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?

Give your opinion on the issue by commenting on this article or taking our poll.

Copyright © 2019 Transcontinental Media G.P. Originally published on benefitscanada.com

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Catherine MacDonald:

Servicing issues aside, if they can manage the funds on a low-cost basis then I would agree. Members will be well served by experienced money managers. Most regular joe’s wouldn’t know how to manage their money and will not want to have this responsibility. It’ll scare them!

Friday, March 04 at 5:17 pm | Reply

judith whytock:

In my opinion, if Cdn. pension fund mgrs. bought an 11% blocking position, in:
Suncor, Cenovus, IMO, and McCains Meats, they could vote “NO” on future buyouts of these companies, and save them for future generations of Cdns.
Also, if you invest overseas, you could stick to companies, such as Xstrata, Arcelor, Rio Tinto to keep tabs on Cdn. natural resource companies which have been sold to foreign owners.

Monday, March 07 at 5:43 pm | Reply

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