Pension Report September, 2022
OTPP has signed an agreement to purchase the majority stake in Sahyadri Hospital from the Everstone group. It is the largest private hospital in the state of Maharashtra (India). Sahyadri has eight hospitals with 900 operating beds, and 300 critical care needs. The facilities are concentrated around the city of Prune in India.
The results for the major defined pension plans for the last six months have been released. Owners lost $500 Million dollars or a loss of 0.4 percent of it’s assets; Caisse de Depot et placements du Quebec lost 7.9 percent with their assets down by $28.2 Billion. This includes of write-off of US $150 Million investment in the cryptolender Celius Network L.L.C.
CPP investments lost $23 Billion in the first quarter of this year. Our pension plan was very fortunate to earn a return of 1.2 percent for the first six months of this year. We have a surplus of $17.2 Billion (as of Jan. 1, 2022) and assets of $242.5 Billion. It is fully funded.
Recently Omers and Caisse de depot et placement du Quebec revealed that their investments in Azure Power a Indian Power Company that specializes in Renewable Energy lost two-thirds of its value due to potential procedural irregularities; and misconduct by some of its employees. Fortunately, our pension plan did not invest in the company. (Source 1)
There is a federal private pension members bill in Ottawa that is designed to protect the pensions for employees of companies that are going bankrupt. This is an attempt to improve Canadian regulations regarding underfunded pension plans with insufficient assets to cover their liabilities. It would give “super-priority” over large creditors and the payout of executive bonuses in a bankrupt or insolvency process. Marilyn Glada, a Conservative MP for Sarnia-Lambton Ontario initiated the bill. This only applies to defined pension plans, not defined contributions (like a self-directed R.R.S.P Plan). (Source 2)
Recently OTPP has announced plans to invest $5 Billion in large greenhouse gas emitters in order to boast returns as well as tackling climate change. (Source 3)
Jo Taylor OTPP chief executive officer expects to take significant positions in four or five companies that generate up to 10 times the GHC emissions of a typical company that the plan invests in. The sectors that have large amounts of GHC emissions include transportation, electricity production, heavy industry and agriculture. The plan is to exert pressure on the companies to reduce their emissions, and thus increase their value.
Omers and CPP investments sold their holding in the Chicago Skyway toll road to an Australian company called Atlas Arteria Ltd for $2 Billion US. Each pension plan owned one third of the toll road. The road links downtown Chicago to its Southeastern suburbs.
There have been some concerns in the media about large Canadian defined pension plans making too many global investments and a insufficient amount in Canada. Investments create jobs and are beneficial for our economy.
The Ontario Teachers Federation and the Government of Ontario have filed for a valuation of our pension plan with the regulator. Hopefully our plan can continue to make rewarding investments.
1 – Globe and Mail newspaper August, 2022
2 – Toronto Star newspaper June 30, 2022
3 – Globe and mail newspaper September 9, 2022