What does the present crisis mean for Canadian public policy and including the Canada Pension Plan?
Pension investments (including pension funds and insurance products) matter a lot in today’s capital markets. In many jurisdictions, pension funds dominate the ownership structure of publicly traded stocks and indeed entire stock exchanges. In 2006, pension investments in OECD countries were worth $25 trillion. $16 trillion of these dollars were invested directly in pension funds; $9.7 trillion was invested in the US. A further $4.1 trillion is invested in Sovereign* and Public Pension Reserve Funds such as the Canada Pension Plan. So when stock markets slide, so do pension assets. Countries vary enormously in the size and nature of their pensions investments. Some jurisdictions fund pensions almost entirely from current tax revenues; others have sovereign reserve funds to provide some level of insurance against future liabilities. And of course individuals may make personal provision through private schemes (ie RRSPs in Canada). As well, employers may provide occupational coverage. Go
