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Fifteen universities have some form of defined benefit plan with combined assets of over $13 billion
Toronto (30 April 2009) – The Ontario government is urging the province’s universities to combine their pension assets in order to cut costs and increase economies of scale.
If executed, the universities could create their own organization to manage the fund or could turn to the Ontario Teachers’ Pension Plan for expertise.
In Ontario, 15 universities have some form of defined benefit plan with combined assets of over $13 billion. The plans, however, have taken large hits in the past year as financial markets collapsed. The Council of Ontario Universities estimates pension requirements could eat up about seven percent of university budgets in coming years, with some facing much steeper demands.
In its March 2009 budget, the Ontario government gave the Teachers Pension Plan the right to extend its mandate to take in plans from the broader public sector. It will be able to extend its mandate to provide pension administration and investment services to other pension plans and institutional investors in the public sector.
Talk of consolidating Canada's pension funds is not new, and has been mentioned in recent expert committee reports from Alberta and British Columbia, Ontario, and Nova Scotia.
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