What steps does the Plan take to protect against major losses?
Given the long investment timeframe for pension plans, we know there will be periods of investment market weakness, resulting in investment under-performance. However, history shows us that over the long run, invested money grows in value. To avoid major losses in any one area, LAPP’s investment policy requires prudent diversification. As a result, LAPP invests in a broad set of assets including money market instruments, bonds, mortgages, real return bonds, real estate and stocks from companies based in Canada, the U.S., Europe, and the rest of the world. We set limits on how much money can be invested in the different asset classes and in any one company or security, so that a loss in a single investment will not have a material financial impact on the plan. LAPP also assures appropriate diversification is achieved between geographic locations, industrial sectors, investment managers and styles. Moreover, LAPP is a defined benefit plan where pension benefits are based on a formula and
