The risk-laden approach to investing Canadians’ pensions: an analysis of the Canada Pension Plan Investment Board and its market-based investment strategy

The Canada Pension Plan Investment Board (CPPIB) has introduced substantial risk into the investment of Canadians’ public pensions by moving assets from secure government bonds to market-based equities, real estate and hedge funds. This risk, because of the recent economic recession, has resulted in substantial losses to the Board’s portfolio assets of over $17.5 billion in this current fiscal year alone. Under the guise of its internally developed “Policy on Responsible Investing,” the CPPIB invests the assets without concern for corporate social responsibility, promising to engage with rather than divest from irresponsible corporations. This adherence to a market-based investment philosophy has resulted in Canadians’ pension assets being risked and lost. The CPPIB therefore eschews its fiduciary responsibility to protect Canadians’ pensions for the foreseeable future. Failing the implementation of better risk management strategies including the reallocation of assets, new contributions may be required to fund future pension liabilities.