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Canada's Pension System Gets High Praises
BIV Business today reports, Canada’s pension system remains among world’s strongest:
Canada’s public pension system helps make its financial system one of the strongest in the world.
The World Economic Forum has
called Canada’s financial system the strongest in the world for the
past three years. Part of the credit for that is reflected by the
Canada Pension Plan, said David Denison, president and CEO of the CanadaPension Plan Investment Board (CPPIB).
At an event held at the Sheraton Wall Centre
last week, Denison noted that reforms made 15 years ago are putting
Canada in the enviable position of having one of the most secure
national pension systems in the world.
“One of the primary
reasons for the fiscal instability in Greece is that their national
pension system is not sustainable. We’ve had strikes in France over the
last two weeks because of changes to their retirement system. The same
situation is in Spain, Italy. So many countries around the world are
just getting to this issue because they’re being forced to.”
Denison
noted the financial crisis did impact the CPPIB’s growing pool of
investment capital dedicated to paying future benefits, however, the
crisis also created many investment opportunities that will benefit
future CPP beneficiaries. The key for the fund’s management is to stay
focused on long-term investing.
“The vast majority of market
investors, because of who their clients are and how they get chosen and
how they’re compensated, have relatively short-term investment
horizons. We’ve got to go against the grain and utilize our competitive
advantages. Those are things at the forefront of my mind.”
More insights into the CPP fund from Denison are in this week’s print edition of Business in Vancouver newspaper.
Having
just returned from Greece, I can vouch that Canada's pension system is
among the world's strongest, but that doesn't mean that we can't
improve it. Mr. Denison is right, pensions have to adopt a long-term
focus, but they also need to implement more transparency and
accountability. I'm too tired to go over my thoughts, but those of you
who regularly read my blog know that there is no such thing as a perfect
pension system.
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I just wish they'd buy gold then I know for sure that my retirement would be safe.
Having 6 trillion shares of RIM just doesnt; give me the warm fuzzies
Oh nooooo, not The LOCKBOX !
Canada's pension system unlike the US has a seperate fund that invests the money in stocks and bonds. In the US all you have is an iou from the government. However at the end of the day like all things run by government the rules can be changed at will and if there is a shortfall people who have paid there entire lives may find they are no longer eligable to collect anything. Past performance is no guarantee of future performance.
Why not have no general pension system except elective self directed accounts? Let everyone takecare of their own retirement. Some form of support for say the handicapped would be in order the rest strictly self managed.
So basically what you're saying is: nationalize/unionize everything and "go long?"
Sounds like a plan. Good thing we can trust our governments to safeguard those long-term investments and piles of cash - in fact, we can store our pension invesments right next to that lock-box full of social security FRN's in the vault.
Don't you mean that lock-box full of Treasury IOUs? The Social Security cookie jar has been raped by every administration since the system was introduced. Always with the promise to pay it back 'next' year! Well - with the baby boomer population bubble about to swamp the system with retirement requests - 'next' year is here!
Canada's pension system has a separate fund and investment arm removed from governmental interference. Although the pension investment arm is allowed to invest in governmental projects, such as hydroelectric development, with consequent long term revenue sharing.
A friend of mine owns a bar. He has a prominent advertisement hanging in the entrance: "Free Beer Tomorrow." Often takes 2 days for patrons to figure that one out.