Two stories about the same subject, caught my atttention both were published on the same day. The first story came from Bloomberg.com and I think it was aimed at investors. The story started as follows:
Ontario Teachers’ Pension Plan, Canada’s third-biggest retirement-fund manager, posted an 11 percent return on investments in 2011, led by fixed income, private capital and infrastructure assets.
Performance was especially impressive given the market volatility and economic uncertainty that accompanied the Eurozone debt situation, and was compounded by last year’s natural disasters,” Chief Executive Officer Jim Leech said in the statement.
Ontario Teachers’ results beat the 0.5 percent return of Canadian pension funds last year, as estimated in a Jan. 23 report by RBC Dexia Investor Services Ltd.
In comparison, Canada’s biggest pension-fund manager, Caisse de Depot et Placement du Quebec, on Feb. 23 reported an annual return on investments of 4 percent. Ontario Municipal Employees Retirement System, a Toronto-based pension fund manager, said Feb. 24 it had a 3.2 percent return last year.
Near the end of the report Bloomberg said the following about the shortfall:
Canada’s benchmark S&P/TSX Composite Index fell 11 percent and the MSCI World Index declined 7.6 percent in 2011.
Ontario Teachers’ estimated funding shortfall narrowed to C$9.6 billion, from C$17.2 billion a year earlier, as persistent low real interest rates and changing demographic trends affect the plan.
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The second story on the same subject, was from the Globe and Mail. This story aimed at the general public, started as follows:
The Ontario Teachers’ Pension Plan had a $9.6-billion funding shortfall at the start of this year, despite recent contribution increases, benefit cuts, and solid investment returns.
The funding gap is symbolic of struggles across the pension sector, as plans grapple with low interest rates and lacklustre markets at the same time as the baby boomers hit retirement.
But Teachers’ announcement comes a week after Ontario Finance Minister Dwight Duncan made it clear that the province’s appetite for helping pensions climb out from under their shortfalls has decreased. He signalled that gaps will increasingly have to be addressed by contribution cuts as opposed to any aid from taxpayers.
Near the end of the article the Globe reported:
Mr. Leech emphasized to reporters in a press conference Tuesday morning that the plan is still funded to the tune of 94 per cent.
“This is not a crisis,” he said. “This is our tenth year that we have faced a preliminary deficit.”
The plan’s sponsors – the Ontario Teachers’ Federation and the provincial government – are required to bring the plan into balance every few years. They did so this past year, solving a deficit of more than $17-billion, and are not required to do so again until 2014. However, the government has signalled that it would like to tackle this year.
Which of the two stories would make the average person more nervous?
The conservatives and their supporters love to spread fear and make people feel anxious, so they can provide a solution. It is never a good idea to settle for one source when reading the mainstream media, always when possible find another source.
Ontario Teachers’ Pension Plan, Canada’s third-biggest retirement-fund manager, posted an 11 percent return on investments in 2011, led by fixed income, private capital and infrastructure assets.
Performance was especially impressive given the market volatility and economic uncertainty that accompanied the Eurozone debt situation, and was compounded by last year’s natural disasters,” Chief Executive Officer Jim Leech said in the statement.
Ontario Teachers’ results beat the 0.5 percent return of Canadian pension funds last year, as estimated in a Jan. 23 report by RBC Dexia Investor Services Ltd.
In comparison, Canada’s biggest pension-fund manager, Caisse de Depot et Placement du Quebec, on Feb. 23 reported an annual return on investments of 4 percent. Ontario Municipal Employees Retirement System, a Toronto-based pension fund manager, said Feb. 24 it had a 3.2 percent return last year.
Near the end of the report Bloomberg said the following about the shortfall:
Canada’s benchmark S&P/TSX Composite Index fell 11 percent and the MSCI World Index declined 7.6 percent in 2011.
Ontario Teachers’ estimated funding shortfall narrowed to C$9.6 billion, from C$17.2 billion a year earlier, as persistent low real interest rates and changing demographic trends affect the plan.
=======================================================================
The second story on the same subject, was from the Globe and Mail. This story aimed at the general public, started as follows:
The Ontario Teachers’ Pension Plan had a $9.6-billion funding shortfall at the start of this year, despite recent contribution increases, benefit cuts, and solid investment returns.
The funding gap is symbolic of struggles across the pension sector, as plans grapple with low interest rates and lacklustre markets at the same time as the baby boomers hit retirement.
But Teachers’ announcement comes a week after Ontario Finance Minister Dwight Duncan made it clear that the province’s appetite for helping pensions climb out from under their shortfalls has decreased. He signalled that gaps will increasingly have to be addressed by contribution cuts as opposed to any aid from taxpayers.
Near the end of the article the Globe reported:
Mr. Leech emphasized to reporters in a press conference Tuesday morning that the plan is still funded to the tune of 94 per cent.
“This is not a crisis,” he said. “This is our tenth year that we have faced a preliminary deficit.”
The plan’s sponsors – the Ontario Teachers’ Federation and the provincial government – are required to bring the plan into balance every few years. They did so this past year, solving a deficit of more than $17-billion, and are not required to do so again until 2014. However, the government has signalled that it would like to tackle this year.
Which of the two stories would make the average person more nervous?
The conservatives and their supporters love to spread fear and make people feel anxious, so they can provide a solution. It is never a good idea to settle for one source when reading the mainstream media, always when possible find another source.
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