Summary: Stock markets have been in a bull market for a year or so. There are concerns with market returns for 2022 as they could be 4-5% range. Overall health of pensions plans is very good, but there are plans that still have solvency issues that need to be address by state, local, and federal government All levels of government need to revisit their pension funding including tying the matching to 4-5% instead of 9-15% range. Compensation reforms must be part of the fiscal management cycle for all levels of government. High inflation is also playing a key role with household budgets along with skyrocketing housing costs. There could be less disposable income that will be allocated to either savings or RRSPs.

1. Pensions – Returns
and Savings
Paul Young CPA CGA
January 6, 2022

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Paul Young - Bio
• CPA, CGA
• Academia (PF1, FA4, FN2, MU1. and MS2)
• SME – Risk Management
• SME – Close, Consolidate and Reporting
• SME – Public Policy
• SME – Emerging Technology
• SME – Business Process Change
• SME – Financial Solutions
• SME – Macro/Micro Indicators
• SME – Supply Chain Management
• SME – Data, AI, Security, and Platform
• SME – Internal Controls and Auditing
Contact information email: Paul_Young_CGA@hotmail.com
LinkedIn: https://www.linkedin.com/in/paul-young-055632b/
SlideShare - https://www.slideshare.net/paulyoungcga
Twitter: https://twitter.com/paulyoungcpa
Youtube - https://www.youtube.com/user/youngercga1968/videos

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Agenda
• Canada / Pension Solvency
• Global Pension Index
• Pensions / Returns
• Pension assets by type of Plan
• Stock Market performance
• Issues with Pensions Plans
• TFSA
• Summary

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Pensions / Solvency – Canada
• Canadian defined benefit pension plans continued to improve their solvency in the
third quarter as they benefited from market performance, finds research from
London, U.K.–based Aon plc. According to the global professional services firm’s
median solvency ratio survey, the solvency positions of DB plans increased to 99% at
Q3’s end, up from 95.4% at Q2’s end. Source -
https://www.advisor.ca/news/industry-news/markets-continue-to-boost-pension-
plans-solvency-in-q3-aon/

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Global Pension Index
Source - https://www.investopedia.com/articles/personal-finance/042914/top-
pension-systems-world.asp and Mercer

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Pension Wealth
Source - https://www150.statcan.gc.ca/n1/daily-quotidien/201211/dq201211c-eng.htm

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Pension Assets by type of plan
Source - https://www150.statcan.gc.ca/n1/daily-quotidien/201211/dq201211c-eng.htm

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Pension Returns – 2Q21
Source - https://www150.statcan.gc.ca/n1/daily-quotidien/220105/dq220105c-
eng.htm
Pensions.pdf

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Equity / Stock Market – WE – September 3,
2021
Source – BMO
Stock markets continue to struggle over the past few weeks due to many factors like rise in
COVID19 cases and geopolitical issues with countries like Russia and China.
Commodity Prices continue to rise, especially LNG and coal due to the demands for electricity.
China could see GDP growth of only 5.2% for 2022.
https://www.slideshare.net/paulyoungcga/what-is-up-with-stock-marklet-december-31-2021

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Pensions / Public Sector
• Pension plans and reporting - https://www.newswire.ca/news-releases/ympe-jumps-by-
nearly-five-per-cent-for-2021-892085675.html
• Paused of pension solvency payments - https://www.benefitscanada.com/news/canada-
pausing-solvency-payments-for-federally-regulated-db-pension-plans-145154
• Pension Solvency - https://www.globenewswire.com/news-
release/2020/01/02/1965869/0/en/Financial-health-of-Canadian-defined-benefit-
pension-plans-surges-to-end-2019.html
• COVID19 and Pensions - https://www.cfainstitute.org/en/about/press-
releases/2020/Global-Pension-Index-uncovers-impact-of-COVID-19-on-future-pensions
• Countries ranking Pension Funds - https://www.visualcapitalist.com/ranked-countries-
pension-plans/

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TFSA
Source - https://financialpost.com/personal-finance/taxes/new-data-from-cra-shows-
canadians-have-nearly-300-billion-reasons-to-love-their-tfsas

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TFSA / CRA

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Summary
• There are many risks to pension plan especially with the global economy -
https://www2.slideshare.net/paulyoungcga/what-is-next-for-the-global-economy-november-2020 or
https://www.slideshare.net/paulyoungcga/what-is-next-for-the-global-economy
• https://financialpost.com/news/economy/more-canadians-feeling-pessimistic-about-economy-with-confidence-sliding-
for-third-straight-week?utm_medium=Social&utm_source=Twitter#Echobox=1631020344 Not if either
@JustinTrudeau or @theJagmeetSingh have a say as that will ensure more taxes, more regulations, etc. @erinotoole is
the only one standing up for good jobs - https://www.slideshare.net/paulyoungcga/bmo-7-reasons-to-be-exciting-about-
the-canadian-economy
• Potential reforming of the pension reporting - https://www.ipe.com/news/iasb-urged-to-add-projects-on-pensions-
accounting-sustainability-reporting/10048818.article
• Federal Government / Canada has burn taking financial hits for pensions - https://www.canada.ca/en/department-
finance/services/publications/fiscal-monitor/2020/09.html
• Real estate is small portion of pension holdings. There are concerns with high price of real estate in terms of a market
correction - https://www.slideshare.net/paulyoungcga/real-estate-and-housing-market-canada-and-the-world
Blog – Pension Returns – Canada and the World
1. Best Pensions - https://www.investopedia.com/articles/personal-finance/042914/top-pension-
systems-world.asp
2. Pension fund managers - https://www.marketwatch.com/story/how-the-failures-of-highly-paid-
pension-fund-managers-cost-you-500-a-year-11623113060
3. Funding Index - https://www.milliman.com/en/insight/pension-funding-index-june-2021
4. Pensions -
https://piacweb.org/company/roster/companyRosterDetails.html?companyId=19267&company
RosterId=17
5. CPPIB - https://www.newswire.ca/news-releases/cpp-investments-net-assets-total-497-2-
billion-at-2021-fiscal-year-end-813839839.html
6. USA pensions - https://www.pewtrusts.org/en/research-and-analysis/fact-
sheets/2021/05/municipal-pension-funding-increased-in-recent-years-but-challenges-remain
7. Oil and pensions - https://www.reuters.com/business/sustainable-business/canadas-top-
pension-funds-boost-investments-high-carbon-oil-sands-2021-05-26/
8. Pensions - https://www.ssa.gov/policy/docs/progdesc/intl_update/index.html
9. Pension and coal - https://www.northernminer.com/subscribe-login/?id=1003831329
10. Pensions - https://www.mercer.ca/en/newsroom/pension-plans-highest-in-20-years.html
11. Public pensions - https://www.marketwatch.com/story/public-pensions-dont-have-to-be-fully-
funded-to-be-sustainable-paper-finds-11622210967
12. Infrastructure - https://www.pionline.com/industry-voices/commentary-pension-funds-can-
launch-new-infrastructure-era
13. State and local govt - https://www.marketwatch.com/story/u-s-public-sector-pension-funding-
improved-during-the-pandemic-year-11623181272
14. REITS - https://www.investopedia.com/articles/investing/040315/reits-versus-real-estate-
mutual-funds.asp
15. CPPIB - https://www.bnnbloomberg.ca/cppib-posts-5-return-in-q2-as-total-assets-top-456b-
1.1523049
16. Climate change and pensions - https://www.benefitscanada.com/news/bencan/canadian-
pension-funds-calling-for-co-ordinated-world-response-to-climate-crisis/
17. France - https://www.reuters.com/world/europe/frances-pension-reform-cannot-go-ahead-
planned-macron-2021-06-03/
18. Returns - https://www.pionline.com/pension-funds/psp-investments-records-184-fiscal-year-
return
19. Global Pensions - https://www.pionline.com/sovereign-wealth-funds/house-management-
brings-better-returns-outsourcing-survey

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Other Sources
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Young CPA CGA