Canadian pension plans are the most transparent in the world, according to a new report by Top1000funds.com and CEM Benchmarking Inc.
The report, which uses data from public disclosures of pension plans in 15 countries, also ranked the five largest pension plans in each country in terms of the transparency of performance, costs and responsible investing.
Canadian pension funds scored best for governance transparency, with an average score of 94 in the category. According to the report, credit for the strength in governance may be owed to the commonalities in the governance structures used by Canadian plans.
“The biggest Canadian public funds collectively have a global reputation for superior performance and governance excellence is often cited as a key driver — the Maple model,” said the report. “The CEM benchmarking database provides empirical evidence that the Maple Model funds do indeed outperform over the long term.”
With an average score of 77 in the performance category, Canada placed second, behind the U.S. In terms of cost, Canadian pension funds received an average score of 64, placing third behind Dutch and Swiss plans. Canada also received the third highest average score — 70 per cent — for responsible investing, with the Netherlands placing first and Sweden second.
Overall, Canada’s average scores were higher than those of all the other countries in the report, which noted their metric failed to capture a number of areas where Canadian pension plans outperformed global peers.
“Canadian funds also excelled on communication dimensions that were not scored. Their annual reports were well organized, cohesive and packed with important information for stakeholders. The narratives typically went beyond just ‘what we do’ to add insights about ‘how we do things’ and ‘why we do it this way.’ They also realize that less can be more, making good use of infographics, summaries, pictures, charts and less text to add impact and keep readers engaged.”