Monday, September 21, 2015

Canada Pension Plans do well. 19 ranked in the top 300

Reports on the pensions industry can be dull and they are usually overlooked. One such study published last week attracted few headlines yet offered wonderful insights.

The world’s 300 largest pension schemes, a study put together by Towers Watson, allowed interesting conclusions to be drawn on who owns the world’s retirement wealth – and what that says about how each country will meet future pension costs.

Canada’s Pension plans do well, we have 19 in the top 300 plans. Canadians who are in the following plans should be happy that their pensions are doing well compared to the rest of the world. 

There is debate on what to do with the Canada Pension Plan, I think, as the Canada Pension Plan is the 8th ranked plan in the world, we should be expanding this plan.

The Canada Pension Plan is described by Towers Watson as one of a number of Sovereign Pension Plan. Sovereign Wealth Funds (SWFs) are pools of assets owned and managed directly or indirectly by governments to achieve national objectives. 

They may be funded by: i) foreign exchange reserves; ii) the sale of scarce resources such as oil; or iii) from general tax and other revenue. There are a number of potential objectives of SWFs, which are not always easy to attribute to a particular fund; and some funds may have more than one of the distinguishable objectives. Some of these are: i) to diversify assets; ii) to get a better return on reserves; iii) to provide for pensions in the future; iv) to provide for future generations when natural resources run out; v) price stabilisation schemes; vi) to promote industrialisation; and vii) to promote strategic and political objectives.

These funds have raised concerns These funds have raised concerns about: i) financial stability, ii) corporate governance and iii) political interference and protectionism.

Public Pension Reserve Funds (PPRFs) have a more specific objective At the same time governments have formed other large pools of capital, in particular to finance public pensions, which are generally referred to as Public Pension Reserve Funds (PPRFs). There are two such types of funds: those set up and owned directly by government (Sovereign Pension Reserve Funds, or SPRFs) and those belonging to the social security system (Social Security Reserve Funds, or SSRFs). SPRFs may be considered a type of SWF with an exclusive mandate to finance future public pension expenditures. On the other hand, not all SSRFs may be considered SWFs. Some are legally independent of government and their balances are not integrated for national accounting purposes into the government accounts.

The Sovereign Wealth Fund Institute (SWFI) is a global organization designed to study sovereign wealth funds, public pensions, superannuation funds, central banks and other long-term public investors in the areas of investing, asset allocation, risk, governance, economics, policy, trade and other relevant issues

Pension plans ranks are below:
Rank Pension Name              Country      Assets (in Millions)

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