This week, Michael Nobrega, CEO of the Ontario Municipal Employees Retirement System, went on the record saying that the government should open up the administration of the new pooled registered pension plans (PRPPs) to more than just “regulated financial institutions.”
“Right now, it’s insurance companies and the banks,” Nobrega told CTV. “I would suspect that the federal government would be wise to include a broader range of providers other than simply the banks and insurance companies, because pension funds do have the muscle and investment systems to do it.”
Is this something that pension funds should be doing?
Jim Leech, CEO of the Ontario Teachers’ Pension Plan, doesn’t see a problem with it, although it’s not something Teachers’ plans to take on.
“While we think it is a good idea that the large funds be permitted to participate in this market because it increases the alternatives available to the consumer,” he says, “our strategy is to focus 100% of our attention on our current membership. PRPPs aren’t core to this strategy, so we don’t currently intend to pursue this market.”
But other funds are up in the air on the issue.
“At this time t[the board]believes this is too new and have not taken a stance on the issue,” says a representative on behalf of the British Columbia Pension Corporation. “However, [the board] will continue to monitor and watch as things unfold.”
However, the BC Pension Corp. did add that, at this time, it “currently doesn’t have a mandate for this.”
What do you think? Are there benefits from pension funds getting in on offering these private pension funds? Is it a conflict of interest? Is it too early to tell?
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