Since target-date funds were introduced to the Canadian market in the early 2000s, they’ve become the dominant investment choice for defined contribution pension plan members. The funds, which are balanced with dynamic asset mixes that adjust as members approach retirement, are offered in a series — typically, one fund for each five-year target retirement band — with each fund […]
The recent market turmoil caused by the coronavirus crisis has increased the focus on rebalancing decisions for many Canadian pension plans. As certain asset classes outperform others, a portfolio’s asset mix will drift overtime from its long-term targets. To ensure no significant divergence from the target, rebalancing triggers the sale of the strong performing asset […]
The last decade of persistently low interest rates, exacerbated by the coronavirus crisis, has created challenges for institutional investors looking to generate income on their bond investments. The challenge has been more acute for pension funds and foundations, who rely on bond investments to fund their ongoing benefit and program obligations. Moreover, indications from global […]
The novel coronavirus has introduced unprecedented volatility to financial markets and is taking its toll on pension plans. We’ve seen sharp corrections in most equity markets. At its lowest point in the correction to date, the S&P 500 lost 34 per cent of its value, from its peak in February. The TSX, which has also […]
In a recent expert column, I broke down the different components of fees for defined contribution plans. And now, I will explore the key fee drivers and strategies to help plan sponsors manage fee levels in DC plans. Managing these costs are imperative, as excessive fees may result in the significant impairment of DC member […]
Defined contribution pension plan fees have long been an area of significant risk for pension fiduciaries. Typically, a DC plan sponsor will negotiate fees for the plan and members will pay the bulk of those fees through asset-based fees charged on the investment funds. If the fees for the DC plan are excessive, the resulting […]
My last expert column piece looked at what outsourced chief investment officer, or OCIO, offerings look like for defined contribution plans. It also highlighted the various considerations in evaluating the fit of an OCIO solution for a particular plan sponsor. In this column, I’ll explore five key issues to consider when evaluating an OCIO provider […]
The term outsourced chief investment officer, or OCIO, describes a service offering or model, where an institutional investor delegates certain decision-making responsibilities to a third-party provider. Once the investor makes the original delegation, the OCIO provider makes ongoing decisions related to the investment and administration of the plan, within agreed upon parameters. Initially the OCIO […]
Outsourced chief investment officers, or OCIOs, are a service model where a pension plan sponsor or other institutional investor delegates certain decision-making responsibilities to a third party OCIO provider. Once the asset owner makes the original delegation, the OCIO implements, monitors and executes the investment and risk management strategies, within agreed upon parameters. Here are […]
Historically pension funds and other investors have tended to select investment managers based on their recent investment performance. This can lead to a pension fund consistently firing yesterday’s losers and hiring yesterday’s winners. By chasing past performance these investors are effectively buying portfolios at high asset values and selling portfolios at low asset values, a […]