June 6, 2002
Legislation introduced today consolidating the investment management of all Canada Pension Plan assets into the CPP Investment Board will help ensure a sound public pension plan for the future, John Manley, Deputy Prime Minister and Minister of Finance, announced today.
“These changes will transfer the management of the cash operating balance and the bond portfolio to the CPP Investment Board, and represent the final steps in having all CPP assets managed by the Board,” said Minister Manley. “The three-year phase-in will ensure a smooth transition for capital markets, provincial borrowing programs and the CPP Investment Board. Having all CPP assets managed by independent professionals will enhance the investment performance, diversification and risk management of the entire CPP portfolio.”
The Chief Actuary of Canada has estimated that these changes are expected to increase returns on CPP assets by approximately $75 billion over 50 years.
All provincial and territorial Ministers of Finance support these proposals.
The CPP Investment Board is a Crown corporation created as part of 1997 reforms designed to ensure the soundness and sustainability of the CPP. As at March 31, 2002, the Investment Board had assets of approximately $14 billion under management, while the CPP assets being transferred had an approximate value of $40 billion. Total CPP assets earned 5.7 per cent in the year ended March 31, 2002.
The CPP Investment Board operates under similar investment rules as other pension plans in Canada, which require the prudent management of pension plan assets in the interests of plan contributors and beneficiaries.
For further information contact:
Jean-Michel Catta Public Affairs and Operations Division (613) 996-8080
Jeff Brownley Press Secretary Office of the Deputy Prime Minister and Minister of Finance (613) 952-4900
Bill Mitchell Financial Sector Policy Branch (613) 992-9032