Pallister wants pension-fund managers working ‘smarter’ Joining forces to shop for advice could save $200M annually, province estimates By: Jessica Botelho-Urbanski Posted: 7:00 PM CST Monday, Dec. 16, 2019

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This article was published 15/12/2019 (1740 days ago), so information in it may no longer be current.

Premier Brian Pallister wants to see public-sector pension fund managers band together to get better returns on investment for their employees.

Pallister announced Monday government officials would be meeting with employer groups shortly to start brainstorming ways to shop smarter when it comes to pension fund management. They are expected to return with joint recommendations by March 2020.

The government estimated it could save $200 million annually by buying investment services in bulk, while the province currently has about $40 billion in “externally managed pools of funds consisting mostly of pension plans,” it said in a news release.

“Manitobans are, as we all know, smart shoppers in their private lives and they expect the same from their governments and from those who manage their pensions as well,” the premier told reporters.

“So I see this as an opportunity to our public-sector pension fund managers to work together to end this inefficiency. And I’m asking them to develop a plan so that we can reduce the fees that we’re currently paying to managers in places like Toronto and New York, and work together to purchase management services as a group.”

He emphasized any proposed changes wouldn’t affect individual pension plan benefits.

“It’s not about pooling everything into one pension plan. It’s about respecting the different divisions among the pension plans, but it is also about having our public pension funds become better shoppers… Frankly, cutting costs at the top means there’s more money for the front line,” Pallister said.

Liberal Leader Dougald Lamont asked why the premier was making demands about pension management when an independent commission normally takes on pension-related decision-making.

“It’s no secret that some investment management fees are very high and need to be curtailed,” Lamont said in a prepared statement.

“However, we question the premier’s decision to once again apply political pressure and meddle in an independent organization when the government’s own work isn’t getting done.”

Provincial pension backgrounder

Lamont wondered who would be held accountable if the premier’s suggestions don’t pan out.

NDP finance critic Mark Wasyliw also accused Pallister of meddling.

“We know political interference often means big paydays for well-connected insiders while average workers don’t benefit. Any decision regarding the management of investment funds should be in the best interest of workers, not politicians and their friends,” he said in an emailed statement.

The Manitoba Federation of Labour declined to comment Monday, saying it would wait to hear more from the premier and government on the pension proposal first.

“However, we question the premier’s decision to once again apply political pressure and meddle in an independent organization when the government’s own work isn’t getting done.” – Liberal Leader Dougald Lamont

Pallister said several other provinces have already made the proposed changes on pension fund management, some as far back as 30 or 40 years ago. Those provinces include Ontario, British Columbia, Alberta, Nova Scotia and New Brunswick.

He rebuffed a question about whether centralizing management could increase risk.

“No, the opposite would be the case,” Pallister said. “I would suggest through the greater security of larger sums and also through the ability to co-operatively purchase the advice, you could be able to design your portfolio with more safety.”

jessica.botelho@freepress.mb.ca

Twitter: @_jessbu