Re: Faculty Pension Options - Follow-up with some information that came out of a public discussion on Monday Nov. 19th

[Tamon Stephen <tamon@sfu.ca>]

________________________________________
From: Julian Christians <julian_christians@sfu.ca>

> [...] a financial advisor who obtains a commission from financial products may not be completely objective. [...]

I think this is a good point.  By the same token, I suppose that BCCPP executives will be up for Translink-style bonuses and raises if they add SFU to their asset base.  Generally I favour extreme wariness/suspicion/paranoia concerning large pools of money.  I think there's a lot of value in trying to work through the numbers yourself, and, if you are meeting professionals face-to-face, question them relentlessly.  Better still, get explanations in writing that you can fact check at home or with others. 


Related to BCCPP executives, governance has come up occasionally in this discussion.  Sun Life is private company, we obviously shouldn't expect any favours from them.  On the other hand, we do have some role in the governance of the fund, and a bit of leverage in the sense that we could in principle dump them for another company, or BCCPP.  Meanwhile BCCPP is, as best I understand it, something more like ICBC, a large government agency with an unclear accountability structure.  BCCPP has 13,600 active members*, so SFU would be less than 10% of it.  

It's worth noting that our 2014-15 interaction with BCCPP started with a proposal that seemed almost too good to be true (joining them with opt-out) and then turned out to be too good to be true.  A cynical person might be left with an aftertaste of bait-and-switch.  A more charitable interpretation is that they may not have done a great job with their homework.  Either way, my intuition is that I'd rather deal with Sun Life with the small amount of leverage that we have, rather than BCCPP with none.  Incidentally, I've been very impressed by the comments of our faculty Sun Life plan trustees who have posted to this thread, which encourages me on that front.  (Although trustees change over time.)

The issue of responsible investing to my mind illustrates the two situations quite well.  Julian linked us to BCCPP's policy regarding responsible investing: <https://college.pensionsbc.ca/responsible-investing>.  This statement mashes together a few sentences like "These investment principles are founded on the belief that an economically efficient and sustainable global financial system is a necessity for creating long-term value."  The most concrete thing there is that they have recently joined the "30% Club Canada, an organization that advocates for companies to enhance gender diversity."  30% you ask?  Check them out: <https://30percentclub.org/about/chapters/canada>.  "Aspirational" in italics, just in case anyone might get nervous.  Okay.

Meanwhile, Sun Life ... we did recently get them to include a "Fossil Fuel Free Fund" in our menu of investment options.  I'm sure this was not Sun Life's initiative.  I doubt that it was easy to get them to agree to it.  Perhaps the recent attention we have received from BCCPP helped.  But on the whole, I feel more comfortable with having some role in governance and a small amount of leverage to having neither.  I think governance is an important issue, and to me, at least, an issue that favours the NO side.

Best regards,

Tamon

* From: <https://college.pensionsbc.ca/organizational-structure-of-the-plan>