure comparable and consistent disclosure.
Read the full submission HERE.
PIAC Communiqué Member Profile - Dan Hudgin
Daniel Hudgin from Emera’s Pension Investments Team sits down with Pension Investment Association of Canada's Steve Mahoney for this edition of the Communiqué Member Profile. The Q&A reviews the highlights of Dan’s career and the oversight he has on different types of pension plans across multiple jurisdictions. The edition also features articles by members on Investment Risk Model Management, the complexities of accommodating DEI considerations in RSPs, the outlook for Private Credit, Greenwashing Accusations in Canada and the impact of the Canadian government ceasing to issue RRBs. The results of three important PIAC surveys are summarized: The DB and DC Asset & Returns Surveys and the DC Operational Costs Survey.
Read the newsletter HERE.
The Only Conference Designed Specifically for Pension Tax Professionals - Register for PIAC Tax Conference
The PIAC Tax Conference held November 2 - 3 at the Humaniti Hotel in Montreal brings together renowned experts and industry leaders to discuss the latest trends, regulations, and opportunities impacting pension tax professionals. Discover innovative approaches to maximize returns, manage risks, and optimize tax efficiency in pension portfolios. Whether you’re a seasoned tax expert or simply interested in expanding your knowledge in this field, this conference offers a unique platform to exchange ideas, network with peers, and enhance your expertise. Don’t miss this opportunity to stay ahead of the curve and make informed decisions for the future of pension investment.
Register and view the full program HERE.
Secure Your Place at the PIAC Fall Conference
Deadline for Early Bird Registration Extended Until End of the Week. Register and view the full program HERE.
CARR Finalizes the Allowed Uses for Term CORRA
On August 29, 2023, the Canadian Alternative Reference Rate Working Group (CARR) finalized its guidance on the allowable use cases for Term CORRA. You can read the document here. The term CORRA, first announced by CARR in January, will be officially launched by CanDeal Benchmark Administration Services Inc. (CBAS) and TMX Datalinx on September 5, 2023. The use of Term CORRA will be restricted to use cases developed by CARR, specifically loans and any associated derivative hedges. Going forward, the approved use cases will be governed by the Term CORRA administrator, CBAS, and will be available on its website. While the benchmark will be published on the CBAS website on a T+1 basis for free, access to real-time data or the creation of financial contracts or instruments referencing Term CORRA will require licensing from TMX Datalinx.
Perspectives on Investment Manager Selection - PIAC Conference Featured Presentation
Two prominent plan sponsors - Dan Goguen, Vice President of Real Assets at Vestcor and Nikki Keating, Director of Investments at Bimcor Inc. - will share their insights and approaches on issues pertaining to investment manager selection at the PIAC Fall Conference in Halifax October 4 – 6. Topics will include: evaluation frameworks, conducting investment due diligence, and retaining investment managers throughout periods of underperformance.
Register and view the full program HERE.
Canada Brings the Curtain Down on Real Return Bonds - PIAC Communiqué Featured Article
Canada’s decision to cease new real return bond (RRB) issuances makes it the first G7 nation to take inflation-linked bonds off the table. The decision, which was largely attributed to weak demand, comes at a time where inflation is still a major headwind. RRBs have been around for nearly three decades, at which time they’ve become a viable inflation hedging tool for pension funds. While it will still be possible to trade RRBs, price discovery may become a challenge as dealers revert to acting as agents between market players. There is no set tool or strategy that will act as a perfect substitute for Canadian RRBs. Jean-Francois Giroux, Emilie Paquette and Vishal Mansukhani, MBA, CFA from Manulife Investment Management outline the short- or long-term options available, such as real assets and U.S. Treasury Inflation-Protected Securities (“TIPS”). Choosing between these options is a trade-off and dependent on an investor’s objectives and expectations for future inflation.
The newsletter also features articles by members on Investment Risk Model Management, the complexities of accommodating DEI considerations in RSPs and the outlook for Private Credit and Tips to Avoid Greenwashing Accusations in Canada. The results of three important PIAC surveys are summarized: The DB and DC Asset & Returns Surveys and the DC Operational Costs Survey.
Read the newsletter HERE.
Should Your DC Plan Design Change to Meet Today's Needs? - PIAC Conference Featured Presentation
In these times where more employees are struggling to make ends meet, should your DC plan change to allow additional flexibility to include goals other than retirement? Janice Holman, who leads the financial wellness consulting group at Eckler, will review plan design options, smart ways of including additional flexibility and some of the potential drawbacks. Delegates will learn about plan sponsors who have expanded their design on employee feedback and take up rates as well as the impact on their traditional plans.
Register and view the full program HERE.
Greenwashing Accusations in Canada: Five Tips for Pension Plans to Manage Their Exposure - PIAC Communiqué Featured Article
Greenwashing accusations are on the rise in Canada and globally, and it seems no institutional investor is insulated from criticism. Even pension funds regarded as leaders in responsible investment (RI) have found themselves in the crosshairs of environmental groups. This article by Blythe Clark, Michelle de Cordova and Dustyn Lanz discusses greenwashing and the growing trend of greenwashing accusations in the investment industry. It concludes with five practical tips for Canadian pension funds to avoid the risks associated with greenwashing accusations.
The Summer 2023 Communiqué edition also features articles by members on Investment Risk Model Management, the complexities of accommodating DEI considerations in RSPs and the outlook for Private Credit and the impact of the Canadian government ceasing to issue RRBs. The results of three important PIAC surveys are summarized: The DB and DC Asset & Returns Surveys and the DC Operational Costs Survey.
Read the newsletter HERE.
Private Credit is Poised to Continue Taking Share Amid Favourable Market Dynamics - PIAC Communiqué Featured Article
Changes in the competitive landscape with banks and reduced liquidity in the public markets are set to accelerate the shift to private credit. Investors are attracted to the strong track record of private credit assets and the current market opportunity for outsized risk-adjusted returns. This article by Greg Mason, CFA explores how these market dynamics will likely drive continued flows into private credit markets for the foreseeable future.
The Summer 2023 Communiqué edition also features articles by members on Investment Risk Model Management, the complexities of accommodating DEI in RSPs, tips to avoid greenwashing accusations and a look into the impact of the Canadian government ceasing to issue RRBs. The results of three important PIAC surveys are summarized: The DB and DC Asset & Returns Surveys and the DC Operational Costs Survey.
Read the newsletter HERE.
Asset Allocation: Can We Count on Bonds to Play Defense? - PIAC Conference Featured Presentation
The role of bonds in DB pension plans’ asset allocation is generally to “play defense” by mitigating various risks. In 2022, bonds failed in their role of playing defense. Fast forward to the second half of 2023: yields are now higher, but this arguably reflects a new normal where inflation risk is heightened, and central banks are potentially less accommodative with monetary policy. Given this backdrop, what is the outlook over the next 5+ years for bonds, with respect to their ability to get back to playing defense in DB pension plan portfolios? Daniel Hudgin will moderate the expert panel featuring Lisa Hornby, CFA and Heather Mason-Wood.
Register and view the full program HERE.
Don't Fall in Love With Your Model: A paper on investment model risk management - PIAC Communiqué Featured Article
Model risk cannot be eliminated completely, but a sound and robust risk management framework can help stakeholders understand and manage model risk. This article in the Summer edition of the PIAC Communiqué newsletter by Edmond Assal, FSA, FICA, CFA and Oussama Chakroun, Ph.D. discusses how the focus on realistic assumptions, robust stress testing, independent model validation, data quality, qualitative research, and enhanced governance practices has helped institutions better understand and manage model risk in the face of market disruptions and crises. Furthermore, models will continue to evolve, benefiting from improvements in cloud computing, big data, and artificial intelligence, which will enable greater granularity in modelling. However, no matter how sophisticated the models become, they cannot predict the timing and severity of the next economic downturn. Therefore, don’t fall in love with your model!
The Summer edition also features an examination of the complexities of offering additional funds to accommodate DEI considerations in RSPs, an outlook on private credit, tips for Canadian funds to avoid greenwashing accusations and a look into the impact of the Canadian government ceasing to issue RRBs. The results of three important PIAC surveys are summarized: The DB and DC Asset & Returns Surveys and the DC Operational Costs Survey. Dan Hudgin, a new PIAC director from Eastern Canada, is interviewed for the member profile, and a committee profile sheds a spotlight on the very active DC Committee.
Read the newsletter HERE.
Update on Reassessments of Dutch ECJ Reclaims - PIAC Member Forum
Join us on September 14, 2023 for a Member Forum on developments regarding ECJ reclaim reassessments in the Netherlands. Jeroen Van Der Wal, Founder and CEO, Taxology Global, will discuss how the reassessments seem to revolve around circle of beneficiaries and lump sum benefits payments as part of the “objective comparability” test that is at the core of ECJ reclaims. Some of the responses received from the Dutch tax authorities to objection letters filed or to reassessment announcements provide some insight into the Dutch tax authorities’ reasoning why differences in the circle of beneficiaries or lump sum benefits payments would result in incompatibility and, consequently, ineligibility for ECJ reclaims. The forum will be moderated by Neil Markovitz, Vice President, Tax, BCI.
Register HERE
PIAC's Joint Submission on CAPSA CAP Guideline #3 Covered in Benefits Canada
The Association of Canadian Pension Management, the Canadian Life and Health Insurance Association and the Pension Investment Association of Canada say the Canadian Association of Pension Supervisory Authorities’ draft guideline for capital accumulation plans significantly alters the expectations and industry standards for CAPs.
In an open letter, the organizations requested the CAPSA reconvene its industry working group to review the current draft guideline in detail to address concerns about its reach, balance and potential for unintended consequences.
“We believe in its current form, the guideline can create adverse outcomes for Canadians,” said the letter. “In particular, increased burden may lead to less plan sponsors offering CAPs today, ultimately harming the ability of Canadians to save for retirement.”
Read the FULL ARTICLE
Read the full submission HERE
AI in Pension Plans - PIAC Conference Featured Presentation
Recent developments in AI including ChatGPT have increased debate on AI’s use and future growth as well as its potential positive and negative implications. This session will discuss where AI is today, how it is impacting the investment industry and how we should prepare for future adoption as generative AI continues to evolve. This session will be presented by Bradley Betts, Managing Director at BlackRock, during the PIAC Fall Conference at the Marriott Waterfront Halifax on October 4 – 6.
Register and view the full program HERE.
PIAC Welcomes New Member Fund - Medicus Pension Plan
Medicus Pension Plan has joined PIAC. Medicus is a new multi-employer pension plan designed specifically for incorporated physicians in Canada. Established by MD Financial Management Inc. and Scotiabank, Medicus is now open to incorporated physicians in Ontario, Nova Scotia, Prince Edward Island, British Columbia, Alberta and the Territories. Please join us in welcoming Prashant Mulay as the new representative at PIAC with the fund.
Joint Statement on CAPSA CAP Guideline
On August 4, 2023, PIAC joined with the Canadian Life and Health Insurance Association (CLHIA), the Association of Canadian Pension Management (ACPM), along with the members of CAPSA’s Industry Working Group (IWG) to strongly encourage CAPSA to re-engage the IWG in CAPSA’s review process. In its current form, the Guideline can create adverse outcomes for Canadians. In particular, increased burden may lead to less plan sponsors offering CAPs today, ultimately harming the ability of Canadians to save for retirement.
Read the full submission HERE
PIAC Adding Manager of Government & Stakeholder Relations to Management Team
Are you an experienced communicator with skill and passion in government and stakeholder relations? PIAC is searching for a Manager, Government & Stakeholder Relations to help advance our advocacy goals and ensure the achievement of strategic goals to better the pension sector for our members and millions of Canadians.
The position is responsible for all advocacy, government relations, and external stakeholder management functions and to provide strategic counsel and policy advice.
If you, or someone you know may be a good fit, please view the career opportunity at the following link for more information: https://www.linkedin.com/jobs/view/3679057364/
Evolving Cyber Security Considerations: Due Diligence Processes for Asset Managers and Internal IT Preparedness - PIAC Conference Featured Presentation
Moderated by Jessie Zheng (Senior Investment Associate, Halifax Regional Municipality Pension Plan), this session will focus on cyber security risks/challenges faced by pension plans and asset managers and what they have done to address those challenges.
Register and view the full program HERE.
Summer Issue of PIAC Communiqué Out Now!
The Summer 2023 Communiqué edition features a PIAC paper on model risk management by the Risk Management Committee (Chair Edmond Assal, FSA, FICA, CFA and Oussama Chakroun, Ph.D.). Another article authored by a PIAC member, Roman Kosarenko, examines the complexities of offering additional funds to reflect particular investment beliefs and accommodate DEI considerations in RSPs. The Summer issue also features an outlook on private credit, tips for Canadian funds to avoid greenwashing accusations and a look into the impact of the Canadian government ceasing to issue RRBs. The results of three important PIAC surveys are summarized: The DB and DC Asset & Returns Surveys and the DC Operational Costs Survey. Daniel Hudgin, a new PIAC director from Eastern Canada, is interviewed for the member profile and a committee profile sheds a spotlight on the very active DC Committee. Upcoming events, including the Fall Conference and Tax Conference, recent advocacy submissions and People on the Move round out this information-packed edition!
Read the newsletter HERE.
PIAC Releases Defined Contribution Plan Operational Cost Survey Results
The PIAC DC Operational Costs Survey Report provides key benchmarking data and the context for understanding the costs of running a DC plan. It considers how various factors impact DC fees, including the approach to the DC plan’s investment line-up selection, the ability of the plan sponsor to obtain the benefits of scale to reduce its costs, and the complexity of the investment options. The detailed report outlines the costs and fees by type of arrangement and information about their pension peers. The full results are only available to participants. We would like to thank PIAC DC plans for participating, the DC Committee (with thanks to Chair Cheryl Shea, and committee members Michelle Peshko and Nikki Keating) for their work on this report, and a special thank you to Tom Keenleyside for drafting the report.
Read the highlights HERE
Submission to Finance on Negotiated Contribution Plans and Unclaimed Pension Balances
On July 24, 2023, PIAC provided input to the Department of Finance on proposed Regulatory Changes to the Pension Benefits Standards Regulations, 1985. PIAC noted that exempting negotiated contribution plans from pension solvency requirements is an appropriate change. PIAC also supported the revised framework for terminated federally regulated plans, but strongly encouraged the government to facilitate similar changes in ongoing plans with unlocatable beneficiaries. PIAC has been seeking for support from all levels of government in the process of locating missing plan beneficiaries. This is a long-standing frustration for pension plan sponsors who have retained liabilities in the plan for members who have left the plan, not just for terminated plans.
Read the full submission HERE.
Submission on CAPSA Guideline No. 3 - Guidelines for Capital Accumulation Plans
On July 20, 2023, PIAC responded to a consultation on CAPSA’s Draft Guideline No. 3 - Guidelines for Capital Accumulation Plans. PIAC stated that both the document and the process are flawed. CAPSA did not accept recommendations from the Industry Working Group, to which PIAC and other key stakeholders devoted significant time, thought and effort. PIAC referenced its August 2022 submission, including its support of decumulation and automatic and default features and areas of concern that were not addressed. PIAC is not supportive of CAPSA’s apparent shift to a highly prescriptive approach. PIAC has consistently supported principles-based guidelines that are flexible enough to be implemented in an ever-evolving sector and that do not discourage employers from offering CAPs. PIAC urged CAPSA to reconvene the IWG forum but if CAPSA chooses to continue its less-optimal approach, PIAC asked the consultation period be extended until September 30, 2023.
Read the full submission HERE.
Investing in Infrastructure: Evolution of the Category or a Slow Drift to Private Equity? PIAC Conference Featured Presentation
At the upcoming Fall Conference, Isaac Hashem CPA CA will moderate a discussion where Michael Rose and Andrew Peisch share insights into the changing face of institutional investing in infrastructure. The session will focus on the key asset characteristics that infrastructure fund managers seek during investment selection, and how those characteristics have evolved over time. 10-15 years ago, institutional investors would likely see a regulated water utility, an availability-based toll road, and a fully contracted renewables asset without a development pipeline to make the underwriting work, seeding an infrastructure fund. Are there enough investable traditional infrastructure assets remaining to meet increasing institutional investor demand and return expectations or has private equity creeped in to bridge the gap?
Register and view the full program HERE.
PIAC Asset & Returns Survey - RESULTS OUT NOW
Members Report Over $2.7 Trillion in Assets
PIAC is pleased to announce the results of the annual Asset & Returns Survey are now available to PIAC members. This valuable tool provides data such as asset mix exposures and performance for pension plans of all sizes and types across the country. New sections have been added this year to capture information on passive/active, asset class bucketing, and trends; plus the former Alternatives Survey has been consolidated into the survey. Highlights will be featured in the Summer issue of the Communique newsletter. The survey covers member DB plans and represents total plan assets of $2,709B. DC plans that completed that portion of the survey represent assets of $31,6B.
View the results (members only) HERE
An overview is publicly available HERE
Submission to Finance on Proposal to Consolidate Canada Mortgage Bonds
On July 14, PIAC responded to Department of Finance Canada’s consultation on the Proposal to Consolidate Canada Mortgage Bonds (CMBs). PIAC raised concerns about this proposed change, noting CMBs have long been a prevalent investment vehicle for pension funds that offers attractive benefits such as diversification, capital preservation, and appealing return profiles. The role of CMBs in diversifying pension fund portfolios is significant. If CMBs are discontinued, investors would face a difficult choice between accepting lower yields with GoC regular bonds or assuming potentially higher risks with alternative securities that trade at higher yields. Additionally, it remains uncertain whether the significant share of foreign investors in CMBs would transition to other Canadian fixed income investments, which could lead to a loss of liquidity in the Canadian fixed income market and undermine the market’s existing credibility with global investors. PIAC made several recommendations to the government if it proceeds with the consolidation, including the resumption of Canadian Real Return Bonds.
Read the full submission HERE.
Integrating ESG in Emerging Market Investment Processes - PIAC Fall Conference Featured Presentation
The CIOs of two asset managers (Ted Chen of Hillsdale and Tassos Stassopoulos at Tinetra) will speak about their experience in integrating ESG considerations in their Emerging Markets investment processes. With one manager using a fundamental approach and the other manager using a quantitative approach, they each provide a unique perspective to the same issue. Ying Wu, Risk Manager and Chief Compliance Officer at Vestcor will moderate the debate. Some topics that will be covered include:
- What is the breadth versus depth challenge in obtaining good quality ESG data?
- Unique challenges in applying ESG investing to Emerging Markets
- Some learned experience for specific EM countries
- How should the “S” and “G” factors be defined when we talk about ESG?
- As asset managers/owners, how can we collectively drive the direction of ESG investing to make a difference in the world’s E, S & G status?
Register and view the full program HERE.
PIAC Communiqué Featured Article - Alexandre Tetu Member Profile
From his start as a mechanical engineer, Alexandre Tetu, CFA, PRM from Desjardins Group Pension Plan, has never shied away from undertaking highly complex challenges, including going on to complete a Master’s degree in Financial Engineering and excelling at professional roles across asset classes and asset management functions. PIAC learns about the highlights of Alex’s career and the transformational project he is currently working on, modernizing the technology infrastructure and our data solutions for the plans' back office, middle office and front office teams while managing its operations, performance and portfolio analytics department.
The Spring 2023 Communiqué edition also features an article on China's Next Chapter: Reopening, Recovery and Beyond, examines new opportunities for short term investments in CAPs and interviews industry insider Julie Cays for her insights on the pension industry.
Read the Newsletter HERE
Energy Innovation - PIAC Fall Conference Featured Presentation
The global energy transition is well underway and represents a massive undertaking from governments, individuals and investors. In this session Karen Hutt from Emera will profile how one of Canada’s largest utilities is working towards carbon reduction and providing sustainable energy and Jehangir Vevaina from Brookfield, one of Canada’s leading global energy investors, will discuss where they see opportunities to continue deploying capital to support the transition. The session will be moderated by Darin Eddy, CFA Eddy, Director, Public Markets, Halifax Regional Municipality Penson Plan.
Register and view the full program HERE.
PIAC Member Forum - Alternatives to Real Return Bonds
Tuesday, July 25, 2023 at 12:00 PM Eastern
In light of the Federal Government’s decision to cease the issuance of Real Return Bonds (RRBs) in Canada, many pension plans and other investors are now faced with the challenge of finding another source of inflation protection. Members are invited to participate in a one-hour free-flowing discussion on how different plans are approaching this challenge, and the various alternatives to RRBs that are available to Canadian investors. The forum will be moderated by Matt Merriam, Senior Analyst, Pension Investments at Emera.
Click HERE to register.
Achieving Strong Returns with an Effective Governance Model - PIAC Fall Conference Featured Presentation
The PIAC Fall Conference at the Halifax Marriott Waterfront October 4 -6 will kick off with a presentation on how OTPP achieved strong positive gains in 2022 despite a difficult financial market. Steve Saldanha, Senior Managing Director, Portfolio Management & Asset Allocation at Ontario Teachers’, will outline the approach the plan took to allocating capital to achieve their returns and how their governance model allowed them to make some tactical portfolio changes heading into difficult markets. He will also outline how they are thinking about the markets today and into 2024 and beyond. The session will be moderated by Steve Mahoney, CIO of Nova Scotia Pension Services Corporation This will be followed by three days of education, interactive discussions and networking. Topics include Energy Innovation, ESG in Emerging Markets, Investing in Infrastructure, Cyber Security, AI in Pension Plans, Flexible DC plans, Bonds’ Role in Asset Allocation and Manager Selection. The event will close with the popular PIAC Exchange, an open-mic free-flowing confidential discussion of the key issues impacting pension plans today.
Register and view the full program HERE.
PIAC Communiqué Featured Article - The Past, Present and Future of Pensions Through the Eyes of Industry Leader Julie Cays
Julie Cays, who announced her retirement as CIO of CAAT in Spring 2021, has had a long and successful career in capital markets and pension investments spanning over 35 years. This journey has taken her from CIBC to HOOPP to CAAT, where the plan was transformed during her tenure from a traditional asset mix with an AUM of $5.3 billion to a highly sophisticated, diversified portfolio with $13.5 billion AUM - accompanied by a 10-year annualized rate of return of 10 per cent. PIAC recently awarded Julie with its highest honour, the Chuck Harvie Distinguished Service Award. Communiqué Chair Theva Naidoo caught up with Julie and asked her to share insights, experiences, advice, and outlook for the future.
The Spring 2023 Communiqué edition also features an article on China's Next Chapter: Reopening, Recovery and Beyond.... examines new opportunities for short term investments in CAPs and profiles Alexandre Tetu, CFA, PRM, from Desjardins Group Pension Plan. The newsletter also features a summary of the Member Risk Survey, Conference Highlights and takeaways from Member Forums on 2023 Investment Outlook and Private / Public Equity Risk.
Read the Newsletter HERE
PIAC 2023 Fall Conference Registration Opens Today
Join us at the Halifax Marriott Waterfront October 4 - 6 for three days of education, interactive discussions and networking. Engage with industry leaders, renowned experts, and fellow professionals as we delve into the latest trends, strategies, and best practices in the ever-evolving world of pensions. You will leave inspired and armed with strategies to steer your pension plan from port to prosperity.
The conference will kick of with a Keynote Presentation by Steve Saldanha from Ontario Teachers' on Achieving Strong Returns with an Effective Governance Model. Other sessions will include energy innovation, Integration ESG in EMs, Investing in Infrastructure, Evolving Cyber Security Considerations, AI in Pension Plans, Flexible Options for DC Plans, Bonds, Manager Selection and more…
The event will close with the popular PIAC Exchange, an open-mic free-flowing confidential discussion of the key issues impacting pension plans today. Bring some of your burning questions about the state of the industry as a whole and your pension plan in particular to share with the group. Throughout the three day event, attendees will have many opportunities for networking and getting to know their peers - plus a lobster dinner on the waterfront.
Register and view the full program HERE.
PIAC Toronto Regional Council Lunch
Risk, real-estate, liquidity, and more were some of the interesting topics at the Toronto Regional Council meeting yesterday. Thank you to the many folks who came out – there was great networking and lively discussion. Thank you also to Toronto RC Chair Iva Parisi, CPA, CA of Investment Management Corporation of Ontario (IMCO) for hosting/facilitating at OMERS.
PIAC Communiqué Featured Article - Short-Term Investment Options in Your Capital Accumulation Plan (CAP): A Long Term Perspective
As the industry changes and matures, plan sponsors and regulators have become more comfortable with aligning investment options with the long-term objective of CAPs. They have also become more comfortable with market risk. While short term investment options are now paying significantly higher rates of interest than they have in the history of CAPs in Canada, changes to CAP investment options should be made in line with long term views and beliefs rather than near term economic scenarios. Given this context and the ongoing maturation of CAPs in Canada, authors Michelle Peshko and Cheryl Shea suggest it may be time to revisit short term investments to determine if they continue to have a place in CAPs.
The Spring 2023 Communiqué also features an article on China's Next Chapter: Reopening, Recovery and Beyond, results of the Risk Survey and highlights of the Spring 2023 Conference. In a special feature, PIAC catches up with pension industry guru Julie Cays after her retirement from CAAT Pension Plan and profiles Alexandre Tetu, CFA, PRM, from Desjardins Group Pension Plan.
Read the Newsletter HERE
PIAC Provides Testimony to the Senate Committee on VPLAs
PIAC Director Roman Kosarenko represented PIAC testifying for the Standing Senate Committee on Banking, Commerce and the Economy on May 11, 2023 for their review of the VPLA provisions of the budget implementation act C-47 (amendments to the Pension Benefits Standards Act and to the Pooled Registered Pension Plans Act. He was joined by Todd Saulnier, representing ACPM. A recording is available here.
Dutch ECJ Reclaims
Calling on PIAC members who have been contacted by the Dutch Authorities
As part of its monitoring of ECJ reclaim reassessments by Dutch tax authorities, the PIAC Tax Working Group would like to hear from members who have been contacted by the Dutch tax authorities and/or who would like to be kept abreast of developments. More information is available on the PIAC website here: https://piacweb.org/site/Tax-court-cases
A PIAC webinar was held in January on the formal and substantive law aspects to consider when confronted with reassessments of Dutch ECJ reclaims, including the statute of limitations for reassessments, formal requirements of valid reassessments and general principles of good governance (e.g. principle of good faith, principle of proper defense). Aspects of material law discussed included ECJ case law on objective comparability and the Dutch conditions for comparability of foreign pension funds with Dutch pension funds. The webinar was presented by an expert panel featuring Jeroen Van Der Wal, Founder and CEO Taxology Global and Neil Marcovitz, Vice President, Tax at BCI. Dutch ECJ reclaims were also a hot topic of discussion recently at PIAC’s Spring Conference.
Toronto Networking Lunch Next Week
Wednesday, June 21, 2023 | 12 - 1:30 PM | OMERS
Take this opportunity to meet new pension peers, including the new Chair of the Regional Council and see old friends face-to-face over a lunch meeting to discuss hot pension topics of the moment. Bring your appetite, news about what your fund is working on and any topic you'd like to get feedback on from the group.
Register HERE
PIAC Communiqué Featured Article - China's Next Chapter: Reopening, recovery and beyond...
China’s next chapter is set to look a lot different than the last. This means investors cannot rely on their existing game plan. In this article, the authors explain why they expect China’s reopening and recovery to continue to drive China’s economy and markets in the near term. But successfully navigating China’s next chapter will also require public and private investors to refocus on a wide set of new opportunities—and new risks. These include long-term secular tailwinds and structural headwinds with the potential to affect asset class performance and investment portfolios in the years ahead. portfolios for their concentration and the unnecessary idiosyncratic risks that imposes on institutional portfolios.
The Spring 2023 Communiqué edition also features an article for CAP sponsors who determine that short term investment options have a role to play in their plan and lists the characteristics of the four main types to choose from GICs or GIAs, Money Market, GDIAs and HISA ETFs. PIAC catches up with pension industry guru Julie Cays after her retirement from CAAT Pension Plan and profiles Alexandre Tetu, from Desjardins Group Pension Plan. A committee profile shines a spotlight on the important and rapidly evolving work of the Investor Stewardship Committee. The newsletter also provides an introduction to the new Deputy Executive Director, Don Andrews, a summary of the Member Risk Survey, Conference Highlights and takeaways from Member Forums on the Investment Outlook for 2023 and Beyond and Approaches to Private / Public Equity Risk.
Read the Newsletter HERE
2022 Annual Report Available
The PIAC Annual Report, which was presented at the AGM on Friday, May 12, 2022, features updates from the Chair of the Board, the Executive Director and Committee Chairs. It also contains information on advocacy submissions, education and networking events, awards, the audited financial statements and the composition of the Board of Directors. The Report is available publicly HERE.
Spring 2023 Conference Draws over 90 Participants
Pension thought-leaders from across Canada gathered for three days of education and networking May 10-12 at the Hilton Quebec City.
Speakers ranged from high profile practitioners, such as Vincent Delisle from CDPQ and Barbara Zvan from UPP to international experts such as Francois Trahan of Trahan Macro Research. The conference served as a platform for insightful discussions, sharing of best practices, and valuable networking opportunities for enhancing professional development and staying abreast of the ever-evolving pension management sector.
PIAC Member Update - Your Profile, Your Choice, Your PIAC
Members can now personalize their PIAC experience. PIAC members can now login to choose new categories for their interests and responsibilities in their member profile options. These changes are also now reflected in the resources pages and PIAC Exchange topics. Key changes are:
- For those whose roles are not strictly investment selection and oversight, new categories in Investment Operations now capture areas such as middle or back office, compliance, tax and legal/regulatory.
- Risk Management now specifies Investment Risk and Enterprise Risk.
- Categories on Fixed income and Public Markets now mirror the new Working Groups that have been formed to focus on those specialties.
PIAC Meets with CAPSA
Peter Waite, CAE Waite, PIAC Executive Director, led a delegation to meet with CAPSA on April 17. Joining Peter was David Gordon (Chair, PIAC Government Relations Committee), Michelle Peshko (DC Committee), Brendan Hart (Investor Stewardship Committee) and Don Andrews, PIAC’s Deputy Executive Director. PIAC encouraged CAPSA to continue its work on harmonizing principles based pension regulation and its efforts in the areas of ESG, DC Decumulation and Risk Management.
Canada's Pension Association Featured in Benefits and Pensions Magazine
Click HERE to view the feature.
Featured Conference Session: DC Pension Innovation
Hear how the leaders of three innovative DC pension plans that have been around for as long as 84 years have tackled some of the challenges still faced by DC plan sponsors including: decumulation, lifetime income solutions, communication and engagement and offering simple yet sophisticated investment options. While most DC pension plans in Canada are still relatively young and few allow members to draw retirement income, these plans have retired members and are able to assess the effectiveness of their plans in meeting the ultimate objective.
The conference is taking place May 10 – 12 at the Hilton Quebec City. Register now to take advantage of Early Bird registration fees and to reserve your hotel room – the deadline is ONE WEEK away. Click here to register and view the full program.
Featured Conference Session: Implementing Best Practices in Diversity and Inclusion Programs
Today’s organizations operate globally, in a business environment where diverse talent comes together. This is why building a diverse pool of talented employees of different backgrounds, experiences and abilities is fundamental to any organization success. Sarah Cavanagh, Manager, Equity, Inclusion and Diversity at PSP Investments and Kathleen Pabla, Portfolio Manager, Public Markets at CAAT Pension Plan will cover various topics including:
- Strategies to promote diversity and implement an inclusive work environment
- How to set clear, measurable and achievable D&I objectives within your plan (whether it is large, mid-size or small)
- How to implement and monitor D&I objectives with your external managers and partners
- How to deploy and apply D&I strategies across your foreign offices.
The conference is taking place May 10 – 12 at the Hilton Quebec City. Register now to take advantage of Early Bird registration fees and to reserve your hotel room – the deadline is less than two weeks away. Click here to register and view the full program.
PIAC Announces Appointment of Don Andrews
Graeme Hay, Chair of the Board, and Peter Waite, Executive Director of PIAC, are pleased to announce that Don Andrews has been appointed Deputy Executive Director effective April 10.
Don comes to PIAC with an impressive record in association management and will spend a year learning the ropes leading up to Waite delivering his 20th AGM address to the Spring 2024 PIAC Conference. Don will then assume Waite’s role as Executive Director.
“We are very excited to have an excellent candidate in place to ensure a smooth transition as Peter steps back after two decades managing PIAC," stated Hay. "Don has the energy and skills to help us continue our strong trajectory of growth.”
Katharine Preston - PIAC Communiqué Member Profile
Katharine has been able to combine her passion for the environment with a career in financial management. At the start of her journey, making that vision a reality took considerable effort and perseverance. After getting a civil engineering degree and working for an environmental engineering firm, she went on to earn an MBA in business and sustainability, a nascent field of study at that time. Even then, sustainable finance was not an area of focus within investment management, but she recognized that pension plans would be a natural fit, with their large investment portfolios and long time horizons. Pension plan organizations were just beginning to consider the implications of Environmental, Social and Governance (ESG) factors in their investment process and were faster than other market participants to build staff and resources. After many years of perseverance (and stubbornness) she was able to find a home in the pension industry. Read the Full Issue here.
New Approaches to Attracting and Retaining the Best Talent - Featured Conference Session
Solutions to the challenges in the current complex economic environment where the old tools and approaches may no longer be sufficient to attract and retain the best talent will be discussed by a panel of experts at the Spring Conference in Québec City May 10 – 12. Click here to register and view the full program.
Submission to CAPSA on its Draft Strategic Plan
On March 16, 2023, PIAC provided comments on the consultation of CAPSA’s Draft Strategic Plan for 2023-2026. The submission focused on two overarching themes: harmonizing regulatory expectations and consistency in approach to supervision of pension plans across Canada. PIAC also commended CAPSA for prioritizing the CAPSA Guideline: ESG Considerations in Pension Plan Management to be published in 2023. Read the Full Submission here.
Commercial Real Estate Price Correction Presents Opportunity - PIAC Communiqué Feature Article
Uncertainty in the macroeconomic backdrop, volatility in financial markets, and paradigm shifts in technology and consumer preferences all contribute to a unique set of risks for private commercial real estate. On the other hand, challenges present opportunities, and this article argues taht real estate should continue to provide portfolio diversification and income growth which can help offset higher inflation. Read the Full Issue here.
Featured Conference Session: What Canadian Plans Can Learn from the UK Liquidity Crisis
The dramatic increase in interest rates coupled with a fiscal faux pas by the government put UK pension plans under great stress in the Fall of 2022, especially those following liability-driven investment strategies. What happened exactly and what is the risk of a similar event for Canadian pension plans? Attendees will hear from a UK-based consulting firm, a large Canadian pension plan and a Canadian investment manager as they discuss what led to this meltdown and what lessons can be learned from this liquidity crisis. Click here to register and view the full program.
Reporting on the E of ESG: The What, the why, the how - PIAC Communiqué Feature Article
Integrating ESG (environmental, social, and governance) factors into investment strategies and capital stewardship decisions is becoming standard practice for pension plans across Canada and around the world. This trend has also increased the focus on transparency. Pension plans are under growing pressure—from plan participants, international advisory panels, regulatory bodies, and other stakeholders—to measure and disclose ESG performance. This article looks at environmental reporting—the E in ESG. It explains what environmental reporting is, why pension plans should report on environmental metrics, and how to get started, if you haven’t already. Read the Full Issue here.
Featured Conference Session: Market Outlook in Unprecedented Times
This session will feature a panel of two highly regarded market strategists with substantial knowledge of the impact of economics on equity and fixed-income markets (Sébastien McMahon, Vice President, Asset Allocation, Chief Strategist, Senior Economist, and Portfolio Manager, Industrial Alliance Investment Management Inc and Francois Trahan, President, Trahan Macro Research). They will present their diverging outlooks on financial assets with a focus on risks and opportunities. Click here to register and view the full program.
A Year of Unprecedented Bond Market Upheaval Creates an Opportunity in Fixed Income - PIAC Communiqué Feature Article
Stronger growth momentum in 2022 prompted the Bank of Canada (BOC) into a sooner and faster pace of rate hikes than what we’ve seen from the U.S. Federal Reserve (Fed). Eventually, however, the Canadian policy rate may peak modestly lower than U.S. rates. The BOC’s aggressive monetary tightening appears to have more of an impact on core inflation in Canada than similar central bank moves have had on other developed economies’ core inflation, and Canada’s national average housing price has dropped notably. Canada’s economic momentum may be slowing, and the macro outlook may be challenging, but the authors believe bond markets now offer compelling yields that may help investors navigate this time of uncertainty. Read the Full Issue here.
PIAC Investment Outlook Member Forum - Thursday March 9, 2023
This roundtable discussion will begin with a broad retrospective on highlights from 2022 and the outlook for 2023 and beyond. Overall, 2022 proved to be a difficult year for investors. The trusted diversification benefits of government bonds were nowhere to be seen as interest rates jetted higher as central banks took dramatic steps to combat alarming inflation levels. Public equity valuations suffered as well with the repricing of risk and higher discount rates on future earnings. While some private market strategies like real estate and infrastructure with inflation hedging properties may have fared better last year, informed investors are cautiously waiting to see how the valuation lag plays out in 2023 and positioning their portfolio for the eventual recovery rally. Attendees will break out into rooms focused on Fixed Income, Public Equities and Alternatives and then members will come back together again to share highlights from their discussions in this free-flowing, confidential format.
Featured Conference Session: Overallocation and Liquidity Issues in Private Markets
In this session on Thursday, May 11, Three experts will explore how LPs are navigating the denominator effect, and how they are thinking about a challenging valuation environment. The panel will touch on key themes and ideas across different markets. Click here to register and view the full program.
Winter Communique Newsletter - NEW ISSUE OUT NOW
The Winter 2023 edition of Communiqué turns the page to a new year of opportunities, with two articles outlining the potential in Fixed Income and Commercial Real Estate after a turbulent year within both these asset classes. Plans of all sizes at different stages of environmental (ESG) reporting and integration will find an article that helps navigate through this process, including sample metrics and links to helpful reading materials. The member profile focuses on Katharine Preston, and the committee profile highlights the exciting work of the Risk Management Committee. The newsletter also provides an introduction to the new Directors and Officers, welcomes our 1,000th new member and lists all the new individuals joining PIAC since the Fall.
We look back on the year that was in PIAC by the Numbers, which shows growth in almost every metric, and recent advocacy submissions and look forward to the coming year, particularly the 2023 Spring Conference in Québec City and a series of Member Forums where you are invited to openly discuss the key issues of today.
Read the Full Issue here.
Featured Conference Session: Generating Returns Amidst Extreme Volatility - Keynote Presentation from Vincent Delisle, Senior Vice-President and Head of Liquid Markets, CDPQ
After a banner year in 2021, financial markets experienced a sharp decline in 2022 with the first simultaneous equity and bond corrections in over 50 years. Volatility remains elevated again in 2023 as investor sentiment is impacted by monetary tightening, global recession fears and persistent geopolitical tensions. In this context of rolling volatility and shifting interest rates trends, investors and pension funds must adapt their strategies in order to generate returns for their clients. During the conference’s opening keynote presentation, Vincent will share his view on market trends and CDPQ's approach to navigating this atypical environment.
Join your pension colleagues in Québec City May 10 – 12 for three days of networking, educational content, presentations from thought leaders and discussions on current topics impacting the pension industry. Click here to register and view the full program.
FSRA Launches First Annual Pension Awareness Day - February 16, 2023
On the first Pension Awareness Day, The Financial Services Regulatory Authority of Ontario (FSRA) is urging plan sponsors to take a few minutes to spread the word and engage in a conversation about retirement planning. In a recent FSRA poll, while 78% of plan members signed up for their pension plan immediately when they joined their workplace, 49% admitted they know more about their favourite TV show than about the inner workings of their pension plan.
“Given the current economic situation, it’s more important than ever to engage with your employer or union to better understand your pension and what you are entitled to,” said Caroline Blouin, FSRA’s Executive Vice President, Pensions. “You could live up to one third of your life in retirement. We hope Ontarians understand the value of a pension plan, and the benefits of starting to save early to achieve personal financial goals.”
PIAC Chair Graeme Hay commented “Efforts to promote awareness of pensions should be supported. The importance of retirement security to Canadians and the Canadian economy cannot be overstated. PIAC is proud to lend its voice in support of Pension Awareness Week.”
PIAC Calls on Senate for Sober Second Thought on C-228
On February 10, 2023, PIAC called on members of the Standing Senate Committee on Banking, Commerce and the Economy to carefully consider the repercussions of Bill C-228. PIAC strongly disagrees that pension security will be achieved by the Bill’s proposal to adopt a super-priority for unfunded pension liabilities and employee retirement benefits in insolvency situations. PIAC highlighted the harmful impact on the pension and business environment and several unintended adverse consequences for those this Bill aims to assist, including a threat to the sustainability of DB pension plans.
Click here for the full submission.
Submission on Finance Canada's 2023 Pre-Budget Consultations
On February 8, 2023 PIAC responded to the Finance Canada’s 2023 pre-budget consultations by highlighting four substantive issues:
1 - Funding Reform to a going concern plus funding model consistent with other Canadian jurisdictions,
2 - Continued facilitation of the implementation of Variable Pay Life Annuities,
3 - Review of the implications of Bill C-228 on Canadian corporations and the pension plans they sponsor, and
4 - The decision to cease issuing Real Return Bonds.
US Direct Lending Opportunities and Risks for Long-Term Investors: Featured Conference Session
Join us for the PIAC 2023 Spring Conference on May 10 - 12 at the Hilton Québec City. In this session on Thursday morning, Susan Kasser, Head of Neuberger Berman Private Debt will host a discussion on topics that are top of mind for many investors as allocations and interest in US Direct Lending continue to grow:
- Is now a good time to be investing in private debt?
- How does the opportunity compare to the public markets?
- How will the category perform in a decelerating global economy? inflationary environment?
- What are the near-term and long-term trends impacting the investment opportunity?
The full conference program will be released shortly. Register here.
“Our members are concerned that well-intentioned regulatory changes, such as Bill C-228, may actually diminish employers’ support for pensions,” says Graeme Hay, the PIAC’s new chair and chief investment officer at Manitoba’s Teachers’ Retirement Allowances Fund, referring to a controversial bill that would give super-priority to plan members during defined benefit pension windups. Since the bill received the support of parliamentarians from all parties in the House of Commons, preventing its passage will require the PIAC and other like-minded organizations to vote against it in the Senate.
The Canadian pension sector is facing numerous investment challenges this year, he adds. “With respect to investments, persistently high levels of inflation, heightened geopolitical tensions, the lingering impact of [the coronavirus pandemic] on supply chains and the threat of a recession continue to be top of mind with our members. PIAC members are also focused on meeting their [environmental, social and governance] goals. This requires readily available, clear and consistent ESG-related data.”
Hay believes the challenges related to high inflation are exacerbated by the federal government’s decision to cancel its real return bond program, a move the association is seeking to see reversed. Read the full article here.
Featured Conference Session - The Journey of UPP: Building Ontario’s Newest Defined Benefit Pension Plan from the Ground Up
Registration is now open for the PIAC 2023 Spring Conference on May 10 - 12 at the Hilton Québec City.
This session on Thursday morning will share insights and key learnings from Barbara Zvan, President and CEO of the new University Pension Plan (UPP). Barb will talk about building a new pension plan, including bringing together a dynamic investment team, combining pre-existing investment programs into one cohesive fund, engaging members, and embedding ESG approaches into the foundation of an organization—and putting them into practice.
In her role, Barb is responsible for realizing UPP’s strategies to deliver valuable, lifelong pension security, and service excellence to UPP’s over 37,000 members while establishing UPP as the pension solution of choice for Ontario’s university community. Formerly the Chief Risk and Strategy Officer for the Ontario Teachers’ Pension Plan, Barb is globally recognized as a leading voice on sustainable investing and an ambassador for defined benefit pensions. She was recently named Canada’s CEO of the Year and Corporate Citizen of the Year 2022 by the Globe and Mail’s Report on Business magazine in honour of her contributions and leadership in both areas.
The full conference program will be released shortly. Register here.
Welcome New PIAC Director - Dan Hudgin
PIAC is pleased to announce that Dan Hudgin, Senior Manager Pension Investments at Emera, has accepted the nomination to join the Board of Directors of PIAC. Dan also serves on PIAC’s Government Relations Committee and the Audit & Finance Committee. He sat on the Featured Conference Session - The Journey of UPP: Building Ontario’s Newest Defined Benefit Pension Plan from the Ground Up
Welcome New PIAC Director - Antonietta Cicerone
PIAC is pleased to announce that Antonietta Cicerone, Managing Director, Head of Enterprise Risk and Governance of the CN Investment Division, has accepted the nomination to join the Board of Directors of PIAC. Antonietta also serves on PIAC’s Tax Working Group and has been instrumental in bringing educational content to members through webinars and at the annual PIAC Tax Conference. List of PIAC Directors.
PIAC Announces New Officers
The PIAC Governance & Nominating Committee is pleased to announce the 2023 Board of Directors. PIAC is dedicated to ensuring that its Board reflects the membership and includes representatives from plans of all types (DB and DC, public and private), and sizes across the country. List of PIAC Directors.
Officers: Graeme Hay, CHAIR; Dave Lawson, Vice-Chair; Grace Wong, Secretary-Treasurer; Sean Hewitt, Past Chair
Directors: Antonietta Cicerone, Susan Golyak, Asif Haque, Daniel Hudgin, Roman Kosarenko, Katharine Preston, Francois Quinty, Cheryl Shea
Submission to Finance Canada on Real Return Bonds
On January 13, 2023, PIAC called on Finance Canada to reverse its decision to abruptly cease the issuance of Real Return Bonds (RRBs). PIAC noted the decision was made without consultation or warning and makes Canada an outlier in the G7. The end of RRBs as an inflation-protected liability hedge will force pension plans to look to alternative inflation sensitive investments in markets outside of Canada, which are more complex, administratively expensive, illiquid and potentially riskier. The end of RRB issuance also harms the secondary market by leading to even more unreliable market information. Read the Full Submission.
Grace Wong Profiled in PIAC Communiqué
In this edition of Communiqué, Grace Wong shares highlights from her accomplished 13-year career as the plan has grown in assets to almost C$30 Billion AUM, with a corresponding rise in personnel and sophistication. In her role as Senior Portfolio Manager, External Portfolios, she outlines some of the exciting current initiatives taking place, including some important potential changes in the public markets programs. Grace recently accepted the role of Secretary-Treasurer of PIAC after serving for several years on the Board of Directors.
The newsletter also features a thought-provoking article on The Follies of Central Bankers' Learning Curves, a discussion on whether balanced or target date funds are the better default for CAP funds, a primer on Impact Investing and an in-depth review of the litigation in the US of the BlackRock TDF investment option and what it means for Canadian plans. The newsletter also outlines important new initiatives PIAC is undertaking in 2023 and beyond as part of its new strategic plan.
Read the full issue here.
PIAC Submission to CSA on Disclosure of Climate-Related Matters
On January 10, 2023, PIAC made a submission to encourage the Canadian Securities Administrators to revisit its proposed rules in National Instrument 51-107 in view of attaining globally consistent climate reporting regulation. PIAC asked the CSA to closely consider incorporating the SEC’s recent proposed climate related disclosure regulation, which is more rigorous than the CSA’s, and the new ISSB set of global standards that may allow rules in different jurisdictions to be reconciled. Read the Full Submission.
PIAC Webinar: Transitioning Canadian Financial Markets from CDOR to CORRA
February 2, 2023 at 12:00 PM Eastern
Co-Chairs of the Canadian Alternative Reference Rate working group (CARR), Harri Vikstedt and Karl Wildi will discuss CARR’s two-staged transition path from CDOR to CORRA, including relevant transition milestones that could impact PIAC members. Refinitiv Benchmark Services (UK) Ltd announced on May 16 that they will cease publishing CDOR after June 28, 2024. Registration is open for PIAC members only. .
Register for the webinar here.
PIAC Webinar: Formal Law and Substantive Law Aspects of Reassessments of Dutch ECJ Reclaims
January 20, 2023 at 12:00 PM Eastern
Jeroen van der Wal, Founder and CEO of Taxology Global will focus on the formal law and substantive law aspects to consider when confronted with reassessments of Dutch ECJ reclaims, including the statute of limitations for reassessments, formal requirements of valid reassessments and general principles of good governance (e.g. principle of good faith, principle of proper defense). Aspects of material law to be discussed include ECJ case law on objective comparability and the Dutch conditions for comparability of foreign pension funds with Dutch pension funds.
The webinar will be moderated by Neil Marcovitz, Vice President, Tax, BCI and is open to PIAC members only.
Register for the webinar here.
Member Roundtable: A Fireside Chat with Betsy Springer Featured in PIAC Communiqué
Betsy Springer, a well-respected veteran in the Canadian pension industry and long serving PIAC member announced that she will be retiring in 2022. PIAC Communiqué deemed it opportune to tap into Betsy’s illustrious career and ask her to share her experiences and insights with the PIAC community. Betsy managed the Carleton University Pension Plan for almost 35 years. The size of Carleton’s hybrid plan is $1.6 billion. Betsy also oversaw the investments of Carleton’s $350 million Endowment Fund. Communiqué had a casual fireside conversation with Betsy where she shared her insights, advice and outlook for the future. Read the article here.
Canadian Implications of US BlackRock Target-Date Fund Litigation - PIAC Communiqué Feature Article
This past summer, lawsuits were brought against 11 employers that offered the BlackRock LifePath Index TDFs as an investment option for their 401(k) plans. The lawsuits allege that investment underperformance over a select period of time is sufficient to ground a breach of fiduciary duty claim. The complaints claim that the “to retirement” glidepath and passive investment approach of the BlackRock TDFs were imprudent and that a prudent fiduciary would not have offered the BlackRock TDFs in a plan’s investment line-up. If successful, these cases will put plan fiduciaries in a no win situation, provide an incentive for administrators to chase returns, dramatically increase DC plan litigation and fiduciary insurance costs. The article explores the allegations, the recent motion to dismiss the complaint , the common approach to addressing breach of fiduciary duty claims in the US and Canada and the proactive steps Canadian plan administrators can take.
Read the full issue here.
What is a Better CAP Default - A Balanced Fund or a TDF? - PIAC Communiqué Feature Article
From a plan sponsor perspective, choosing the default fund requires an understanding of employee demographics (age distribution and employment patterns), existing balances and availability of advice. While there is significant behavioural support for a “less is more” philosophy when it comes to the size of the investment option offering, the customization benefit of TDF as the default is not universal and gets eroded over time. Employees who are 45+ or those with substantial existing balances may be better off constructing their own allocation, in a manner of DYI balanced fund, if the components are available.
The recent newsletter also features a thought-provoking article on The Follies of Central Bankers' Learning Curves, a checklist for asset owners on impact Investing and an in-depth review of the litigation in the US of the BlackRock TDF investment option. There is a special focus on celebrating PIAC members, including a 'Member Roundtable' fireside chat with pension industry champion Betsy Springer.
Read the full issue here.
Join Team PIAC - Find Your Niche within PIAC's Committees and Working Groups
Canada’s pension sector has witnessed tremendous growth and increased complexity, and PIAC members have always stepped up to share, connect and create. Whatever your passion is, PIAC has a committee or working group for you. Our volunteers tell us they get tremendous value from participating with peers from across types, sizes and geographies of plans. In fact, they repeatedly say they get more out of their experience than the time they put in by sharing information and best practices, and networking together to provide innovative services and fresh ideas to the membership. The time commitment can be as small as passively attending a few meetings to chairing committees or and spearheading webinars and events.
PIAC is launching new working groups on Fixed Income and Public Equity Markets as well as a forum for members who are involved in Investment Operations (middle/back office) to meet. These areas of focus add to PIAC’s regular opportunities to get involved with committees ranging from Risk, Alternatives, ESG and DC to delivering content for newsletters, webinars, conferences and advocacy submissions on key pension issues.
Let us know where you want to participate and reach out to our Executive Director, Peter Waite at Info@piacweb.org to explore the opportunity that is right for you. Click here for more information.
The Follies of Central Bankers' Learning Curves - PIAC Communiqué Feature Article
This article argues that central bankers failed to ‘dust off’ their old college textbooks as they completely ‘missed the boat’ on recognizing certain risks and stuck with their ‘easy money’ policies far too long. The result is that inflation is at a forty-year high, bond markets just had their worst first half of a year on record and stock market investors are reeling from 20%+ losses in markets around the world this year. Now the only policy that central bankers seem to have is to jam interest rates up high enough and fast enough to cool down inflationary pressures by basically sending the global economy into a recession. Once again, they seem not to be reading the playbook. Monetary policy is often referred to as a ‘blunt instrument’ as opposed to a ‘precision tool’. In that regard, central banks have moved more aggressively than they ever have in the past year to tighten monetary conditions and they should probably at least take a ‘pause’ to see what the impact of these rate increases has been before continuing. Monetary policy works with a ‘lag’ so we may not have seen the impact yet of the rate increases already in place. They may find that economic growth is slowing down quickly and that the aggressive rate actions of the Fed, the ECB, Bank of Canada and others to ‘control inflation’ may be fighting yesterday’s battle.
Read the full issue here.
NEW ISSUE - PIAC Communiqué Newsletter Out Now
PIAC’s Fall 2022 newsletter features a thought-provoking lead article on The Follies of Central Bankers' Learning Curves, followed by an in-depth examination of whether a TDF or Balanced Fund is the best CAP default, a checklist for asset owners on impact Investing and an in-depth review of the litigation in the US of the BlackRock TDF investment option and what it means for Canadian plans. There is a special focus in this issue on celebrating PIAC's members. A new feature called 'Member Roundtable' provides a transcription of an inspiring fireside chat with pension industry champion Betsy Springer. There is also a member profile on Grace Wong at Canada Post and an article on the awarding of PIAC's Chuck Harvie Distinguished Service Award to Brenda King. The newsletter also outlines important new initiatives PIAC is undertaking as part of its new strategic plan as well as highlights from the Fall 2022 Conference in Calgary and the 2022 Tax Forum, both of which were held in person for the first time since the pandemic. Members who attended agreed it was great to be back together again. Read the full issue here.
PIAC Announces Third Operational Costs Survey on DC Service Provider Fees
The DC Operational Costs survey, which is conducted every three years, looks at what DC plans are paying for various services from their providers. Until it was launched by PIAC in 2017, this data did not exist for Canadian DC plans. The results are available to participating PIAC members with a DC plan component. The data can be a valuable tool when negotiating rates with providers and when communicating to boards and committees whether your fees are comparable with others in the industry. PIAC members interested in participating can email info@piacweb.org to receive personal login information. The survey is completely confidential, and the reports will aggregate the results. The deadline is December 9, 2022.
DC Member Forum on ESG Changes to BlackRock's LifePlan Target Date Funds
PIAC is holding one hour members’ only discussion on November 10, 2022 at 12:00 PM Eastern on the move within BlackRock’s LifePlan funds to MSCI sustainable indices. The forum will allow PIAC members to discuss openly in a non-recorded meeting how they are approaching this important change with the dominant provider of TDFs in the market. Concerns about this move include:
- Unlike in the US, Canadian plans do not have the option of retaining the existing product.
- Beyond certain industry exclusions, the optimization process results in quite a large number of companies being excluded from the new indices.
- BlackRock was the only passive option available in Canada. With the changes being proposed can sponsors still consider this option as passive?
- Are plan sponsors considering other alternatives including building their own “passive” option?
The session will be moderated by Cheryl Shea, Chair of the DC Committee.
Members in Toronto for PIAC Tax Conference
Over 35 members from across the country attended the PIAC Annual Tax Conference this week for two days of networking, educational content and a free and open discussion of current tax issues impacting the pension industry. Experts from around the world provided important updates on issues ranging from new pension fund borrowing rules, the global minimum tax (pillar 2), ESG and tax practices, ATAD 3, Article XXI in the Canada-US Tax Treaty, GST/HST rules and Section #149.
PIAC Makes Second Submission to House Finance Committee on Bill C-228 Super-Priority of Pensions in Bankruptcy
On October 18, 2022, PIAC responded to the Standing Committee on Finance's review of Bill C-228. PIAC strongly disagreed that adopting a super-priority for unfunded pension liabilities and employee retirement benefits in insolvency situations would achieve pension security. The overall impact on the pension and business environment would be harmful and result in unintended adverse consequences for those this Bill aims to assist. The negative impact on DB pension plan sponsors’ ability to secure capital will force many employers to close their DB pension plans at a time when they are dwindling. PIAC outlined concerns such as altering the risk profile assessed by creditors and impacts of solvency funding and made detailed recommendations on issues such as creative ways companies can work with stakeholders, removing impediments from MEPPs and introducing Solvency Reserve Accounts. PIAC noted further research is needed before the Bill is passed. Read the full submission here.
PIAC's Executive Director to Step Down on 20th Anniversary
Peter Waite, who has served as PIAC’s Executive Director since 2004, will step down from the role after delivering his 20th AGM address at the Spring Conference on April 19, 2024 at the Hilton Hotel in Toronto. The PIAC Board of Directors has approved a new Executive Director Transition Plan that will see a search process commence in the 4thQ of 2022, and a candidate in place to serve as Deputy Executive Director for the twelve months leading up to April 2024. The Deputy Executive Director will succeed Waite following the 2024 AGM. PIAC continues to be managed by Association & Events Management International, a full-service association management company based in Toronto. Mr. Waite is a Principal of that firm and will continue to serve several of the smaller association clients as he eases into semi-retirement. This transition plan will ensure the continuity of the management team that has served PIAC over many years.
PIAC Tax Conference at the Toronto Hilton Oct 24 - 25
This unique event connects tax colleagues across the country for two days of networking, educational content, and a free and open discussion of current tax issues impacting the pension industry. PIAC has invited the experts to provide updates on everything you need to know about changes in Canadian and international taxation rules that impact pension plans. The agenda includes sessions on: New pension fund borrowing rules, the global minimum tax (Pillar 2), The ‘T’ (Tax) in ESG, European ATAD3, the Canada-US Tax Treaty, an overview of GST/HST rules, Section #149, a US Tax Update and a participant discussion forum. The full program and registration is available here.
PIAC Marks National Day for Truth and Reconciliation
At its Fall Conference in Calgary, PIAC marked Canada’s second National Day for Truth and Reconciliation with a presentation from Stephanie Big Plume. Stephanie comes from the Tsuut’ina Nation located on the southwestern edge of Calgary. Stephanie shared her perspectives about the intergenerational nature of Residential School effects, the importance of having a National Day for Truth & Reconciliation, and her perspective on what the future of Reconciliation is.
Submission to the Standing Committee on Finance re Bill C-228 Regarding a Super-Priority for Pension Plans in Bankruptcy
On September 21, 2022, PIAC participated in a joint submission to the Standing Committee on Finance in advance of its study of Bill C-228, a Private Members Bill that would create a Super-Priority for Pension Plans in Bankruptcy. The submission expressed concern over unintended consequences and proposed three potential alternatives to achieve the goal of pension security for Canadians. A core concern is decreasing credit availability and making it more difficult for struggling companies to secure loans. This will increase the chances of struggling businesses falling into bankruptcy. Combined with potentially more onerous reporting requirements, it would create a disincentive for employers to establish or maintain DB pension plans over DC plans. Enabling restructuring of financial arrangements with lenders would allow companies to emerge as a going concern, maintain operations and protect jobs and pensions. Alternatives suggested were 1) Allow for the appointment of a pension insolvency trustee to wind down the pension plans of insolvent employers and make decisions that maximize the dollars available; 2) Utilize large multiemployer pension plans to manage pensions from insolvent companies since it may be beneficial for smaller pension funds to merge with another plan to achieve the scale necessary to maintain the plan on a going concern basis, and 3) Allow retirees of insolvent pension plans to take advantage of recent innovations in VPLAs and ALDAs to maximize their retirement dollars. The submission was made jointly with the Association of Canadian Pension Management, Canadian Bankers Association, the Canadian Chamber of Commerce and the Canadian Manufacturers & Exporters. Read the Full Submission Here
PIAC Submission on Alberta Private Sector Pensions Review
On September 16, 2022, PIAC responded to a review of Private Sector Pensions by the Alberta Treasury Board and Finance. In the five-page submission, PIAC supported many of the initiatives, including solvency funding measures to harmonize with other jurisdictions; the recommendations for annuity purchases and discharge of liability; the introduction of ALDAs and VPLAs; the alignment with Deemed Trust provisions in BC; the permissibility of automatic enrolment for DC plans and clarification on the section on automatic escalation of contributions; the use/transfer of actuarial excess or surplus; and removing the requirement for audited financial statements to include liabilities. PIAC also requested the ability for plans to communicate disclosure information electronically. Read the Full Submission Here
PIAC Releases 2022 Risk Survey
Every three years PIAC’s Risk Management Committee conducts a confidential survey to gain a better understanding of current approaches to risk. The 2022 survey is now open for PIAC members until November 1. The aim is to build a true industry benchmark by plan size and type on topics such as: risk governance and processes, key risk measures and metrics tracked, asset and lability frameworks, risk hedging tools, emerging risks (ESG, geopolitical, etc.) and much more. Results will be shared among all participants and will permit each member to gain industry intelligence and keep up with best industry practices. Find the Survey Here.
CAP Guidelines Consultation
On August 31, 2022, PIAC provided comments on the consultation draft of revisions to CAPSA Guideline No. 3 – Guidelines for Capital Accumulation Plans. PIAC was pleased with the broad modernization of the 2004 document, but surprised at the extent of changes made to the draft submitted by the industry working group after an 18-month consultation, which PIAC participated in. PIAC requested allowing the IWG to review the next version before the document is released to ensure key concepts are incorporated with a practical degree of specificity - given the longevity of these documents and the importance of the guidelines to the development, operation and support of CAP plans for the benefit millions of Canadians. PIAC’s 7-page submission covers high-level comments on overall themes (Part I) and each of the seven major sections (Part II); and provides some examples of language which may be clarified or simplified (Part III). Read the Full Submission Here
The Challenges & Opportunities in Converting the Canadian Electricity Grid to Net-Zero by 2035 - Featured Conference Session
The Government of Canada has committed that, by 2035, the country’s electricity grid will produce net-zero greenhouse gas emissions. This session with Binnu Jeyakumar of the Pembina Institute, moderated by Emilian Groch, will explore a net-zero grid world from various perspectives; the environmental, economic and social benefits net-zero electricity can offer to Canadians; the challenges which will be faced by governments and industry to facilitate the creation of a truly net-zero grid by 2035; and what investment opportunities this transition could provide for pension plan sponsors. The full program for the Fall Conference at the Calgary Fairmont Palliser on September 28 – 30 is available here. Register by Tuesday, September 6, 2022, to take advantage of the Early Bird and Hotel rates.
The Value of Risk Modelling to Diversity Your Portfolio and Optimize Your Asset Allocation - Featured Conference Session
As plans become more sophisticated in their investments, understanding the types of investment risk in your plan becomes more important. The use of asset and risk modelling is an evolving area that plan sponsors should consider as their portfolios and the economic environment evolves. This session will discuss the various types of portfolio investment risks in pension plans and how to use asset modelling strategies to optimize your asset mix and risk budget. There is just ONE WEEK left to register for Early Bird & Hotel Rates: The full program for the Fall Conference at the Calgary Fairmont Palliser on September 28 – 30 is available here. Register by Tuesday, September 6, 2022, to take advantage of the Early Bird and Hotel rates.
Positioning Portfolios for the Transition to the Low Carbon Economy - Featured Conference Session
Climate change is a systemic risk, with far-reaching environmental, social and economic investment implications. It has the potential to significantly impact asset values across asset classes and markets. Carmen Velasquez, Director of Responsible Investment at AIMCo will explain the business imperative to integrating climate change into investment strategies and identify climate-related risks and opportunities, material to clients’ objectives. This is one of several sessions focused on a Western Canadian theme of Energy and Climate Change at the conference, which is being held at the Calgary Fairmont Palliser September 28 - 30. The full program is available here. Register by Tuesday, September 6, 2022, to take advantage of the Early Bird and Hotel rates.
PIAC Fall Conference Opening Keynote: Canada's Oil & Gas Sector - Thriving Through the Energy Transition
You won't want to miss Rhona DelFrari at the upcoming Fall Conference at the Fairmont Palliser in Calgary from September 28 – 30. Rhona will describe the actions Canada’s energy companies are pursuing to help ensure Canadian oil and natural gas is the preferred choice to meet global demand for decades. Hear how Cenovus and industry peers are collaborating to decarbonize production so they can continue to provide the reliable, affordable energy supply needed for strong global energy security in a lower‑carbon world as well as remain a meaningful contributor to Canada’s economic well-being. This includes an ambitious commitment by the industry to environmental, social and governance practices, which helped foster the recent creation of the Pathways Alliance with an ambition to achieve net zero emissions from the oil sands by 2050.
The full program is available here. Register by Tuesday, September 6, 2022, to take advantage of the Early Bird and Hotel rates.
Award-Winning Expert Jack Mintz to Speak on Energy Policy at Fall Conference
Despite the unrivalled utility of hydrocarbons, the growing ESG trend has created significant headwinds against new capital deployment in fossil fuel energy. However, with the recent geopolitical conflicts overseas, the reliability of energy has taken the center stage. How will policymakers adapt to ensure that we have access to affordable AND reliable sources of energy while moving towards decarbonization? What are the challenges and opportunities (as an investor)? The conference is at the Calgary Fairmont Palliser from September 28 - 30. With a Western Canada focus on Energy and Climate Change, other hot topics covered include private market investing during turbulent times, LDI opportunities, risk factor modelling, developments in the DeFi space and visionary custom TDFs. Register before August 26 to take advantage of the Early Bird Registration rate.
Liability Driven Investing Opportunities for Pension Plans: Featured Fall Conference Session
During 2022 we have witnessed a historic change in fixed income yields as the market responds to increased levels of inflation. For pension plan sponsors, this has meant increased discount rates which has caused a reduction in the valuation of pension obligations – leading to a meaningful increase in plan funding ratios. In this session, two experts from PIMCO will discuss the shift in Canadian bond markets and profile liability focused strategies that plan sponsors can utilize to take advantage of the current yield levels, lock-in funding ratios and mitigate future funding ratio risk in their plans. The conference is at the Calgary Fairmont Palliser September 28 - 30. With a Western Canada focus on Energy and Climate Change, other hot topics covered include private market investing during turbulent times, risk factor modelling, developments in the DeFi and crypto space and visionary custom TDFs. Register before August 26 to take advantage of the Early Bird Registration rate.
Achieving Nirvana - Taking Target Date Customization to the Next Level: Featured Fall Conference Session
Nirvana. Bliss. Peace. These are not typically words used to describe retirement funds, but they are each associated with what most of us hope for in retirement. In this interactive session, Zaheed Jiwani, Eckler Principal who leads the Defined Contribution consulting group will explore ways to customize target date funds beyond the simple time horizon to help more people achieve their retirement nirvana. This is one of the topics on the agenda as pension professionals from across the country gather together again in person at the Calgary Fairmont Palliser September 28 - 30 for three days of networking, education and presentations from thought-leaders. The opportunities for meeting new people and seeing old friends is a highlight of PIAC events, along with the free-flowing Q&As and an open mic discussion forum to exchange ideas and learn how other plans are handling today’s issues in new and innovative ways – all in a confidential and sales-free environment. Register before August 26 to take advantage of the Early Bird Registration rate.
Private Market Investing in Turbulent Times: Featured Fall Conference Session
Join your pension colleagues from across Canada in Calgary September 28 – 30 to learn about how the impacts of recent geopolitical tension, elevated inflation and rising interest rates are being felt well beyond the public markets. In addition to discussing recent returns in private markets, conference attendees will hear from Burgiss about what its extensive historical data sets suggest may be in store for asset owners and managers across private market asset classes based on historic periods of market turbulence. This will be the first in-person PIAC conference since the pandemic and members are excited about the opportunity to see each other in person, network and hear presentations and ask questions of thought-leaders in the pension industry. An exciting agenda will feature emerging issues such as energy transition, ESG and climate change, DeFi developments, the impact of interest rates on the funded ratio and implementation of LDI, risk and custom TDFs for DC plans - all with a focus on practical implementation and new tools and ideas plans can use on a day-to-day basis. Register before August 26 to take advantage of the Early Bird Registration rate.
Summer Reading - New Issue of Communiqué Newsletter Out Now
PIAC’s Summer 2022 issue features thought-provoking articles on the impact of wars and pandemics on inflation, growth and global markets, the importance of a human rights disclosure standard, adding private equity to a DC plan and best practices for risk measurement and risk appetite statements. An in-depth analysis of the annual PIAC Asset & Returns Survey highlights trends, overall performance and allocations across different asset classes, and the Message from the Chair outlines important results from the 2022 Member Survey. The newsletter also has its regular features, ranging from a Member Profile on Graeme Hay at TRAF to recent advocacy submissions, new members and Recommended Reads. You'll also find highlights from our Spring Virtual Conference with a link to the recorded sessions, and upcoming events, including the Fall Conference from September 28 - 30 at the Fairmont Palliser in Calgary. Read the newsletter here.
Comments to ISSB on Sustainability Financial Information and Climate-Related Disclosures
On July 29, 2022, PIAC provided feedback to the IFRS Foundation International Sustainability Standard Board (ISSB) on its Exposure Draft IFRS S1 General Requirements for Disclosure of Sustainability-Related Financial Information and Exposure Draft IFRS S2 Climate-Related Disclosures. PIAC supported the ISSB’s decision to build upon existing TCFD reporting frameworks and SASB standards and advocated for a clear definition of materiality and broader guidance in some areas. Sustainability-related financial information should be disclosed at the same time and for the same reporting period of the financial statement. The benefits of consistent, comparable, and high-quality disclosures reported annually and globally outweigh the costs and reduce the burden of multiple varying reporting requests. PIAC supported the proposed set of seven cross-industry metrics and the inclusion of information on a company’s transition plans and its short and long-term targets (and progress made towards them). The standards should be implemented as soon as is practical, but PIAC would support a phased-in approach with earlier compliance from larger companies. Read the Full Submission Here
PIAC Fall Conference Featured Session: Institutional Investors and DeFi - Opportunities, Risks, accessibility, Frictions and Regulatory Hurdles
In this session, Ryan Clements, Assistant Professor, Chair in Business Law and Regulation at the University of Calgary, Faculty of Law, will discuss the opportunities, accessibility frictions, risks and regulatory hurdles that exist for institutional investors in decentralized finance (Defi) ecosystem. It will also highlight the current state of Defi regulation in Canada, including gaps, uncertainties, and developments from the recent crypto-market crash. Dr. Ryan has published and presented extensively on diverse topics in securities law, fintech and crypto-asset regulation, decentralized finance (Defi) and investment funds. He previously served as a Senior Policy Advisor with the Alberta Securities Commission (ASC), and on IIROC’s crypto-asset working group. He currently serves on the ASC's New Economy Advisory Committee.
The first in-person PIAC conference since the pandemic will also feature talks by thought-leaders on issues such as energy transition, ESG and climate change, private markets, the impact of interest rates on the funded ratio and implementation of LDI, risk and custom TDFs for DC plans - all with a focus on practical implementation and new ideas plans can use on a day-to-day basis.
Register before August 26 to take advantage of the Early Bird Registration rate.
PIAC 2021 Asset & Returns Survey Released
PIAC has posted the DB and DC Asset Mix of its members plans as at December 31, 2021. Total DB AUM now exceeds $2.786 Trillion, up 13.5% from the prior year (2020 – 2.454T, 2019 - $2.286T). Total AUM were represented by average actual exposure to Fixed income of 40.05%, equity of 39.97% and alternative mandates of 24.77%. DC plan AUM grew from $33.11 Billion at the end of 2020 to $35.37 Billion at the end of 2021, a 6.8% increase. The Asset Mix Report is available here.
Fall Conference Registration Opens - First In-Person PIAC Event in Two Years
Join your pension colleagues at the Fairmont Palliser Hotel in Calgary September 28 – 30 for three days of networking, education and presentations from thought-leaders on topics impacting the pension industry. The conference planning committee is busy working on an exciting agenda on emerging issues such as energy transition, ESG and climate change, private markets, the impact of interest rates on the funded ratio and implementation of LDI, risk, custom TDFs for DC plans and DeFi - all with a focus on practical implementation and new tools and ideas plans can use on a day-to-day basis. Register before August 26 to take advantage of the Early Bird Registration rate.
PIAC Membership Hits 900
More than 100 pension professionals have joined PIAC recently as membership continues to climb steadily from just over 250 a few years ago.
PIAC's 900th member is Dino Rimbidis. Of his decision to join PIAC, he says, “I recently joined CN Investment Division as CFO and have found that PIAC, as a leading voice of Canadian pension funds, contains invaluable information to myself and will help me enormously in knowledge sharing with my colleagues and peers in the industry.”
One of the drivers of PIAC’s rapid growth was a move to virtual conferences and more online content through webinars and member forums during the pandemic.
“One of the main benefits of membership is networking with your pension peers,” says PIAC Chair Sean Hewitt. “The pool has suddenly become both wider, expanding into new areas such as operations and deeper, as pension professionals become more specialized in fields such as risk, ESG and alternative asset classes.”
New! PIAC DC Retirement Planning Tools Report
The DC Committee conducted two surveys on the effectiveness of Retirement Planning Tools.
A shorter survey was completed by eight small and mid-sized DC plan sponsors on due diligence, satisfaction with the calculator (for members and plan sponsors) and member engagement.
A longer, more comprehensive survey was completed by all the major record keepers and two large DC plans. This portion of the survey focused on forecasting methods, plan sponsor customization, model assumptions, asset mix considerations, contribution rates, the output of tools and how they are presented and decumulation. The report highlights favourable features of retirement planning tools, as well as areas of improvement.
A summary of Regulatory Guidance in Canada and an analysis of how the tools measure up were provided. The report also compares Canada with Australia and examines the benefits and drawbacks of Australia’s regulatory approach.
The survey was conducted in Fall 2021 by Martin Belanger, Tom Keenleyside, Roman Kosarenko and Jill Taylor Smith as a special project of PIAC’s DC Committee.
Read the report here.
Questioning Quant Quality - Featured PIAC Communiqué Article
This article challenges plans to re-think the Quality factor of quant investing, or at least question its forward-looking efficacy. It asks: Are there fundamental factors that are handsomely and consistently rewarded within the perfect foresight framework? If such factors exist, it would imply that markets consider these factors (as opposed to Gross Profits to Assets) in rendering future price decisions. The thesis is that if plans can diagnose these forward-looking alpha factors and then channel them in a broad systematic manner, they might finally have a quantitative portfolio that captures a fundamental philosophy. Read the full issue to learn about a new PIAC Leverage Paper, a recap of regulatory developments for DC plans. a look at OCIO performance and how to manage the volatility of infrastructure investments. Read the newsletter here
OCIOs will Crash Pension Plans - But Plan Sponsors Would Too - Featured PIAC Communiqué Article
Three conclusions are presented in this article: 1) People respond to incentives (including OCIOs), so plan sponsors should consider how revenues and cost structures impact behaviours and then address any potential conflicts of interest; 2) Plan sponsors should consider enhancing active management guardrails to better oversee their OCIO’s activities and their investment performance; and 3) As a plan sponsor, consider ways to be more risk-aware, policy-focused, and more effective in the asset allocation process. Read the newsletter here
T+1 Changeover Developments & Capital Market Participants Survey
The move to shorten the settlement cycle from T+2 to T+1 in Canada and the US is progressing rapidly as the CCMA prepares systems for the changeover, which is aimed at reducing costs, risks and collateral requirements among other benefits. As part of this initiative, the CCMA is asking that market participants complete a survey posted on the PIAC website. This section of the website also includes CCMA FAQ, a List of Assets Moving to T+1 and the Time to Talk CCMA Newsletter.: To access the survey and the resources, click here.
Regional Council Meetings on Now Across Canada
Join your peers in your region for an informal, open discussion on current topics and 'what's keeping you up at night'. The lunches are held via Zoom and begin at 12:00 noon local time.
Ottawa - June 13
Manitoba and BC: June 14
Toronto and Calgary: June 15
Saskatchewan - June 16
Edmonton - June 20
Atlantic - June 22
Quebec - Date TBD
Register for the meetings here
New PIAC Resource on Leverage
This paper, created by PIAC's Risk Management Committee, outlines what leverage is, various strategies and how they are used, considerations around mitigation of risk and questions to ask external managers when conducting due diligence. Leverage is often associated with higher risk, which is understandable if the use of leverage is only associated with increasing exposure to a specific risky asset. However, many pension plans use leverage strategies, especially to efficiently modulate exposure to risk factors without disrupting the asset allocation, for risk management purposes in an asset-liability framework or for constructing optimally diversified portfolios. There may be a wide range of leverage strategies and the appropriate strategy will depend on the objectives and constraints targeted. View the article here.
PIAC In the News
Benefits Canada covered PIAC’s response to OSFI’s proposed changes to its risk management guidelines on May 17, 2022. The article referenced PIAC’s responses to the 15 points posed by OSFI and quoted PIAC’s main position: “The most important feedback we can provide is that given the varying degrees of inherent risk in pension plans, the ultimate guidance from OSFI and other regulators needs to be principles-based and flexible enough to [be] cost-effectively implemented by smaller plans [with less than $500 million in assets under management] and yet still relevant to the very large plans [with more than $40 billion in AUM].” View the article here.
PIAC 2021 Annual Report
PIAC’s 2021 Annual Report was presented at its AGM on Friday, May 13 2022. The report features updates from the Chair of the Board, the Executive Director and each of PIAC’s Committees. It also contains updates on Advocacy Submissions, Education and Networking Events, Awards, the Audited Financial Statements and the composition of the Board of Directors. The Report is being made public to tell PIAC’s story to smaller pension plans who may have not considered participating in the past. Read the Annual Report here.
OSFI Pension Investment Risk Management Consultation
On May 12, 2022 PIAC responded to the OSFI consultation on pension investment risk management. The approach to investment risk management varies across PIAC’s membership based on the size of the plan, funding levels, maturity, asset-liability mismatch, cash flow and investment portfolio complexity. PIAC believes the guidance needs to be principles-based and flexible enough to be cost-effectively implemented by smaller plans and yet still relevant to the very large plans and all those in between. PIAC commented on 15 specific questions and outlined its four main principles on risk appetite statements, risk limits and their measurement and risk reporting. Read the Full Submission Here
PIAC in the News: Head to Head: What's the Best Type of Default Fund for a DC Plan?
As the default funds in defined contribution plans evolve, two experts weigh in on the merits of the best type of default for DC plans. Olivia Mitchell, Director of the Pension Research Council at the Wharton School takes a more traditional view on TDFs while Roman Kosarenko, Director of Pension Investments at George Weston Ltd. who sits on the PIAC Board and DC Committee, looks a little farther into the future.
Managing Geopolitical Risks - Potential Framework and Ideas for a Complex World - Featured Session - Spring Virtual Conference
In this session, three speakers from Willis Towers Watson will discuss how to Measure, Manage, and Mitigate (M3) geopolitical risks and propose a potential framework to evaluate opportunities within the current macro-economic and geopolitical context. The session will be moderated by PIAC Chair Sean Hewitt. The PIAC 2022 Spring Virtual Conference is being held between noon and 4:30 Eastern on May 17 - 18. The last day to register is Friday, May 13. The full program is available to PIAC members on the website. The cost to reserve your place is only $250 and many funds have signed up for the unlimited group member rate of $1,000. Educational presentations and breakout sessions are scheduled on hot topics ranging from climate and energy to digital currency, inflation and infrastructure. Free-flowing discussion groups and networking opportunities in an open, sales-free environment make PIAC conferences completely unique in the industry. Conference Registration
Communiqué Spring 2022 Now Out!
The Spring Issue contains a variety of well-researched articles full of wit, insight and practical advice on issues ranging from the OCIO dilemma and leverage to regulatory developments for DC plans, a look at quant quality and how to manage the volatility of infrastructure investments. The newsletter also has its regular features: A Member Profile on Francois Quinty at VIA Rail, a profile of the Communique Committee, recent advocacy submissions, a Call for Board Nominations, a summary of webinars available on the website, and an exciting program for the upcoming Spring 2022 Virtual Conference. Read the newsletter here.
Submission on Unfair Tax Treatment for Target Date Funds
On April 27, 2022, PIAC submitted a letter to Finance Canada on tax treatment inequities for members of DC arrangements in Canada. At present, plan sponsors cannot merge target date funds that have reached their expected year of retirement with existing retirement funds with the same asset allocation for decumulation purposes without triggering capital gains for taxation. Allowing tax-free mergers of maturing target date funds would allow for operational efficiencies, economies of scale and lower fees, that would ultimately mean that Canadian retirees retire with higher incomes. This would be consistent with many forms of tax-free mergers and spin-offs permitted for public corporations in Canada. Read the Full Submission Here
History has a lot to say about Today's Energy Shock - Featured Session - Spring Virtual Conference
Vladimir Putin’s bloody invasion of Ukraine will create a turning point for all types of intentional affairs. When it comes to energy, Mr. Putin’s war will undoubtedly change the future. At uncertain times like now, past events can help provide a foundation for thinking about what could happen next. For energy markets, you need to revisit the oil shocks of the 1970s to find a situation with any resemblance to today’s energy crisis. Based on history, what should we expect? How do these events impact the pace of the energy transition to clean energy? What are the implications for investment? Jackie Forrest, Executive Director, ARC Energy Research Institute, will answer these questions and more. The PIAC Spring Conference will be held virtually between noon and 5 PM each day on May 17 - 18, 2022. Join us for two days of education, discussion and networking on current trends and emerging issues with a focus on practical implementation and tools plans can use on a day-to-day basis. Conference Registration
Use of Technology in Infrastructure - Featured Session - Spring Virtual Conference
Evolving technologies and societal imperatives have driven significant changes in infrastructure assets and investing in recent years. That evolution continues to unfold in real-time across the infrastructure spectrum, touching on the energy, communication, transportation and other subsectors. This workshop session will provide insights on how these developments are shaping the opportunity set for investors and the implications for existing infrastructure portfolios. The PIAC Spring Conference will be held virtually between noon and 5 PM each day on May 17 - 18, 2022. Join us for two days of education, discussion and networking on current trends and emerging issues with a focus on practical implementation and tools plans can use on a day-to-day basis. Conference Registration
Investing in a Changing World: Inflation, Rising Rates & Conflict - Featured Session - Spring Virtual Conference
Investors were already facing down high levels of inflation and a shift toward monetary tightening by central banks. Now the Russian invasion of Ukraine has compounded existing inflationary pressures, added a new layer of uncertainty and risk, and ushered in big geopolitical changes that could reorient the postwar economic order in major ways. In this session, Fred will discuss how Bridgewater is processing the war as an investor, the implications of deglobalization and the weaponization of finance, and the risk that growing stagflationary pressures present for portfolios. PIAC members are invited to join their pension colleagues from across the country in a virtual format for two days on May 17 – 18, 2022 of education, discussion and networking on a range of hot topics ranging from climate and other ESG issues, to the impacts of geopolitical events on investment, inflation, infrastructure, annuities and digital currency. . Conference Registration
The Invisible Rules: What's Holding Women Back in Business (and How to Fix It) - Featured Session - Spring Virtual Conference
Women today continue to be poorly represented in the senior management and executive ranks of corporate Canada, despite the fact that they represent the majority of university graduates. The question is, why? Based on direct input from 50 senior female leaders from across Canada, this panel discussion will expose "the invisible rules" that continue to tilt the playing field in favour of white men, show ambitious women how they can get ahead without compromising their true selves, and introduce practical actions that leaders (and male leaders, in particular) can take in order to make true gender equity in the workforce a reality. The co-authors of The Invisible Rules will be joined by Dawn Jia, President and Chief Executive Officer, UBC Investment Management Trust and moderator Michelle Ostermann, Senior Vice President and Global Head of Capital Markets, PSP Investments. PIAC members are invited to join their pension colleagues from across the country in a virtual format for two days on May 17 – 18, 2022 of education, discussion and networking on a range of hot topics ranging from climate and other ESG issues, to the impacts of geopolitical events on investment, inflation, infrastructure, annuities and digital currency. Conference Registration
An Institutional Approach to Investing in Digital Assets - Featured Session - Spring Virtual Conference
This session from the experts at Galaxy Digital will look at how institutional investors are investing in crypto/digital assets space, including the rise of venture capital investment in crypto/blockchain (crypto Infrastructure, Web3, DAOs, Metaverse, NFT’s) startups in 2021. The session will also address crypto disruption/disintermediation and the potential impacts on mainstream financial systems. The PIAC Spring Conference will be held virtually between noon and 5 PM each day on May 17 - 18, 2022. Join us for two days of education, discussion and networking. Stay tuned for the full agenda featuring sessions on current trends and emerging issues with a focus on practical implementation and new tools and ideas plans can use on a day-to-day basis. Registration is $250 per person or $1,000 for an unlimited number from your fund. . Conference Registration
Bank of Canada / OSFI Climate Risk Strategy - Featured Session - Spring Virtual Conference
This breakout session will focus on fostering confidence in Canada's financial system by ensuring federally regulated financial institutions prepare for managing their climate-related financial risks. The presentation will feature Miguel Molico, Senior Director, Climate Analysis, Financial Stability Department (FSD), Bank of Canada and Stephane Tardif, Managing Director, Office of the Superintendent of Financial Institutions in Canada and will be moderated by Grace Wong, Senior Portfolio Manager, External Portfolios, at Canada Post. Registration is $250 per person or $1,000 for an unlimited number from your fund. Conference Registration
Registration Open Now for Spring Virtual Conference
Reserve your place at the table on May 17 - 18, 2002! Registration is now open for the PIAC Spring Conference, which will be held virtually between Noon and 5 PM each day on May 17 - 18, 2022. Join us for two days of education, discussion and networking. The conference planning committee is busy putting together an exciting agenda of sessions on current trends and emerging issues with a focus on practical implementation and new tools and ideas plans can use on a day-to-day basis. Registration is $250 per person or $1,000 for an unlimited number from your fund. Conference Registration
PIAC Risk Budgeting Tool - PIAC Winter 2022 Communiqué Featured Article
This new tool was developed by John McNair, of PIAC's Risk Management Committee, to help members assess how risk is allocated across asset classes. It can be used to optimize portfolio allocations constrained on risk ranges and help with setting risk targets and risk appetite statements. Read the article here
Comments on Proposed SEC Rule 10B-1: Position Reporting of Large Security-Based Swap Positions
On March 18, 2022, PIAC made a submission to the Securities and Exchange Commission on its proposed rule 10B-1: Position Reporting of Large Security Based Swap Positions (File No. S7-32-10). In its 9-page submission, PIAC proposed that: (1) the SBS regulations should create a reporting party waterfall, whereby securities based swap dealers or swap dealers should report SBS transactions if facing parties that are non-dealers; (2) any SBS reporting on a T+1 basis available to the general public should not disclose the identity of the parties holding such positions; (3) the SEC might consider using swap data repositories for SBS reporting, as the swap reporting infrastructure already exists in many jurisdictions; and (4) if requiring PIAC members to directly report via EDGAR and without anonymity, the SEC should consider (i) for equities / SBS referencing equities, a substantial shareholder reporting limit of 5% (aggregated across derivatives and physical securities) having similar reporting timelines as currently apply to pension plans that are not seeking to exercise control (13G timelines) and (ii) the proposed dollar limits within this proposed Rule should be narrowly focused on CDS (or narrow basket CDS), where substantial shareholder reporting thresholds do not currently apply. Read the Full Submission Here
Darin Eddy Profiled in Winter 2022 Communiqué
This edition of Communiqué turns the spotlight on Darin Eddy, CFA Public Markets at Halifax Regional Municipality (HRM) Pension Plan in Halifax. PIAC had a fireside chat with Darin, who shared some wonderful insights about himself, his career, and his views on managing the assets of a small to mid-sized pension plan. Read the article here
Portfolio Implications in a Post-COVID World: Winter 2022 Communiqué Featured Article
Traditional multi-asset portfolios have benefitted from robust returns in both fixed income and equity markets over the last several years. However, the outlook for these asset classes remains somewhat challenged heading into 2022. This argues for increased exposure to non-traditional sources of income, including diversified credit and real asset strategies that exhibit low correlations to traditional asset classes, stability in the portfolio setting, and generate more competitive income streams. Real asset strategies, including real estate, infrastructure, and agriculture provide protection against higher inflation, which is an important consideration given the longer-term inflation forecast. Read the article here
Decumulation Solutions for Managing Longevity Risk: PIAC Winter 2022 Communiqué Featured Article
The innovative solutions offered or proposed by Purpose Investments, Common Wealth and Blackrock suggest that it is possible to achieve longevity protection in a capital accumulation plan and that it can be done with a solution that is simple for participants to understand, alongside other existing investment options. The article written by Martin Belanger and Nikki Keating reviews the solutions to allow plan sponsors to assess which one is the best fit for them and their members. Read the article here
Submission on the CSA Proposed National Instrument 93-101 - Derivatives: Business Conduct
On March 3, 2022, PIAC commented on four key areas of the CSA on its Proposed National Instrument 93-101 – Derivatives: Business Conduct: (1) the accompanying Companion Policy should clarify that a party will not be viewed to be in the business of trading in derivatives (acting as derivatives dealer) if the only applicable factor is that they are carrying out the derivative trading activity with repetition, regularity or continuity and where they are facing a dealer in those trades; (2) the Companion Policy should clarify that receiving option or derivative premiums will not be viewed as “transacting with the intention of being compensated”; (3) certain short-term foreign exchange contracts or instruments in the wholesale foreign exchange market should be included within the scope of the Proposed Regulations; and (4) the CSA has done a commendable job in addressing fair dealing and conflict of interest requirements.
Click here for the full submission.
PIAC Spring Conference to be Held Virtually
PIAC's Spring Conference will be held virtually on May 17 - 18 between 12 noon and 5:00 PM Eastern. The conference planning committee is working to bring you plenary and break-out sessions focused on top-of-mind issues in the industry. Stay tuned for the full conference program and registration to open. We are hoping to hold the Fall Conference in person in Calgary.
Federal Pre-Budget Submission
On February 28, 2022, PIAC commented on the federal budget consultation:
- Funding Rule Reform. PIAC advocated harmonizing with the many jurisdictions that have moved to a going-concern plus model in the interest of promoting the maintenance of DB plans.
- Solvency Reserve Accounts (SRA). PIAC supported the proposed regime including allowing retroactive application, flexibility for legal structure, disclosure to members and other specific requirements.
- ESG. PIAC noted the proliferation of reporting standards and regulatory proposals, including mandatory disclosure of GHG emissions from the CSA and SEC, that help investors consider climate change risk and other ESG factors. PIAC requested guidance affirming that the consideration of these factors in the investment process is consistent within a fiduciary framework for pension plan management. PIAC called for principles-based guidance that is not overly prescriptive.
- Variable Payment Life Annuities (VPLAs). PIAC commended the government for continuing to facilitate VPLAs. PIAC recommended broadening access by revising the PRPP framework to enable individual membership, provide more flexibility with price controls at the early stages of roll-out and enabling decumulation-only longevity pools.
- Prevention of Regulatory Arbitrage. PIAC supported providing OSFI with the authority to regulate federally registered Capital Accumulation Plans. The regulatory burden and a mistaken view that the employer has no fiduciary responsibility administering a CAP plan is leading to the continued displacement of DC plans. The CAPSA guideline is the only existing piece of quasi-regulation, but it has never been tested in courts, and no provincial regulator has explicit authority to regulate CAP plans.
- Unclaimed Balances. PIAC continued to recommend establishing an opt-in fund to deposit unclaimed balances of missing members, or alternatively a death registry. This will allow for greater efficiencies in plan administration. maintenance of proper member records and a central location for missing member benefits.
Click here for the full submission.
PIAC Winter 2022 Communiqué Featured Article: The Social Dimensions of ESG - A Focus on Human Rights for Investors
This article focuses in on the seldom-discussed 'S' aspect of ESG, in the first of a series of articles on social issues that will be featured in the newsletter over the coming months. In this issue, Miekela Singh from Ontario Teachers' and PIAC's Investor Stewardship Committee, provides a brief overview of responsibilities investors and corporations have with respect to human rights impacts. Topics covered include the UN Guiding Principles on Business and Human Rights, an overview of the global regulatory landscape and a list of helpful investor resources. This is the first article on emerging ESG issues featured in the newsletter. Read the article here.
PIAC Responsible Investment Survey Getting Noticed
The Pension Benefits Monitor and the University of Toronto News have picked up on the results of PIAC’s Responsible Investment Survey noting continued gains in momentum in RI practices. “In the survey, we see improvements across all categories, including policy development, environmental, social, and governance (ESG) integration, proxy voting, engagement, and participation in collaborative initiatives,” says Lu Yao, associate portfolio manager, public equities, at UTAM. She sits on PIAC’s Investor Stewardship Committee and helped develop the Responsible Investment survey and analyze the results, together with Laura Song and Anne-Marie Monette.
The survey found 87.5 percent reported they have implemented a responsible investment policy or similar guidelines. In 2018, only 65 percent had an RI policy. ESG integration was the most widely implemented responsible investment strategy, used by 90 percent of respondents. Environmental and social (ES) considerations also factored into proxy voting decisions, with 90 percent of respondents including ES in proxy voting policies, compared to 45 percent in 2018.
PIAC Survey Shows Responsible Investing has Momentum, says UTAM’s Lu Yao – University of Toronto News, February 14, 2022
RI Practices Gain Momentum - Pension & Benefits Monitor, February 16, 2022
CSA Consultation on Disclosure Requirements on Climate-Related Matters for Reporting Issuers
On February 16, 2022, PIAC made a submission to the CSA on Proposed National Instrument 51-107 Disclosure of Climate-Related Matters. PIAC commended the CSA’s efforts to facilitate the disclosure of consistent, comparable and reliable information on climate change.
PIAC advocated for the mandatory annual disclosure for all issuers of Scope 1 and Scope 2 GHG emissions. PIAC recognized that measurement and disclosure of Scope 3 emissions can be more challenging but should also be disclosed. GHG emissions reporting should be accompanied by an independent assurance on the accuracy, completeness and consistency of the data.
PIAC asked the CSA to reconsider its position to not require scenario analysis. PIAC advocated for a phased-in approach, on a comply or explain basis. Since not all issuers have developed these capabilities, the CSA can vary requirements for reporting based on the material risk they face (higher standards should apply to larger firms) and provide guidance to issuers based on the recommendations of the TCFD.
While the proposed disclosures would not be mandatory until 2024 at the earliest, investor expectations and regulatory requirements elsewhere in the world are growing rapidly. To ensure the Canadian capital markets remain globally competitive, PIAC requested a frequent review and update of these disclosure requirements.
Click here for the full submission.
PIAC Responsible Investment Survey Getting Noticed
The Pension Benefits Monitor and the University of Toronto News have picked up on the results of PIAC’s Responsible Investment Survey noting continued gains in momentum in RI practices. “In the survey, we see improvements across all categories, including policy development, environmental, social, and governance (ESG) integration, proxy voting, engagement, and participation in collaborative initiatives,” says Lu Yao, associate portfolio manager, public equities, at UTAM. She sits on PIAC’s Investor Stewardship Committee and helped develop the Responsible Investment survey and analyze the results, together with Laura Song and Anne-Marie Monette.
The survey found 87.5 percent reported they have implemented a responsible investment policy or similar guidelines. In 2018, only 65 percent had an RI policy. ESG integration was the most widely implemented responsible investment strategy, used by 90 percent of respondents. Environmental and social (ES) considerations also factored into proxy voting decisions, with 90 percent of respondents including ES in proxy voting policies, compared to 45 percent in 2018.
Here are the links to the articles:
PIAC Survey Shows Responsible Investing has Momentum, says UTAM’s Lu Yao – University of Toronto News, February 14, 2022
RI Practices Gain Momentum - Pension & Benefits Monitor, February 16, 2022
PIAC Welcomes UPS Investments
UPS Investments, the pension plan for UPS employees in Canada has joined PIAC. UPS’s pension professionals now have access to the wealth of confidential resources generated by the PIAC’s 100+ volunteer leaders and a network of over 850 experts managing over $2.5 Trillion in AUM.
PIAC Welcomes Public Service Pension Plan
The Public Service Pension Plan, the pension plan for employees of the Alberta government and other public services organizations, has joined PIAC. PSPP’s pension professionals now have access to the wealth of confidential resources generated by the PIAC’s 100+ volunteer leaders and a network of over 850 experts managing over $2.5 Trillion in AUM.
PIAC to Focus on Growing Membership in 2022 says New Board Member
The Pension Investment Association of Canada board is prioritizing a return to business as usual and the expansion of the association’s membership in 2022. The board will continue efforts to expand the PIAC’s membership and increase the engagement of existing members, says Cheryl Shea, manager of pension assets at Canadian Pacific Railway Co. and a recently appointed member of the association’s board. According to Shea, who first became involved with the association early in her career, the PIAC offers many benefits to members of Canada’s pension investment community. “From my perspective, [joining the PIAC] helps you build a network. It’s a really good place to find out how other people are approaching similar challenges. It also gives you access to fantastic content and resources that is curated by your peers, making it exceptionally relevant.” Read the Benefits Canada announcement HERE. Also read: PIAC appoints Sean Hewitt, Graeme Hay as new officers for 2022
Winter 2022 Communique - The ESG Issue
The lead article in the Winter Issue addresses the rarely discussed 'S' - or 'Social' aspect of ESG. This is followed by an article on how to sort through the 'alphabet soup' of 'E' issues now coming to the forefront, a summary of the results of PIAC's triennial Responsible Investment survey and a guide to a helpful new toolkit for managing climate risk.
Another important new PIAC resource is the new Risk Budgeting Tool. The issue is rounded out by articles on post-COVID portfolio impacts and an evaluation of new decumulation solutions being offered for DC plans to help manage longevity risk.
The newsletter also has its regular features, ranging from a Member Profile on Darin Eddy, at the Halifax Regional Municipality Pension Plan and a profile of the Member Services Committee, to recent advocacy submissions, announcements on the 2022 PIAC Board of Directors, the year 2021 by the numbers and highlights from the Fall Virtual Conference. Read the full issue HERE.
PIAC Announces 2022 Officers
The Pension Investment Association of Canada is pleased to announce the new Officers for 2022
Chair: Sean Hewitt,
Vice-Chair: Graeme Hay,
Secretary-Treasurer: Gemma Gillis
Past Chair: Natasha Trainor
Congratulations to everyone on their appointments.
Cheryl Shea Joins PIAC Board
PIAC is pleased to announce Cheryl Shea, Manager, Pension Assets at the Canadian Pacific Railway Company, has accepted the nomination to join the Board of Directors of PIAC. Cheryl previously served as a Director between 2016 and 2017 and was active on the DC Committee for many years before leaving Nova Chemicals to work at Mercer. She is known as an eloquent speaker at PIAC conferences. Throughout her more than two decade career in pensions, Cheryl has been an active participant in the evolution of DC plans in Canada, with a keen interest in the decumulation phase. Welcome to the Board Cheryl!
PIAC 2020 Asset & Returns Survey Published
The final results from the 2020 Asset & Returns Survey are posted. The 2021 survey will be released in the early Spring. At that time, we will be asking all member funds to complete the survey, which is a requirement of membership in PIAC and a highly valued industry benchmark. View the survey here.
PIAC 2021 Responsible Investing Survey Results
PIAC has released to members the results of its 2021 survey on their approach to responsible investment and stewardship. Highlights included broad adoption by participants of an RI policy or similar guidelines, with only 12.5 % of respondents indicating they had not yet implemented similar policies. Among the RI strategies, ESG integration was by far the most widely used, followed by negative screening. Results also indicated that a majority monitor and assess external managers on ESG considerations in their selection process, including ESG questions in due diligence questionnaires. For direct investment activities, climate change remained the leading theme integrated in investment decisions, which was also evidenced by broad support for the TCFD. Climate change strategies have also emerged as a common theme for over 20% of survey participants, while a majority of respondents had yet to establish net-zero targets. View the survey here.
PIAC Risk Survey - View the Full Results
Every three years, PIAC conducts its Member Risk Survey. The last time it was conducted was in 2019 and the results were sent to all funds who participated. In advance of releasing the new survey in early 2022, PIAC is providing the full results to all PIAC members. Please contact the office to suggest any edits or improvements to the survey or to add questions covering new areas of interest. View the survey here.
PIAC Risk Budgeting Tool
The PIAC Risk Management Committee has developed a Risk Budgeting Tool (“RBT”) for its members that helps assess how risk is “allocated” across asset classes. The tool can disaggregate risk over multiple time horizons and across multiple risk dimensions (Standard Deviation, Active Risk, Surplus Risk and Factor Risk). Users can also opt-out from using historical returns for the analysis and use their own expectations as inputs. The tool can also be used to optimize portfolio allocations constrained on risk ranges. Finally, studying the major/minor contributors to risk over multiple time periods and horizons can help with setting risk targets and/or risk appetite statements. Access the resource here
Fall 2021 Communiqué Featured Article: Member Profile on Emily O'Donohue
Emily works within Corporate Affairs at Ontario Teachers', where she oversees all regulatory and legal aspects related to derivatives transactions and derivatives-related financial markets regulation. Emily was one of the first lawyers with derivatives expertise hired by a major pension plan in Canada. She joined the pension sector when Ontario Teachers’ recognized the need to bring in-house expertise to guide the plan through an increasingly complex legal and regulatory environment. Since she started working at Ontario Teachers’ 10 years ago, she has been very active in helping to shape the regulatory environment by participating in several domestic and international derivative reform initiatives, from the International Swaps and Derivatives Association general meetings to work with the Canadian Market Infrastructure Committee and the Canadian Securities Administrators. Read the article here.
Fall 2021 Communiqué Featured Article: Back-to-the-Office Poll
Thirty funds (about 25% of PIAC’s membership) responded to a quick poll on how they are operating as we learn to live with COVID. The poll looked specifically at how funds intend to address working from home vs from the office, vaccine mandates and changes to office infrastructure to manage COVID risk. Read the article here.
PIAC Fall 2021 Communiqué Featured Article: Fixed Income EM for Canadian Investors
In a world with low yields for longer, allocators will have to look increasingly towards non-traditional asset classes in order to achieve the yield and diversification benefits that government fixed income has traditionally delivered. This article discusses the emerging market fixed income asset class, the potential opportunity set, and select risk/return characteristics from the perspective of a Canadian investor. Read the article here.
PIAC Fall 2021 Communiqué Featured Article: Fixed Income in a World After COVID
While most of the economic damage wrought by the pandemic is likely to be fleeting in nature, there are two structural changes brought about by the pandemic that are likely to persist: public debt levels are set to be permanently higher than otherwise, and interest rates will likely remain permanently lower than they would have been absent a pandemic. This means that fixed income investors must operate in a significantly altered and more challenging environment, one in which government bonds and even corporate credit may no longer provide a sufficient return to achieve investment objectives. This article addresses the challenges and opportunities faced by investors in this new world. Specifically, it examines three alternative approaches to traditional bond allocations – namely, core plus bonds, global bonds, and multi-asset credit – and considers how they may help certain types of investors better balance their long-term risk/return objectives.
Read the article here.:
Ontario Finance on PBA Regulation 909: Removing Requirements for DC Plan Administrators
On November 15, 2021, PIAC made a submission to Ontario Finance on its proposed amendments to Ontario Regulation 909 of the Pension Benefits Act: Removing Certain Requirements for Administrators of Defined Contribution Pension Plans. PIAC supported removing the requirements for member-directed DC plans to establish SIPPs and to file audited annual financial statements (while providing the CEO of FSRA with the authority to request one). DC plans would continue to file unaudited annual financial statements. PIAC asked that all member-directed DC plans be captured, including any DC member-directed components of DB plans. Read the Full Submission.
Fall Communiqué Out Now!
The Fall cover focuses on how PIAC’s diverse and rapidly growing membership is and extends an invitation to members to become more active in the association by volunteering for one of a number of committees, including the newsletter committee that brings you thoughtful articles each quarter. Fall’s lead articles are focused on Fixed Income. One focuses on opportunities and challenges in this space after COVID and the other looks at the asset class from an Emerging Markets perspective. The results of a recent Quick Poll on Back to the Office highlights how your colleagues are addressing the 'new normal'. The newsletter also has its regular features, ranging from a Member Profile on Emily O'Donohue at Ontario Teachers' and a Committee Profile on Investment Practices, to recent advocacy submissions, new members and links to industry resources, including a new page devoted to ESG issues. Read the full issue.
Navigating through the New Global Minimum Tax Rules: PIAC Tax Conference Featured Session
PIAC's Tax Conference will be held between 12:30 and 5:00 PM Eastern on November 10. This session focuses on the OECD BEPS 2.0 pillar 2 minimum tax proposals, including the GloBE and the subject to tax rule. The session will address the latest insight into scope and timing in different countries, with a focus on the issues for Canadian pension funds at the fund, holding company and portfolio investment level. The event will feature a series of presentations from industry experts, an open member forum discussion and opportunities to network with your tax pension colleagues across the country. Registration is $125 per person (plus GST/HST). Click here to register and for the full conference program. Click here for the full program and to register.
Registration Open for PIAC Virtual Tax Conference November 10, 2021
PIAC's Tax Conference will connect pension tax colleagues from across the country to hear from the sector's top minds on key issues. The conference will kick off with a Members’ Forum where delegates have the opportunity to share what is keeping them up at night and the issues they are dealing with. This will be followed by a session on the Current Tax Environment and Market Trends for Institutional Investment in Commercial Real Estate in the UK and Europe. In this presentation, a panel will outline how investors in the UK are responding to the UK’s response to BEPS, and an ever-widening tax base as the UK Treasury seek to raise more money from investment in UK real estate, notably by moving into tax-advantaged investment vehicles. The speakers will discuss the wider tax environment and increasing international efforts towards preventing tax avoidance, leading to investors increasing focus on the substance of their arrangements. Click here for the full program and to register.
Record-Setting Attendance at Fall Conference - Over 180 Members Attended
This week's Virtual Conference once again broke attendance records, as did our Spring event, with twice the number of delegates compared with prior years' in-person events held in the Fall. The event featured a fireside chat with PSP's CEO Neil Cunningham and plenary presentations on Cryptocurrencies, Gamification of Stock Markets and Investment Considerations Amid a Pandemic Recovery. Each day, delegates chose from four different breakout sessions covering a wide variety of key issues in pension investment, ESG, Risk and Alternatives for both DB and DC plans. All plenary and breakout sessions were recorded and will be posted to the website shortly. Thanks to everyone - the Conference Planning Committee, speakers and delegates - who made this year's event such a big success.
Nobel Prize Winner Bill Sharpe once said that decumulation is the nastiest, hardest problem in finance. Solutions that are flexible and can contribute to bequest objectives tend to lack the income guarantees that are crucial to mitigate longevity risk, while solutions with guaranteed income tend to be inflexible. Fortunately, the industry has been coming up with solutions that aim at providing income for life, but with some flexibility features and bequest possibilities. A panel of industry experts will discuss recent innovations in the field of decumulation, including Purpose Investments Longevity Fund, BlackRock LifePath Paycheck and a Guaranteed Lifetime Income solution jointly developed by Common Wealth and Brookfield Annuity. Click here for the full conference program and to register.
The Use of Leverage at a Plan Level - Virtual Conference Featured Session
Leverage as a portfolio tool continues to garner interest from allocators as a means to improve risk-adjusted returns in the context of their plan liabilities. In addition to explaining some of the benefits of leverage, this session turns to the important implementation challenges and considerations that one must grapple with to ensure leverage is utilized effectively. Topics covered include the tools available to instantiate leverage, governance considerations, and nuanced views about key due diligence items in selecting partners. Click here for the full conference program and to register.
Building Absolute Returns Portfolios - Virtual Conference Featured Session
Low prospective expected returns continue to drive interest in utilizing absolute return strategies to both generate enhanced returns and mitigate overall portfolio risks. Given the heterogeneity of the approaches available though, how does an allocator design and approach due diligence in constructing these portfolios? This session will offer a refresher for the “why” of absolute return vehicles given the capital market environment today, investigates key considerations of building an absolute return portfolio and challenges related to implementation and monitoring. Click here for the full conference program and to register.
The More Things Change, the More they Stay the Same - Exploring Home Country Bias in 2021 at the Fall Virtual Conference
It’s been over 15 years since the foreign property rule limit has been lifted for Canadian defined benefit plans, allowing sponsors to freely diversify their portfolios. In this time, investors have experienced Canadian dollar boom and bust cycles, a proliferation of global investment vehicles, two “once in a lifetime” recessions, and an increased focus of potential Environmental, Social, and Governance concerns stemming from their holdings. And the world in recent years has become less global, focusing on domestic independence. In this session our speakers will explore the current state of home country bias both in Canada and globally, and address if securities’ domicile continues to impact how institutional investors allocate capital to public, private and real assets. Click here for the full conference program and to register.
Fall Conference Closing Plenary - Investment Implications Amid a Pandemic Recovery
Each decade appears to have its own investment themes and secular drivers that underlie return generation and risk. 2021 has already seen a start and stop of one investment rotation (i.e., growth to value and increasing interest rates), and 2020 witnessed major pivots in macroeconomic policy amidst the pandemic that will have medium and long-term implications. What themes are likely to be important during the decade, and how do allocators position for this? Is this finally the decade where the traditional 60/40 policy portfolio fails to deliver? These topics, and others will be covered during this session . Click here for the full conference program and to register.
Communiqué Member Profile: Gilles Horrobin, Chief Investment Officer, Société de Transport de Montréal (STM)
Gilles is responsible for leading a team of 15 investment professionals across all asset classes and developing and implementing the strategic asset strategy to meet the plan’s long-term return objectives. STM pension plans (approximately $6 billion AUM) employ an active investment approach, with in-house management and expertise in several asset classes, including public equities and fixed income assets with approximately 70% of plan assets internally managed. Over his 20 year career at STM, first as head of equities and then as CIO, Gilles says his biggest accomplishment is his ability to attract and retain a talented team, which has delivered a strong long-term track record. PIAC's Summer 2021 issue also features thought-provoking articles on Cryptocurrencies, the Case for Tactical Fixed Income Portfolios, the Tobacco-Free Finance Pledge and the Impact of Inflation and Rising Rates on Real Estate. Read the Full Article.
Fall Conference to Feature Session on Digital Assets: The Evolution of Cryptocurrencies and Decentralized Finance
In this plenary presentation, Steve Kurz, Head of Asset Management, and Scott Army, CIO of Galaxy Vision Hill, will provide attendees with a background on the rise of digital assets, blockchain, and decentralize finance. They will share their thoughts on the trends in the space and why investors should consider learning and investing in the asset class. Click here for the full conference program and to register.
Summer 2021 Communiqué FEATURE ARTICLE: Inflation and Rising Rates - Friend or Foe of Real Estate Returns?
With U.S. consumer prices running at a 5% annual rate for the 12 months ending May 2021 (and an even greater 7% annualized rate over the past six months), many are questioning whether the economy is at the beginning of a protracted rise in inflation that will compel the Federal Reserve to lift its policy rate. But higher inflation and an increase in nominal rates is not always negative for interest rate-sensitive assets such as real estate, as this article demonstrates. PIAC's Summer 2021 issue also features thought-provoking articles on Cryptocurrencies, the Case for Tactical Fixed Income Portfolios and the Tobacco-Free Finance Pledge. Read the Full Article.
2021 Fall Virtual Conference Featured Session - A Comprehensive Overview of Currency Hedging from a Canadian Perspective
First Quadrant’s Dori Levanoni will cover topics including optimal hedge ratios, more granular approaches to managing currency risk as well as implementation and operational considerations. The Fall 2021 Virtual Conference on October 19 – 20 will connect pension colleagues from across the country virtually to hear from the sector’s top minds, including PSP President & CEO Neil Cunningham, and participate in networking forums and breakout discussions on a wide variety of key issues and interesting new emerging topics in pension investment, ESG, risk and alternatives for both DB and DC plans. Click here for the full conference program and to register.
Summer 2021 Communiqué FEATURE ARTICLE: Tobacco-Free Finance Pledge
Desjardins Group and the CMPA are signatories of the Tobacco-Free Finance Pledge. In this article, they discuss the impact of tobacco, the Tobacco-Free Finance Pledge, the reasons their organizations signed the Pledge, and steps to help other institutions implement a tobacco-free portfolio. PIAC's Summer 2021 issue also features thought-provoking articles on Cryptocurrencies, the case for tactical fixed income portfolios and the impact of inflation and rising rates on Real Estate. An in-depth analysis of the annual PIAC Asset & Returns survey highlights trends, overall performance and allocations across different asset classes. The newsletter also has its regular features, ranging from a Member Profile on Gilles Horrobin at STM and a Committee Profile on Defined Contribution, to recent advocacy statements, new members and links to industry resources. You'll also find highlights from our first ever Virtual Conference and upcoming events, including the Fall Conference October 19 - 20. Read the Full Article.
Join the Conversation: Listen, Learn, Speak Up, Be Heard
Registration is now open for the Fall 2021 Virtual Conference. The event will connect pension colleagues from across the country virtually to hear from the sector’s top minds, including PSP President & CEO Neil Cunningham, and participate in networking forums and breakout discussions on a wide variety of key issues and interesting new emerging topics in pension investment, ESG, risk and alternatives for both DB and DC plans. Registration is $250 per member or $1,000 per fund (unlimited number of delegates). Only PIAC members are able to attend. Register Here.
PIAC 2021 Virtual Conference Featured Session - Farmland Investing
In this breakout session, Joelle Faulkner, CEO and Founder of Area One Farms, will provide attendees with an introduction to the asset class and discuss the many approaches to investing in the space and the variety of favourable features that farmland offers, including diversification, correlation to inflation, cash yield, and ESG characteristics. Click here for the full conference program.
Summer 2021 Communiqué FEATURE ARTICLE: The Case for Tactical Fixed Income Portfolios
For the past forty years, fixed income has experienced a secular bull run of declining yields and rising prices. Investors could rely on a rigid portfolio of investment-grade bonds to produce stable returns while offering an attractive risk profile. However, in our current low yield environment, institutional investors would benefit from looking towards new solutions to help them reach their return targets, while enjoying the diversification and risk benefits that the asset class has to offer. Tactical bond portfolios with the flexibility to generate alpha through multiple levers, the ability to expeditiously implement investment decisions, and manipulate risk based on the market environment should be considered. PIAC's Summer 2021 issue also features thought-provoking articles on Cryptocurrencies, Tobacco-Free Portfolios and the Impact of Inflation and Rising Rates on Real Estate. View the full issue.
PIAC 2021 Virtual Conference Featured Session - Insatiable Short-Termism and the Gamification of Stock Markets: Does it Matter to Serious Investors?
Financial ‘innovation’ and online trading by retail investors has once again moved centre-stage. Those who treat financial markets simply as a venue for gambling are driving headlines and huge volatility in certain asset prices without any serious rationale. This has almost nothing to do with the fundamental (and societally useful) business of capital allocation for real wealth creation. So what does it mean for serious investors? Stuart will argue that while such activity can have some real-world consequences, this is a game we can simply choose not to play. Click here for the full conference program.
Responsible Investment Survey Launched
Every three years, PIAC conducts a survey to assess the practices of members in respect to responsible investment activities such as Proxy Voting, ESG Integration, Plan Member Engagement and Climate Change. There have been many changes in these areas since the survey was last conducted in 2018 so members’ feedback is highly valued. The information collected is used for benchmarking purposes and to assess the needs of PIAC members in respect to responsible investment resources, tools and educational events. The anonymized results will be shared with the membership who may find this information useful in implementing their own ESG policies and procedures. The deadline is Friday, September 10, 2021. Complete the Survey
Summer 2021 Communiqué FEATURE ARTICLE
Cryptocurrencies - Consensus Digital Currency: An Emerging Asset Class?
The authors take on this hotly debated topic by explaining the terminology and the reasoning behind the argument in favour of investing in cryptocurrencies as a new asset class. The article points out that the creation of the digital asset technological infrastructure is largely underway and the beginning stages of adoption are taking place. It discusses why governments are not able to outlaw cryptocurrency. The authors ask: If fixed-issuance cryptocurrencies were accepted as an asset class and, therefore, as a store of value, why should not this store of value be equivalent in capitalization or value to other stores of value? They conclude that as a form of basic insurance against the persistent collapse, whether fast or slow, of the world’s fiat currencies, consensus digital money, those with non-inflationary monetary policies – appropriately sized to account for the risk – is an important feature in client portfolios. As viewed from a historical perspective, the authors maintain, it is the ultimate conservative investment. View the article
PIAC DC Retirement Planning Tools Survey
Tell us your approach to and satisfaction with the existing tools
PIAC's DC Committee is looking for member’s input on retirement planning tools to determine the different options available and how happy DC plan sponsors are with the existing tools. This will inform a more detailed survey that was sent separately to the major recordkeepers and a few large plan sponsors on the assumptions they used in building their retirement planning tools. The survey is open to all member funds with a DC plan component. This survey should take 10 minutes to complete and will close August 20, 2021. The committee will present the results of its research in a webinar, article or white paper. Click here to access the survey.
Neil Cunningham, President & CEO of PSP Investments to Address PIAC
Neil Cunningham has been announced as a keynote speaker at PIAC's Fall Conference on October 29 - 20, 2021. The event will connect pension colleagues from across the country virtually to hear from the sector’s top minds and participate in networking forums and breakout discussions on a wide variety of key issues and interesting new emerging topics in pension investment, ESG, risk and alternatives for both DB and DC plans. Registration will open shortly.
PIAC Welcomes University Pension Plan Ontario
The University Pension Plan Ontario has joined PIAC. UPP’s pension professionals now have access to the wealth of confidential resources generated by the PIAC’s 100+ volunteer leaders and a network of over 850 experts managing over $2.5 Trillion in AUM. .
The University Pension Plan Ontario has joined PIAC. UPP’s pension professionals now have access to the wealth of confidential resources generated by the PIAC’s 100+ volunteer leaders and a network of over 850 experts managing over $2.5 Trillion in AUM. .
Summer Reading – New Issue of Communiqué OUT NOW
PIAC’s Summer 2021 issue features thought-provoking articles on Cryptocurrencies, Fixed Income, Tobacco-Free Portfolios and the impact of inflation and rising rates on Real Estate. An in-depth analysis of the annual PIAC Asset & Returns Survey highlights trends, overall performance and allocations across different asset classes. The newsletter also has its regular features, ranging from a Member Profile on Gilles Horrobin at STM and a Committee Profile on Defined Contribution, to recent advocacy submissions, new members and links to industry resources. You'll also find highlights from our first ever Virtual Conference and upcoming events, including the Fall Conference October 19 - 20.
PIAC Releases 2020 Asset Mix Report
The annual PIAC DB Asset Mix Report has been released for the year ending December 31, 2020. PIAC members reported $2.454 Trillion CAD in assets under management, up 7.4% from prior year (2019 - $2.286T). PIAC members also have access to an analysis of plan details, asset mix exposures, and performance. Click here to view the reports.
Communiqué Member Profile - Roman Kosarenko
Many PIAC members know Roman either through his active involvement with PIAC or have met him at various industry events. He is a seasoned pension professional who has worked mostly on the corporate pension side. This profile details his two-decade journey to his current position as Senior Director, Pensions at George Weston. The Spring 2021 issue also features articles on Preparing Portfolios for Higher Inflation, Monitoring Target Date Funds and Ecommerce, plus regular features, ranging from a Committee Profile on Investor Stewardship, to recent advocacy submissions, new members and links to industry resources.
SEC Consultation on Climate Change Disclosures
On June 14, 2021, PIAC made a submission to the US Securities and Exchange Commission on its consideration of climate change disclosures. PIAC supported disclosure rules that would mandate enhanced disclosure of not just climate risk, but of ESG factors more broadly. A combination of qualitative and quantitative disclosure that leverages the TCFD recommendations and the SASB frameworks would ensure disclosure of material ESG issues using industry specific metrics. This industry perspective ensures materiality and proportionality in disclosure requirements and should not create excessive burden on issuers. This submission builds on PIAC’s previous letter regarding Reg S-K in 2016. Click HERE for full submission.
Standing Committee on Industry, Science and Technology on C-253
On June 10, 2021, PIAC made a submission to the Standing Committee on Industry, Science and Technology on its current review of Bill C-253. PIAC did not support a super-priority for unfunded pension liabilities and employee post-retirement benefits in the event of bankruptcy. Preferred creditor status for unfunded pension liabilities would impact the cost and availability of credit for companies with DB plans and put them at a disadvantage relative to competitors without DB plans. This may lead some companies to re-assess the strategic value of sponsoring a DB plan. There is limited published work on the impact on beneficiaries of plan terminations from insolvencies so it is difficult to assess the potential benefits of introducing a measure that could lead to the further decline of DB plans in the private sector. Click HERE to read the full submission.
Saskatchewan Solvency Funding Review
On June 8, 2021, PIAC commented on Saskatchewan’s Review of the Pension Funding Framework for Single Employer Defined Benefit Plans in the Private Sector. PIAC strongly supports the reform of long-term, minimum funding rules. As PIAC has repeatedly stated, Canadian pension jurisdictions need one funding rule, as opposed to one going-concern funding rule and one plan termination (solvency) funding rule. Funding should be based on a going-concern “plus” model and eliminate solvency requirements except for an 85% plan-wind-up-funding ratio floor. There should be consistency across jurisdictions to promote regulatory harmonization. In its seven-page response, PIAC addressed questions on the following issues: Solvency Reserve Accounts (SRAs); use of PfADs to mitigate risks; allowing contribution holidays when a plan is fully funded; and support for the statutory discharge of liability for plans where annuity buy-outs occur. Click HERE to read the full submission.
PIAC Welcomes Ville de Laval
The Régime de retraite des employés de la Ville de Laval has joined PIAC. Laval’s pension professionals now have access to the wealth of confidential resources generated by the PIAC’s 100+ volunteer leaders and a network of over 800+ experts managing over $2.2 Trillion in AUM. Click HERE more information on PIAC membership.
PIAC Honours Julie Cays with the Chuck Harvie Distinguished Service Award
PIAC has presented its highest honour, the Chuck Harvie Distinguished Service Award, to Julie Cays at the 2021 AGM.
Julie’s career has taken her from CIBC to HOOPP to CAAT, where she recently retired from her role as Chief Investment Officer. Julie has a long record of volunteering and participating at conferences. She has been an active participant on practically every committee over the years. Julie also served two terms on the Board of Directors from 2007 to 2013, rotating up through the officer positions, Chairing the Audit and Finance Committee, the Tactical Planning Session and the Governance & Nominating Committee. This award is just a small token of how much she has inspired and mentored others and guided the direction of PIAC throughout her career.
“PIAC has been so important to the Canadian pension investment space for so long,” said Julie. “It’s been pivotal in bringing the Canadian pension investment world up to the calibre it is globally. It’s wonderful that there are 800 plus members now because it’s such a great organization.”
Sean Kulik Receives PIAC’s Terry Staples Volunteer of the Year Award
After reviewing a list of more than 100 dedicated volunteers, Sean Kulik’s outstanding commitment over the past several years made him an obvious choice for PIAC’s Terry Staples Volunteer of the Year Award.
Sean, who is Managing Director, Investments, Nunavut Trust and Chair, PIAC Asset & Returns Working Group, spearheaded a complete overhaul of the annual Asset & Returns Survey over the past two years that has led to improvements in accuracy, utility and completeness. He hosted webinars for two consecutive years to show members how to input data into the new survey. To further ensure more consistent reporting, Sean also organized a webinar on the CFA Institute’s Global Investment Performance Standards. He created a new dashboard to help members analyze and present the data generated by the survey and hosted a webinar on how to get the most out of this new tool. He then wrote an in-depth summary explaining the key takeaways.
While leading the ongoing work on the survey, he joined the Member Services Committee where he wrote a report on the results of the 2020 External Manager Survey - the first time this had ever been done. He has also become a member of the Alternatives Working Group where he is currently lining up webinars on Farmland and Cryptocurrencies.
Spring 2021 Communiqué OUT NOW
PIAC’s Spring 2021 issue leads off with three great articles offering practical advice and market analysis for DB and DC plans. The newsletter also has its regular features, ranging from a Member Profile on Roman Kosarenko at George Weston and a Committee Profile on Investor Stewardship, to recent advocacy submissions, new members and links to industry resources. You'll also find information on our first ever Virtual Conference, taking place next month on June 1 and 2.
Register for PIAC Virtual Conference June 1 - 2, 2021
Lessons from the Capital Allocator Podcasts
Ted Seides reviews some of the most important lessons he’s learned from the first 150 episodes of his podcast, Capital Allocators, and how these lessons can be applied to small, medium and large sized pension funds. Ted joins a lineup of high calibre presenters at PIAC's first virtual conference, which will also feature world-renowned economist and former bank governor Mark Carney and President and CEO of OMERS, Blake Hutcheson. In addition to presentations by industry thought-leaders such as Ted, Mark and Blake, PIAC’s conference will connect pension colleagues from across the country during networking forums and breakout discussions on a variety of top-of-mind issues.
National Volunteer Week - Celebrating PIAC Volunteers
National Volunteer Week is April 18-24, 2021, and the theme this year, The Value of One, The Power of Many, reflects on the awe-inspiring acts of kindness by millions of individuals AND the magic that happens when we work together towards a common purpose. PIAC owes a debt of gratitude to all the 100+ volunteers that have given tirelessly of their time, talents, energy, and expertise over this past year. Thank you to all our Volunteers! We simply couldn’t complete this work without your support. With busy lives, it can be hard to find time to volunteer. However, the benefits of volunteering can be extremely rewarding. It can help enrich friendships, connections within the community, learn new skills, and even advance your career. While it’s true that the more you volunteer, the more benefits you’ll experience, volunteering doesn’t have to involve a long-term commitment or take a huge amount of time. If you are interested in becoming a PIAC Volunteer, please click here to find out how to get involved. Thank you to all our volunteers!
President and CEO of OMERS, Blake Hutcheson has joined the lineup of presenters at PIAC's first virtual conference on June 1-2, which will also feature world-renowned economist and former bank governor Mark Carney.
As President and CEO, Blake is responsible for the overall leadership and performance of the OMERS enterprise. He was appointed OMERS President and Chief Pension Officer in 2018. His mandate included leading OMERS pension business, Strategy, Communications & Public Affairs, Legal, Technology and Operations, in addition to Asset Liability Management. Blake previously served as President and CEO of Oxford Properties Group since 2010, and in 2014 he also became Chief Investment Officer, Real Estate and Strategic Investments and added the OMERS Platform Investments portfolio, an integral part of the OMERS innovative agenda.
In addition to presentations by industry thought-leaders such as Blake and Mark, PIAC’s conference will connect pension colleagues from across the country during networking forums and breakout discussions on a variety of top-of-mind issues. Mark your calendar now and look for more details and registration to open in the coming weeks.
Mark Carney to Address PIAC Conference
World-renowned economist and former bank governor Mark Carney has joined the line-up of presenters at PIAC’s virtual conference June 1 – 2, 2021. Mark’s new book Values: Building a Better World is being called, "a bold and urgent argument on the radical, foundational change that is required if we are to build an economy and society based not on market values but on human values."
Mark served as the Governor of the Bank of England from 2013 to 2020, and prior to that as Governor of the Bank of Canada from 2008 until 2013. In his role as Vice Chair, Head of ESG and Impact Fund Investing at Brookfield Asset Management, Mark is focused on the development of products for investors that combine positive social and environmental outcomes with strong risk-adjusted returns
In addition to presentations by industry thought-leaders, PIAC’s conference will connect pension colleagues from across the country during networking forums and breakout discussions on a variety of top-of-mind issues.
Winter 2021 Communiqué MEMBER PROFILE
Edmond Assal, Director, Advisory Investment Policies at the Caisse de dépôt et placement du Québec (CDPQ)
Edmond discusses his career trajectory, how his department supports CDPQ’s oversight of more than 40 retirement and insurance plans, the challenges of the COVID-19 pandemic, including conducting virtual meetings with clients and working remotely, the greatest risks facing Canadian pension plans right now and the value of the thriving team culture at CDPQ. He also shares a humorous anecdote from a PIAC webinar he hosted and answers a lightning round of light-hearted questions.
A Data Resolution for 2021
The Adopting Data Standards Initiative (ADS) is an industry nonprofit wanting to bring forward a common reporting language, or data standard, for GPs, LPs, and providers. Such a reporting language could be leveraged across private capital: private equity, real estate, debt, venture, and infrastructure .
Response to Alberta Pensions Questionnaire
On February 25, 2021, PIAC responded to the Actuarial Standards Board (ASB)’s consultation on commuted values during periods where bond yields are negative. PIAC agreed that the existing formula for estimated r7 is inappropriate if i7 becomes negative and particularly if iL approaches zero. If the formula for r7 is modified, PIAC recommended a full review of Options 9i and 9ii. PIAC opposed a permanent change during the current abnormal period, and preferred Option 9i as a temporary solution. Changes to the formulas in subsection 354 will create a burden for plan administrators because of the need to update pension administration systems, processes, and communications. PIAC advocated in favour of a major standard review and commended the Designated Group for flagging these concerns.
Read the full submission
Winter 2021 Communiqué FEATURED ARTICLE
Where Behaviour and TDF Design Meet
This article provides three insights into how real-world participant saving and withdrawal patterns can help optimize glide paths for stronger retirement outcome potential. J.P. Morgan's research over the past decade into how real-world participant saving and withdrawal patterns can interact with target date fund (TDF) design to shape retirement outcome potential has found behaviours to be much more varied and volatile than many TDF providers assume in their asset allocation models. The average participant saves too little, many take loans and most quickly withdraw assets after retiring. These patterns may have significant ramifications on a glide path’s ability to withstand the rigors of real-life retirement investing.
Submission to ASB on Determination of Pension Commuted Values in Economic Environments Where Bond Yields are Negative
Read the full submission
Winter 2021 Communiqué FEATURED ARTICLE
COVID Effect: Financial and Economic Measure Infographics
PIAC's Risk Management Committee compiled several charts on the market experience in the past 20 years to provide a basis of understanding the potential path to recovery from the COVID-19 pandemic - is it L-shaped, V, W, K-shaped? Is this time different? The charts outline market movement over several significant events, including the 2000 dot-com crash, SARS, the Great Recession of 2008 and in 2020 the COVID lockdown. The reaction of market in each significant event and new industry sector development may bring insights for members to formulate their investment and funding strategy in 2021 taking into consideration the risk appetite and circumstances of each plan.
Winter 2021 Communiqué FEATURED ARTICLE
Sustainable Development Goals Gain Traction with Investors
The trend towards ESG investing and SDGs is likely not going away. We are witnessing governments around the world looking at ways to incentivize and encourage ESG investing, including Canada. The first step is to get educated and explore the many ways that the SDGs are influencing investment trends, writes Jennifer Coulson, Vice President, ESG at BCI and member of PIAC's Investor Stewardship Committee.
Low Volatility Strategies: Navigating an unprecedented era of equity market distortion
2020 was an extraordinary year in many ways. More dimensions of risk associated with exposure to low volatility stocks have become evident. Whilst global equity markets, in particular in the U.S. and Emerging Markets, have exhibited extreme amounts of performance dispersion at the stock, industry and country level, further exogenous shocks and influences of post-pandemic recovery, more stimulus programs, policy changes from President Biden, Brexit and U.S.- China tensions continue to present future uncertainties. Low volatility strategies as a category will continue to play a vital role in an overall allocation that seeks to maximize long-term risk-adjusted return. But for methodologies to continue to satisfy this role, they will need to perpetually evolve to be able to integrate new ways of managing risks.
Read the newsletter
PIAC’s Winter 2021 issue is one of the largest ever, encompassing over 40 pages of topical content for funds of all types and sizes. In addition to eight main articles, the newsletter also has its regular features, ranging from a Member Profile on Edmond Assal at the CDPQ and a Committee Profile on Risk Management, to upcoming events, recent advocacy submissions, new members and links to industry resources on a wide variety of topics for DB and DC plans.
Read the newsletter
Roman Kosarenko, Martin Belanger and Kamila Giesbrecht have prepared a paper outlining key OCIO issues that pension plan sponsors need to consider when considering the OCIO model. The paper noted that just like with any other provider to the plan, the plan sponsor remains responsible for:
Read the report
PIAC Releases Results of 2020 External Manager Survey
The results of the 2020 PIAC External Manager Survey are now available. The survey features changes designed to enhance coverage of available asset class and style exposures and to allow for greater analysis of the results. Sean Kulik of PIAC’s Member Services Committee noted that participation increased dramatically with 1,470 managers listed as compared to 963 in the 2017 survey.
Those plans who participated may click here to log in to the website and see the results.
For those plans who have not yet participated, the survey form is still available here. If you complete the survey your fund will gain access to the results.
Consultation on Strengthening Federally Regulated Private Pension Plans
On January 14, 2021, PIAC commented on the federal Consultation Paper “Strengthening Canadians’ Retirement Security”. The seven-page response provided the rationale behind PIAC’s positions in these areas:
- Temporary Relief Measures. While PIAC supported the measures, the need for repeated rounds of temporary relief over the past decade is indicative of a pressing need for fundamental reform to the federal solvency rules and harmonization among jurisdictions.
- Plan Governance and Administration. PIAC opposed the proposal to require plan member and retiree representation for all plans. PIAC noted most of its members already have established governance and policies.
- Environmental, Social and Governance Factors. Because of their potential financial impacts on plan investments, PIAC agreed it is within the scope of its members’ roles as fiduciaries to consider ESG, including climate change, in their investment processes and disclosures.
- Solvency Reserve Accounts. PIAC supported the proposal with a more flexible approach to funding.
- Variable Payment Life Annuities. PIAC supported legislative amendments to facilitate the introduction of VPLAs.
- Ministerial Guidelines for Defined Benefit Plan Sponsors. PIAC supported the proposed guidelines on the process for seeking special funding relief.
- Restrictions on Borrowing. While not raised in the consultation, PIAC recommended that the federal government permanently remove the restriction on borrowing by pension plans.
Read the full submission
Submission to CAPSA on Guideline No. 7 – Pension Plan Funding Policy
On January 8, 2021 PIAC supported the draft guidelines and the inclusion of alternative plan designs, such as target pension arrangements. PIAC further agreed with CAPSA’s non-prescriptive approach.
Read the full submission
Asif Haque Joins PIAC Board
Asif Haque, Managing Director, Investments at CAAT Pension Plan, has joined the PIAC Board of Directors. Asif also serves as Chair of PIAC’s Member Services Committee. He has over 25 years of experience in finance and investments and is a member of the Investment Committee of the Pension Plan of the United Church of Canada.
Natasha Trainor is PIAC’s 2021 Board Chair
Natasha Trainor is the 2021 Chair of the PIAC Board of Directors. Natasha is the Director of Pension Investments for NAV CANADA where she leads a team of investment professionals in support of investment, risk and reporting activities for approximately $7 billion in pension assets across the spectrum of asset classes. Prior to moving to Ottawa, Natasha was the Chief Investment Officer at Provident10, where she was responsible for the oversight and strategic direction of Newfoundland and Labrador’s public service pension plan.
PIAC Releases Updated Corporate Governance Principles & Guidelines
A ground-breaking document when first published in 1993, the Principles & Guidelines are updated every three years to reflect changes in best practices. This revision has placed increased emphasis on the importance of Diversity & Inclusion as well as on the continued evolution regarding Environmental, Social, and Governance (ESG) factors.
The application of these Principles and Guidelines by PIAC members to the public companies in which they invest will assist in improving corporate governance, enhancing long-term shareholder value, and increasing confidence in capital markets.
Read the Corporate Governance Principles & Guidelines
Submission to the Ontario Securities Commission on its 2021-2022 Statement of Priorities
On December 11, 2020 PIAC submitted a response to the OSC’s proposed 2021-2022 Statement of Priorities. While generally supportive of the proposals to promote fair and efficient capital markets, PIAC noted more emphasis is needed to foster greater progress in key areas such as corporate governance, reporting and disclosures of ESG risks, say-on-pay, and diversity.
- ESG: Considering a recent announcement from the CEOs of Canada’s eight largest pension plans and new federal commitments, PIAC believes the OSC should develop concise regulations for ESG and climate change disclosure, which could reduce the burden to issuers given the many disparate disclosure frameworks that exist.
- Diversity on Boards and the Executive: PIAC advocated including in its priorities BIPOC individuals and for clear direction on the OSC’s expectations for transparency regarding issuers’ practices to achieve gender equality.
- Say on Pay: PIAC has consistently requested that the OSC include mandatory Say on Pay in its priorities in support of its goals to be an effective and responsive securities regulator, to align with international best practice standards and anticipated CBCA amendments, and to elevate investor confidence. Canada remains the only G7 country without a comprehensive requirement for Say on Pay on the ballot.
Read the full submission
Submission to FSRA on Asset Transfers
On December 2, 2020, PIAC responded to FSRA’s consultation on its draft Supervisory Approach to Asset Transfers under the Pension Benefits Act. PIAC supported the proposal and offered suggestions to further improve the draft guidance in three key areas:
- PIAC agrees with a consistent approach to Notices of Intended Decisions across all types of asset transfers but has a number of concerns over the 10-day notice period.
- Policy already requires the consent of each pension regulator so it is unclear why FSRA would need a more detailed review where an asset transfer application includes multiple pension plans or members in other pension jurisdictions. PIAC called for improvements to the 2020 Agreement Respecting Multi-Jurisdictional Pension Plans to reduce interprovincial barriers and red tape.
- FSRA’s public postings on approved variances should be broad in scope to avoid disclosure of sensitive information about individual transfers.
Read the full submission
ASB Consultation on Part 3000 Benefits Security, Meaningful Stress Testing and Pension Plans
On November 27, 2020, PIAC responded to a consultation by the Canadian Institute of Actuaries’ (CIA) Actuarial Standards Board (ASB) on its Quinquennial Review of Part 3000. PIAC focused on three areas:
- Benefits Security
PIAC stated that the meaning of benefits security, and any mandated disclosures and related calculations are a public policy issue for law makers and regulators and not the responsibility of the ASB. “Going concern plus” funding is an appropriate and adequate measure to ensure the long-term funding of DB plans.
- Meaningful Stress Testing
Stress testing standards should be principles-based and involve a risk review by the actuary and plan sponsor(s) / administrator. PIAC offered to assist the CIA in developing educational materials to help actuaries understand leverage, its inherent risks, and its impact on the expected return on assets and in turn on the discount rate; as well as the valuation methods for many of the privately traded alternative asset classes and their impact on smoothing of the value of these assets.
- Pension Plans
In hypothetical wind-up valuations, PIAC raised the concern that disclosure of a worst-case scenario on wind-up (such as a bankruptcy) will likely lead to disclosure and communication challenges for plan sponsors with their employees and plan members. Moreover, there is the potential for unintended consequences whereby the disclosure of the scenario motivates regulators to use it as a minimum actuarial standard to calculate transfer value ratios, which would ultimately lead to higher costs for plan sponsors.
Read the full submission
PSAB Review of Section PS 3250 Retirement Benefits
On November 4, 2020, PIAC provided comments to the Public Sector Accounting Board on its review of Section PS 3250, Retirement Benefits and proposed changes to discount rate guidance and deferral provisions. PIAC highlighted three concerns:
- PSAB has indicated it will align its standards with the International Public Sector Accounting Standards, however Canada’s public sector pension model is unique and recognized as a global leader. PIAC urged PSAB to deviate from these standards when considering how public sector entities should account for pension obligations.
- Increased volatility in public sector financial statements may result from a new requirement to measure pension obligations using discount rates related to the yield on high quality corporate bonds. This will result in higher valuation of pension obligations than the ultimate cost under the funding model. PIAC further recommended that PSAB standards encourage transparency and accountability by government decision-makers.
- The proposed standards are administratively complex and could result in additional costs to public pension plan administrators, sponsors, and members as well as governments.
Read the full submissionPIAC Welcomes 700th Member
PIAC’s Member Services Committee Chair, Asif Haque, has welcomed our 700th member, Karen Chen! Karen is the Manager, Pensions & Retiree Benefits at Teck Resources Limited, based in Vancouver. She has her FCIA and FSA. “We look forward to Karen’s participation”, says Mr. Haque, “and to meeting her once we are allowed to hold in-person events again.”
Response to OSFI on its Guide for Preparation of Actuarial Reports for DB Plans
On October 13, 2020, PIAC commented on OSFI’s proposed Instruction Guide for the Preparation of Actuarial Reports for Defined Benefit Pension Plans. PIAC outlined in detail its concerns regarding changes in the determination of liability values using the replicating portfolio approach, and a supervisory cap on the going concern discount rate. Both issues particularly impact PIAC’s federally regulated plans. PIAC questioned the timing of both proposals, which put further pressure on resources at a time when the cash could be reinvested in businesses and the economic recovery. PIAC re-iterated the urgent need to reform pension funding rules at the federal level, which PIAC has sought for many years, given the record low interest rates and weak growth outlook due to COVID-19. PIAC urged the federal government to follow the direction of the larger provinces by moving to a single going-concern funding regime.
Read the full submission
On September 16, 2020 PIAC commented on FSRA's draft Principles and Practices Regarding Missing Members . PIAC supported the transfer of unlocatable members’ assets on plan wind up and automatic small benefit unlocking where FSRA has appointed an administrator. The increase of the small benefit threshold and a discharge for benefits of missing members at a certain age was recommended. PIAC advocated for a vehicle that allows plans to s end money on behalf of unlocatable members so that the responsibility for these benefits rests with a government entity such as the Bank of Canada. PIAC encouraged the creation of a missing member registry and information sharing arrangements with governments. A waiver on sending statements for missing retired members would alleviate an administrative burden, but PIAC questioned the need for a waiver, since sending confidential pension information to an incorrect address may contravene the administrator’s duty of care .
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On September 7, 2020 PIAC commented on the draft recommendations of Ontario’s Capital Markets Modernization Taskforce. PIAC supported:
- Streamlining and consolidating disclosure
- Electronic delivery of documents required to be published under securities law requirements
- Improving corporate board diversity
- Requiring an annual advisory vote on executive compensation and Say on Pay
- Enhanced disclosure of material ESG information
PIAC opposed introducing a regulatory framework for proxy advisory firms and informal procedures to exclude shareholder proposals.
The submission outlined in detail the reasons for PIAC’s positions.
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PIAC Responds to NS PBA Regulations
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PIAC Crosses the 100 Volunteer Mark
Simon Fréchet, Chair of the Pension Investment Association of Canada, has welcomed John McNair, MSc. as PIAC’s newest volunteer. McNair has volunteered to serve on the Risk Management Committee. This is the first time in its 43 year history that PIAC has more than 100 volunteers active at the same time. Working in a diverse variety of committees, these volunteers are responsible for executing advocacy efforts, creating resources across pension administration, governance and investment areas, and developing education and networking events from coast to coast. In recent years the areas of activity have grown to cover DC plans, responsible investment, risk, tax, legal and more.
“PIAC was created as a self-help organization and with the tremendous growth and complexity of the pension sector, our members have continued to step up to share, connect and create,” said Fréchet. “Our volunteers tell us they get tremendous value from participating with peers from across types, sizes and geographies of plans.”
McNair has a long history with the pension sector, currently as Vice President, Investment Risk Management & Analytics at the Investment Management Corporation of Ontario and previous roles at the Ontario Pension Board and OMERS.
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