CANADA - The Ontario Municipal Employees Retirement System (OMERS) has called on the government to give pension funds more investment freedom, claiming restrictions were hurting its ability to provide stable, long term cash returns.
He said the rules, among other constraints, limited its ability to control dividend distributions from its investments.
He said: "In 2008, OMERS could experience a situation that underscores our need for greater access to and control over our investments.
"For the first time in our history, outside of times when there was a contribution holiday, our pension payments are expected to exceed contributions to the plan.
"As cash returns from investments will be required to cover this increasing demand, OMERS urgently needs the Ontario government to lift the investment rule that restricts pension funds from owning more than 30% of the voting shares of a company."
The OMERS Primary Pension Plan received CAN$1.9bn (US1.9bn) in pension contributions in 2007, compared to $1.8 billion in 2006.
Pension and other benefit payments totalled $1.8 billion, an increase of $0.1 billion over 2006.
The pension fund's total rate of return was 8.7% in 2007, a top-quartile performance that exceeded its benchmark return of 5.6%.
It said the incremental value that OMERS generated above its benchmark was the direct result of the expertise of OMERS investment professionals.
In 2007, this incremental value was approximately $1.4bn and this was the fourth consecutive year that returns exceeded the benchmark by over 200 basis points.
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