Global benchmark ranks Canadian system top overall, but others are better on cost, performance, and responsible investing
Investors in Canada’s pension funds should feel more confident than global peers that their disclosures have high degrees of transparency.
But although the private and public funds that make up the system that Canadians rely on rank highly, there are several areas where transparency could be improved.
The second Global Pension Transparency Benchmark from Toronto-based CEM Benchmarking, reveals Canada’s first-place ranking overall.
The rankings are based on four factors – governance, cost, performance, and responsible investing (RI) – with scores based on analysis of hundreds of disclosures from each of the 15 country’s 5 largest pension fund organizations by AUM.
Canada has the highest score overall but ranks 2nd for performance and 3rd for both cost and responsible investment.
Norway, the Netherlands, the United States, and Australia complete the overall top 5, while Chile and Mexico are the laggards.
RI disclosures improving
Across the international analysis, there has been an improvement year-over-year in the transparency of disclosures for responsible investing, something that investors regularly call for.
“We were pleased to see the year-over-year improvement in Responsible Investing disclosures,” commented Michael Reid, CEM’s relationship manager and lead for the Benchmark. “In particular, more funds chose to quantify their efforts and contrast actual results with their mid and long-term goals.”
However, there is work to be done across the global pension fund industry in improving overall transparency of disclosures, which the report shows have improved for governance and responsible investment, remained the same for cost and dipped slightly for performance.
"We continue to be disappointed at the lack of transparency around costs. Costs persist and can have a profound impact on total returns over the long-time horizons of pension plans. Stakeholders deserve better,” Reid added.