Canada Pension Plan Reforms Viewed as Model for Pension Reform Around the World

Tenth Anniversary of CPP Reforms Marked at C.D. Howe Conference Today

TORONTO, ON (December 10, 2007) — The CPP Investment Board, the investment management organization that invests Canada’s national pension fund assets, today highlighted the success of the Canada Pension Plan reforms of 1997 and the strength of the CPP Investment Board’s unique governance structure. The comments were made today at a C.D. Howe Institute conference in Toronto that marked the tenth anniversary of the CPP reforms.

In his opening address, David Denison, CPP Investment Board President and Chief Executive Officer, said, “The CPP reforms of the mid-nineties stand as a bold and visionary achievement that has become a model for pension reform around the world. The CPP Fund has grown from a legacy portfolio of more than $35 billion in government securities to what is now a broadly diversified portfolio of more than $121 billion invested on behalf of 17 million working and retired Canadians.”

Mr. Denison also spoke about how nations around the globe have examined Canada’s pension model in search of solutions to their own challenges. “These countries have different starting points for pension reform, different needs and different appetites for change. But they all acknowledge the thoroughness of the Canadian approach, the integrity of the Canadian model and the success of the CPP reforms. It must be gratifying for the policymakers who devised the thoughtful formula for the reforms of the CPP to learn that their work is being held up as the gold standard for the world 10 years later.”

Also speaking at the conference was the founding and current chairperson of the CPP Investment Board, Dr. Gail Cook-Bennett. In her remarks, Dr. Cook-Bennett discussed the mission set out by the reformers in 1997 and the CPP Investment Board’s innovative governance model. “That mission was not just to implement a world-class governance model, but to build a world-class investment organization – an investment organization able to compete with the very best of the best in the private sector, while maintaining an extraordinary degree of public accountability.”

Dr. Cook-Bennett also outlined a number of key features of the governance model: an independent, arm’s-length relationship with governments; an experienced management team that reports to an independent Board of Directors, not governments; a clarity of purpose through a singular, investment-only mandate; and a high level of transparency in operations. Further, the CPP Investment Board invests CPP contributions, not tax revenues.

She cited these elements as among the main differences between Canada’s national pension fund and the Sovereign Wealth Funds that are emerging around the world. Accordingly, the CPP Investment Board is not by any definition a Sovereign Wealth Fund.

“These differences will become important in the months and years ahead as governments around the world contemplate the imposition of more stringent foreign investment measures especially against government-sponsored funds.”

“The remarkable health of the Canada Pension Plan is a tribute to the reforms – and the reformers – of the mid-nineties, and is a great advantage for Canada,” said Dr. Cook-Bennett.

CPP Investment Board
The CPP Investment Board invests the funds not needed by the Canada Pension Plan to pay current benefits on behalf of 17 million Canadian contributors and beneficiaries. In order to build a diversified portfolio of CPP assets, the CPP Investment Board is investing in publicly-traded stocks, private equities, real estate, inflation-linked bonds, infrastructure and fixed income. The CPP Investment Board is accountable to Parliament and the federal and provincial finance ministers. Based in Toronto, the CPP Investment Board is governed and managed independently of the Canada Pension Plan and at arm's length from governments. At September 30, 2007, the CPP Fund totaled $121.3 billion. For more information about the CPP Investment Board, visit www.cppib.ca.

Joel Kranc
Manager, Communications
(416) 874-5163
jkranc@cppib.ca