Major pensions on solid footing: Report

Canada’s major public pension funds are well positioned to ride out the short-term effects of the current market turmoil and to meet their longer-term pension obligations, says DBRS Inc.

In a new report, the rating agency examined the impact of the recent downturn on the large public pension plans — including the Canada Pension Plan Investment Board (CPPIB), the Public Sector Pension Investment Board (PSPIB), Caisse de dépôt et placement du Québec (CDPQ), Ontario Teachers’ Pension Plan Board, OMERS Administration Corp. and the Ontario Pension Board.

The report said that the current challenges facing the funds, such as lower asset valuations, “are generally viewed as temporary.”

Additionally, the funds’ long-term investment horizons “provide them with the time needed to respond to opportunities to adjust asset allocations, recalibrate the pension liability for updates to long-term interest rate changes, and issue longer-term debt,” the rating agency said.

The funds have “strong governance and management frameworks in place with a disciplined approach to investments,” the report noted.

“While there still remains uncertainty around the magnitude and duration of the longer-term impacts resulting from measures implemented to contain the coronavirus, DBRS Morningstar views the pension funds as being well positioned to meet short-term liquidity needs and longer-term liability obligations,” the report said.

James Langton

James is a senior reporter for Advisor.ca and its sister publication, Investment Executive. He has been reporting on regulation, securities law, industry news and more since 1994.