The independence of CPP Investments

Credit to Author: Staff Writer| Date: Tue, 21 Feb 2023 19:02:35 +0000

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When CPP Investments was created in 1997, Canadian legislators insisted on rules to prevent political interference with decision-making, including investment selection. That independence remains firmly in place.

CPP Investments operates at arm’s length from federal and provincial governments, which is to say that elected officials have no say in the day-to-day management of CPP Investments. It also works independent of the Canada Pension Plan (CPP) itself. Its independent, highly qualified, professional Board of Directors provides oversight of the organization.

CPP Investments’ job is to help the CPP meet its obligations to Canadians who contribute and/or benefit from the Fund. It does this by investing assets in the Fund to maximize returns without taking unnecessary risk, managing the Fund in the best interest of CPP contributors and beneficiaries.

Just as important, CPP Fund assets are kept separate from government funds. Neither federal nor provincial governments can access the CPP Fund — that money is only available to pay CPP benefits and related costs.

Rigorous accountability

Making sure that there is transparency around all of this is important. CPP Investments makes timely disclosure to the public of material activities. That includes new investments, partnerships, quarterly and annual financial results and matters that might impact its reputation. CPP Investments’ annual report is tabled in parliament and it holds public meetings every two years.

CPP Investments’ management reports to its Board of Directors, not to governments. The Board approves its investment policies, determines strategic direction (in collaboration with CPP Investments management) and approves key decisions about how it operates. The Board is in turn accountable for their performance under a rigorous accountability regime which includes reporting to the federal and provincial Finance Ministers who serve as the stewards of the CPP.

Internally, CPP Investments is led by a senior management team with a long history of global investment management leadership experience.

CPP Investments has strict risk management policies and controls in place. And it measures outcomes to ensure it remains aligned to its mandate. Both contribute to careful, effective decision making.

In addition to its legal requirements, CPP Investments works hard to ensure that the business of CPP Investments is always conducted responsibly and in a principled manner. Its Code of Conduct lays out the ethical behaviour required of all CPP Investments employees.

Want to learn more about CPP Investments and your financial future as a new Canadian? Check back here  for new content every month, or read more articles, access resources and watch videos at www.cppinvestments.com/commitment-to-canadians.

This content is provided for information purposes only. CPP Investments is not a financial advisor, and the content on this site does not provide financial advice. Every person’s financial planning needs are different. For advice on how you should prepare financially for retirement, please consult a credentialed professional financial advisor.

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