Sky-high stock valuations present portfolio allocation challenge for major pension funds
Soaring stock prices boosted returns at major Canadian pension plans, even as a slowdown in private equity weighed on overall performance at funds like the Ontario Teachers' Pension Plan. But strong equity returns聽don't聽necessarily mean pension plans should聽allocate聽more capital to stocks, Sebastien Betermier told Bloomberg.聽
How open banking could empower survivors of financial control
Canada鈥檚 proposed open banking legislation, Bill C 15, could become a powerful tool for women experiencing economic abuse, according to researcher Sebastien Betermier. The framework would allow consumers to securely share their financial data with trusted third parties, helping survivors access crucial records without relying on abusive partners.
European public pensions struggle with the weight of demographics
Europe is aging, and some national pension funds are better prepared to manage its changing demographics than others. Many European countries use a 鈥榩ay as you go鈥� model in which current workers fund the retirement of current pensioners.
Pension funds enter a new governance era amid geopolitical and ai disruption
As global trade wars, geopolitical聽tensions聽and AI advances reshape financial markets, pension funds face mounting pressure to adapt.
Real estate makes up a majority of household wealth
To rent or to buy鈥攖hat鈥檚聽the dilemma facing many today. Real estate prices are at historic highs, and elevated interest rates have pushed up the cost of homeownership. At the same time, stock markets have delivered strong returns in recent years. Beyond these financial pressures, the nature of homeownership itself adds another layer of complexity.
Infrastructure leasing or sale can encourage pension funds to invest domestically
Major pension funds have built trillions in assets by pursuing high-performing portfolios and maintaining independence in their investment decisions. Recently, however, discussions have emerged about imposing mandates that would require these funds to allocate more capital domestically鈥攁 trend not limited to Canada, as countries like Sweden have considered similar measures.
Cash-strapped governments should resist telling pension funds how to invest
Stock markets continue to hit record highs, yet many governments聽remain聽strapped for cash鈥攁nd some are eyeing pension funds to cover fiscal shortfalls.
They should resist the temptation to mandate that pension funds invest more domestically,聽said聽Associate Professor of Finance Sebastien聽Betermier聽in an interview with聽CNBC.聽
Whether renting or buying, Canadians are exposed to risk
Buying a home can help you build household wealth, but renting has fewer overall costs, which allows you to save more of the money you earn. While the conventional wisdom has been that buying is the better financial decision for most people, sky-high real estate costs change the equation. Stock markets have also performed well in recent decades, and investing the surplus left over from renting can pad your personal finances in a big way鈥攊f you actually do it.
Caisse de depot鈥檚 stake in UK nuclear project is a model to emulate
The Caisse de d茅pot et placement du Qu茅bec is taking a 20% stake in the Sizewell C nuclear power station in Suffolk, England. It is the UK鈥檚 first new nuclear power plant since the 1990s, and Professor Sebastien Betermier credits the government there with creating the favourable circumstances for private investors like the Caisse to take part in infrastructure development.
Infrastructure bank model can encourage investment in infrastructure projects
Private market developers face an 鈥渋nvestment catch-22鈥� in getting infrastructure projects off the ground, Professor Sebastien Betermier wrote in a recent report for the C.D. Howe Institute. Private investors view new infrastructure markets as complex, unfamiliar, and high risk. But the infrastructure bank model can create value as a cost-efficient policy tool in the government ecosystem, Betermier concluded.
Nine directors at large Canadian pension funds also hold fossil fuel positions
Nine of the directors who oversee Canada鈥檚 largest pension funds also hold positions at fossil fuel companies, according to a report by Pensions and Investments.
Concrete policy steps could address issues with Canada鈥檚 pension system
A well-designed pension system brings enormous social and economic values to its members and to society as a whole. Unfortunately, Canada鈥檚 doesn鈥檛 stand out. A 2024 report from Mercer ranks it just 18 out of 48 countries. In thefutureeconomy.ca, Prof. Sebastien Betermier proposes three measures that could help improve it by:
Infrastructure banks can help get large infrastructure projects off the ground
In Canada, investment in infrastructure has lagged, but infrastructure banks are one way to provide financing for large-scale infrastructure projects that could take decades to pay off. 鈥淐anada needs new infrastructure 鈥� housing, energy, ports 鈥� it鈥檚 all critical to our future,鈥� says Prof. Sebastien Betermier.
Tariff uncertainty interferes with business investment
Ever since Donald Trump鈥檚 鈥楲iberation Day鈥� tariff announcement, stock markets have been volatile. The tariffs impact thousands of companies, and with the exact scale and scope of tariffs changing almost daily, the extent to which they will be affected is uncertain. 鈥淚t makes it difficult for companies to investments,鈥� Prof. Sebastien Betermier told TVA Nouvelles.
Canada鈥檚 big pension funds hold lessons for funds elsewhere
Canada鈥檚 big pension funds are the envy of fund managers in other countries. They鈥檙e something that the UK鈥檚 defined contribution plance could aspire to, writes Padraig Floyd in Pensions Expert. 鈥淭hey鈥檙e all public, but they鈥檙e run like private sector corporations,鈥� said Prof. Sebastien Betermier.
