The Ontario Teachers’ Pension Plan says it’s not interested in providing investment management for Ontario’s smaller, public sector funds.
Last week, the provincial government released a report that detailed recommendations for improving the efficiency of the province’s smaller pension plans. That report estimated that pooling the assets of various smaller plans together to create a new asset manager with over $50 billion in assets under management could save between $75 million and $100 million annually, along with other benefits, such as access to asset classes that may not be available to smaller plans.
On Monday, Teachers, which boasts $117.1 billion in assets (as of December 31, 2011), said that it would not be seeking a mandate to run the collected assets of these smaller plans. It noted that the advantages of pooling, such as efficiencies of scale and administrative streamlining, can be realized whether the funds are managed by an existing plan or a new entity, and that it’s not structured to take on outside assets.
“Our success at Teachers’ since we were founded 22 years ago is largely due to our single-minded focus on our members and their retirement financing needs. We consider ourselves not an asset manager so much as a liability manager; our investment efforts are driven by the demographic reality, and resulting liability profile, of our membership,” said Jim Leech, Teachers’ president and CEO.
“We are not structured to manage third party assets. We believe that the complexities involved in meeting the needs of multiple memberships’ liabilities under our governance structure would dilute our investment effectiveness and would not be in our members’ best interests,” he said.