Pension Pulse

Fiscal 2009 Portfolio Performance by Asset Class CPP FUND RETURNS Asset Class Fiscal 09* Fiscal 08* Canadian public equities -32.3% 3.2% Canadian private equities -7.8% 2.2% Public Foreign developed market equities -29.7% -13.9% Private Foreign developed market equities -17.8% 8.5% Public emerging market equities -32.6% N/A** Private emerging market equities -13.7% N/A** Bonds and money market securities 5.4% 6.9% Other debt -30.3% 0.3% Public real estate -43.7% -24.2% Private real estate -14.0% 8.2% Inflation-linked bonds 0.6% 9.3% Infrastructure -5.0% 23.6% Total CPP Fund -18.62% -0.29% * Investment results by asset class are reported on an unhedged Canadian dollar basis, since any hedging takes place at the Total CPP Fund level. Results are reported on a time-weighted basis. ** Returns for emerging market equities were included in foreign developed market equities in fiscal 2008. The Canada Pension Plan Investment Board, the country’s second-biggest public pension manager, reported ...

The WSJ reports that shortfall triples at U.S. pension guaranty agency : The federal agency that backstops corporate pension plans reported that its deficit tripled in the last six months, to $33.5 billion. Despite the shortfall, the agency said it has enough assets to pay benefits for many years, even if the holder of one of the largest retirement programs, General Motors Corp., were to file for bankruptcy. The news came as the Pension Benefit Guaranty Corp.'s former director invoked the Fifth Amendment in response to lawmakers' questions about possible mismanagement under the Bush administration. The PBGC's inspector general last week issued a report saying that the former director had violated prohibitions on contacting bidders that were seeking investment contracts. The former director, Charles Millard, has denied allegations that he had inappropriate contacts with several Wall Street firms that won contracts to advise the agency, and said his actions were approved by ...

The former President and CEO of the Caisse de dépôt et placement du Québec got roasted at a hearing probing the Caisse's 2008 losses : Quebec's pension fund has fared well in recent years despite the latest massive losses caused by the collapse of the asset-backed commercial paper market, said the former head of the Caisse de dépôt et placement du Québec . "Quebecers can still have every reason to be proud of the Caisse ," said Henri-Paul Rousseau in his opening statement Tuesday at a parliamentary commission probing the pension fund's staggering $40 billion losses last year. Rousseau spent Tuesday morning deflecting a steady stream of accusations from commission members who reproached him for quitting his job at the Caisse , just as the pension fund was bleeding profits. Rousseau announced he was leaving the fund in May 2008 and remained on as an adviser to the board until the end of August 2008. The former Caisse boss showed a "deep contempt for the in...

Reuters reports that pension fund urges more credit rater accountability : Credit rating agencies should not be exempt from liability in their forward looking statements, the Colorado Public Employees' Retirement pension fund said on Monday. At a hearing on Tuesday, Congress will examine whether rating agencies like Moody's Corp and McGraw-Hill Cos Inc's Standard & Poor's need to be regulated further after they assigned top ratings to complex securities that later deteriorated in value. The Colorado pension fund, which holds more than $29 billion in assets, urged Congress to pass legislation to make the rating agencies more accountable. Congress must remove rating agencies' exemption from liability for forward looking statements and as experts under federal securities laws, said Gregory Smith, the pension fund's general counsel, in remarks to be delivered to the House Financial Services subcommittee on capital markets. The U...

A few weeks ago, Susan Eng, Vice President Advocacy at the Canadian Association of Retired Persons ( CARP ), asked me to write an article on investing. At first I hesitated. I simply do not believe a "once size fits all" approach to investing. Moreover, I am a risk-taker and my risk profile is certainly not the same as most investors out there. I can stomach huge swings in volatility because when I have conviction on a trade, I remain focused and ride out the storm. I have already written some investment comments like Boy Plunger's Pivotal Point Theory and in January, I wrote an extensive comment on Outlook 2009: Post-Deleveraging Blues? I want to follow-up here and give you my approach to investing my money. I typically start by looking at the big picture. Last week I wrote comments on the "W" recovery and followed up by asking whether inflation is inevitable . I like to constantly read on what are the big secular trends and have broken them down to the follo...

A past colleague of mine wrote an excellent article in the Montreal Gazette. Consultant Luc Vallée, the former chief economist at the Caisse de dépôt, thinks the system is still rigged : The end of April marked the first 100 days in office of U.S. President Barack Obama; elected on the promise of change. Change we could believe in. I believe that he meant it. However, by now, he met all these nice Wall St. types; powerful, quite smart, extremely charming and actually very convincing guys. Like President Obama, they want to re-establish trust in the system but they also want the system to keep working in their favour. So how did the new president perform so far on reforming the financial sector? The approval of the markets during the last few weeks certainly suggests that he has done quite well. But let's take a closer look at things. In raising the rhetoric against free trade and bonuses, Obama definitively tried to side with the average guy. But that sort of populism won't do ...