CANADA - The Ontario Municipal Employees Retirement System (OMERS) has blasted the Ontario Expert Commission on Pensions for failing Canadian businesses through what it said was too strict regulation governing pension investments.
The $46bn pension plan labelled the laws as ‘anti-Canadian’ and called on the government to impose a three year suspension on the rules whilst a full investigation into their effectiveness was carried out.
It also urged a shift to principles-based governance of pension investments.
Michael Nobrega, president and CEO, OMERS, said: "These rules are not only commercially bizarre, they’re also anti-Canadian.”
Nobrega continued: “One size does not fit all. Principles would provide the flexibility for each plan to responsibly determine it’s own destiny.“
Under the Pension Benefits Act (PBA), Canadian pension schemes are heavily constrained in how they can invest in domestic companies. The PBA limits pension funds from owning more than the 30% of a company’s shares needed to be eligible to elect the board of directors and investing between 5% and 25% in real estate.
In practice, these tight regulations have led to the creation of complex and costly financial, legal and organisational structures in order to comply with the law, according to OMERS. Nobrega claimed this had cost “billions of dollars” over the past decade.
These demands come in the light of concerns expressed over the high value of the Canadian dollar and exposure to global currencies, as Global Pensions has previously reported.
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