By Alvin Yau
It was a full house at the Faculty of Law’s Program on Ethics in Law and Business Fall Roundtable event on November 3, 2017 on Pension Fund Investments and Governance, where an illustrious panel of speakers from legal practice, pension fund management, and the academy discussed a wide variety of topics dealing with pension fund investments, governance, and the role of legal counsel.
The roundtable began with Dean Ed Iacobucci welcoming the panellists and guests to the Faculty of Law and to this year’s roundtable theme focusing on the role of Canadian pension funds and their place in the world. Dean Iacobucci noted the domestic and international renown of Canadian pension funds and the diverse legal and financial issues which engage pension funds.
Professor Anita Anand then spoke eloquently in her introduction about the impact of Canadian pension funds in domestic and global capital markets. Professor Anand noted how Canadian pension funds held approximately 15% of the country’s total assets in the financial system. Of this 15%, the eight largest public pension funds control two-thirds of this share with an astonishing $1 trillion net assets under management. Among these largest eight public pension funds are familiar names like the CPP, Caisse de dépôt et placement du Québec, Ontario Teachers’ Pension Plan Board, and OMERS. Representatives from some of these pension funds were in attendance during this roundtable.
Professor Anand also lauded Canadian pension funds’ leadership in maximizing returns for pensioners while reducing risk as well as engaging in important conversations about corporate governance reforms. Indeed for Professor Anand, the willingness of Canadian pension funds to seek healthy financial returns for their beneficiaries while exercising their influence in capital markets and boardroom decision-making should be welcomed by Canadians. After all, “it is apparent that when Canadian pension funds engage in capital market issues, the world pays attention.”
Keith Ambachtsheer, a renowned pension fund author, adjunct professor, and director emeritus at the International Centre for Pension Management at the University of Toronto - Rotman School of Management, was a featured speaker at the event.
Professor Ambachtsheer’s spoke with clarity and depth about a variety of topics affecting Canadian pension funds and their interaction with global capital markets and diverse asset class investments. Notably, for Ambachtsheer, the “essence of the Canadian pension fund model began in Ontario and took decades to play out.” He then described the international respect for this Canadian pension fund model citing how this model “has been exported abroad, but governance and resource constraints are problems [to successfully replicating this framework].”
The roundtable event then proceeded to the panel discussion chaired by Professor Anand. The panellists represented a broad variety of Canadian pension fund decision-makers with Michael Kelly (executive vice president and general counsel, OMERS), Matthew Cockburn (partner, Torys LLP), Michael Wissell (Senior Managing Director, OTPPB), and John Walsh (general counsel, OPTrust).
The panel discussion was insightful and engaging for those in attendance. Important pension fund topics such as board governance, the qualities of a successful pension fund investment across alternative asset classes, and the role of in-house and external legal counsel were addressed during the one-and-a-half hour long discussion.
On the issue of in-house counsel, Michael Wissell noted that the qualities relating to a successful pension fund counsel featured “creativity and humility … to make a difference,” furthermore, Wissell noted how changes to the general pension fund landscape has spurred the growth of positions requiring specialist knowledge in areas like compliance or derivatives investment. Michael Kelly further noted how lawyers in general offer “the right toolkit” for dealing with diverse pension fund issues that arise in day-to-day operations.
John Walsh spoke about the importance of legal counsel in Canadian pension funds by describing the interaction of Canadian pension fund investment in international assets. Specifically Walsh noted how “Canadian counsel helps international transactions [succeed] since these transactions always have some Canadian law component like the Pension Benefits Act or the Income Tax Act.”
Matthew Cockburn elaborated on the importance of having external counsel provide specialist and general support for pension funds as investment decisions become more complex and diverse in terms of scale and scope. For Cockburn, “there is always room for external counsel” when dealing with the legal issues affecting pension funds.
By the end of the two hour roundtable, it was clear that the event was a great success. The discussion among panellists engaged those in attendance and offered insight into the challenges and successes of Canadian pension fund operations. While Canadian pension funds are often admired and imitated abroad, the roundtable speakers examined the qualities of how Canadian pension funds achieved so much for pensioners at home. This roundtable continued to add to this vital discussion about the present and future role of Canadian pension funds on the world stage.
