Pension Pulse

Jacqueline Nelson of the Globe and Mail reports, Ontario Teachers’ Pension Plan posts 13% return in 2015 : Ontario Teachers’ Pension Plan’s 13-per-cent rate of return in 2015 was buoyed by growth in its private market assets, where investing conditions have grown increasingly challenging. The pension plan, which supports 316,000 of the province’s teachers and retirees, earned $19.6-billion through all of its investments in a year peppered with deals – from toll roads to seniors’ housing. “This was the year of the privates, whether it’s real estate, private equity or infrastructure,” Ron Mock, chief executive officer of Teachers, told a media briefing on Wednesday. He noted that just a few years ago, fixed income had been a similar bright spot for the portfolio. Teachers’ private capital group posted a soaring 32.3-per-cent investment return in the 2015 calendar year. And infrastructure and real estate returned a collective 16 per cent in 2015. Each category exceeded the ben...

Barbara Shecter of the National Post reports, TD expects ‘next shoe to drop’ on Canadian banks’ relatively low oil loan provisions : Canadian banks are taking lower provisions for oil and gas related credit losses than their U.S. counterparts, prompting observers to dig into the reasons behind the trend. Reserves related to oil and gas loans held by U.S. banks are four to five times higher than those held by the Canadian banks, according to analysts at TD Securities, who believe accounting treatments and interpretations are, at least in part, behind the striking difference. In a note Tuesday, the TD analysts led by Mario Mendonca said loan quality within the portfolios could also be another reason, with historical loss trends suggesting Canadian banks are more conservative lenders. Still, they said there is more to than that, including how aggressive each country’s regulators are, and interpretations under two different accounting regimes: U.S. Generally Accepted Account...

Andy Blatchford of the Canadian Press reports, Next on the Finance Minister’s to do list: Get provinces to support a Canada Pension Plan expansion : With his first budget behind him, rookie Finance Minister Bill Morneau seems comfortable in his new surroundings — he’s even quick to highlight the symbolism of the boardroom artwork at his department’s headquarters. Morneau points to a series of framed pictures featuring etchings of $1 coins. The artist, he explains, flipped each of the loonies repeatedly to identify which might be considered the luckiest of the bunch. That coin, now encased, also hangs from the wall. “So, that’s the lucky loonie,” Morneau told The Canadian Press before a recent roundtable interview. “We thought that was an appropriate piece of art for the Finance Department.” Just days after tabling his maiden budget, good fortune seemed to be on the former Toronto businessman’s mind as he explained what his private-sector expertise brings to one of hi...

The Wall Street Journal reports, Chicago Pension Nightmare : The hits keep coming for Chicago Mayor Rahm Emanuel. On Thursday the Illinois Supreme Court struck down the city’s pension reform, which required city workers to chip in more to their retirement plans, raised the retirement age and cut back on cost-of-living adjustments. But there may be a silver lining for the fiscal basket case known as Illinois. The Illinois court said Chicago’s 2014 reforms violate a provision of the state constitution that bans diminishing existing pension benefits. This is legally debatable, but the court’s ruling wasn’t surprising since it had already knocked down state pension reforms signed by previous Governor Pat Quinn. The ruling further limits Mr. Emanuel’s fiscal options as pension payments take an ever-growing share of city revenues . On Thursday the gracious souls at the Chicago Teachers Union announced a one-day walkout on April 1. The CTU isn’t allowed to strike until this summer, b...

Barbara Shecter of the National Post reports, Ontario Teachers’ Pension Plan owns 39% stake in terror-targeted Brussels Airport : The terrorist attack in Brussels on Tuesday morning hit close to home for the Ontario Teachers’ Pension Plan. The pension fund owns 39 per cent of the Brussels Airport, a stake acquired in 2011. Two bombs went off at the airport while another exploded at a busy metro station. The combined death toll reached at least 30, and more than 200 were injured. “We are deeply saddened and shocked by the tragedy in Brussels and our thoughts are with all of those that have been affected,” said a statement posted on the Canadian pension fund’s website. It added that Teachers’ is “in close contact with Brussels Airport and the Belgium Government,” and that the pension fund is “providing whatever support we can.” Deborah Allan, a Teachers’ spokesperson, said there would be no further comment Tuesday. Other shareholders in Brussels Airport include Macquar...

Benefits Canada reports, AIMCo returns 9.1% in 2015 : Alberta Investment Management Corporation (AIMCo) has reported a 9.1% rate of return on its total assets under management for the year ending December 31, 2015. The pension fund earned more than $1.5 billion of active value-add return above benchmark and overall investment income of $7.5 billion on total assets under management of $90.2 billion. “I am very pleased with the terrific year of performance, especially against a backdrop of change and extreme volatility across the markets,” said Kevin Uebelein, chief executive officer. “AIMCo’s investment teams remained disciplined and focused on the long term, taking well-measured active risk positions, in-line with our investment strategies and our clients’ established needs. “That steady hand approach, and the support of the entire organization, allowed us to identify, and act upon, value-generating opportunities across all major asset classes. This result is further evidenc...