Pension Pulse

The Ontario Municipal Employees Retirement System ( OMERS ) released its 2008 results today, emphasizing that it remains "top-quartile" among its peers (notes are mine): Today OMERS announced a negative 15.3 per cent total rate of return for 2008, compared with a positive 8.7 per cent total rate of return in 2007. In spite of the negative results in 2008, a positive average rate of return for the past five years of 6.9 per cent was realized which is in excess of OMERS five year average funding requirement and benchmark. [ Note: Beware of those who emphasize the ' positive average rate of return for the past five years' even when they're losing billions! It will take them five or more years to recoup those losses!] Net investment loss for 2008 totaled $8,013 million in 2008, compared with net investment income of $3,938 million a year earlier. The 2008 results place OMERS in the top quartile, both this year and over the past five year period according to a recent...

Last week, I read an article in the Financial Post on CIBC takes flak over chief's pension top-up : In an era when bank executives are handing back bonuses and directors are under pressure to show prudence in granting compensation, Canadian Imperial Bank of Commerce has angered some institutional investors by increasing chief executive Gerry McCaughey's pension payout by what could amount to several million dollars. The change is contained in the company's recently released proxy circular document in a series of notes that describe a bump-up in the maximum allowable compensation on which Mr. McCaughey's pension will be based to $2.3-million from $1.9-million. "That's in the millions of dollars over many years [of retirement]," said Doug Pearce, chief executive and chief investment officer of B.C. Investment Management Corp., which manages nearly $80-billion in assets including bank stocks on behalf of pensioners in British Columbia. "The boards hav...

It's Oscar weekend and Hollywood's elite will gather Sunday evening for the annual gala where we all wait to hear: "And the Oscar goes to...". But Hollywood has been upstaged this year by the financial fiasco and the real life drama of Wall Street crooks. A while ago I wrote a piece claiming that Madoff is the tip of the iceberg . It didn't take long for other cockroaches to come out from where they're hiding and get exposed. The latest "mini-Madoff" is another scumbag billionaire called Allen Stanford : They're already calling him Mini-Madoff, but Allen Stanford , the Texas tycoon whose alleged "massive, ongoing fraud" was shut down last week by the SEC, is a different character than Bernie. Madoff kept his operation secret; Stanford is a flamboyant figure who has actively courted top U.S. politicians. How did he keep up the charade for so long? For years, "Sir" Allen hired high-powered lawyers and lobbyists to inf...

There are few words that inflame passions on Wall Street like the "N" word. In fact, the word "nationalization" strikes fear at the heart of Wall Street "capitalistas" who will gladly accept government bailouts in the form of TARP, TALF or BARF , but don't you dare utter the "N" word in polite company on Wall Street. That's pure blasphemy! Speculation of bank nationalization prompted confusion and fear today : Speculation about possible bank nationalization by the U.S. government is driving down shares in the sector Friday. However, there's plenty of uncertainty of what nationalization would actually look like. Nationalization gives the U.S. government the power to control banks. That power could mean anything from taking control of the public shares to replacing existing management, installing a new board of directors and setting corporate strategy. But the lack of clarity surrounding nationalization has created confusion on what...