Back Issues
PDF version 
Word document A Conversation With… Keith Ambachtsheer
------------------------------------------------------------------------------------------
A respected author, researcher, and commentator on pensions and investment topics, Keith Ambachtsheer began his career as an investment analyst with Sun Life Assurance Company, advanced as a partner and research director for Canavest House, and became co-founder and partner of Pension Finance Associates. He has operated his own firm, K.P.A. Advisory Services Ltd., since 1985; is the co-founder of Cost Effectiveness Measurement Inc., and writes The Ambachtsheer Letter. He has authored three books, Pension Funds and the Bottom Line, (Dow Jones- Irwin 1986), Pension Fund Excellence – Creating Value for Stakeholders with Don Ezra (John Wiley & Sons, 1998), and, most recently, Pension Revolution: A Solution to the Pensions Crisis (Wiley Finance 2007).
------------------------------------------------------------------------------------------
BPM: Do you think there is hope in Canada, or are we going to see pension coverage continue to vanish in the private sector?
KA: I think it will turn around. I think that this is an issue that is now in the process of getting salience. It is moving up on the priority scale, on the visibility scale, and on peopleʼs radar screens. For example, in Ontario right now is the Expert Commission on Pensions that Harry Arthurs is leading. When you look at the mandate, it looks pretty narrow. However, hopefully heʼs getting the message from people like me and others that it should be broadened.
BPM: Is this why you highlighted the chapter in your book about the UK pension commission that went beyond its mandate?
KA: Exactly, itʼs to say ʻdonʼt stop.ʼ Apparently the Ontario commission is already getting some pushback from the government in terms of making sure ʻyou stay within your mandate.ʼ It remains to be seen whether they do the right thing or not.
Another issue here is whoʼs ultimately accountable for pension policy? In the UK, youʼve got a minister of pensions. We donʼt have that. So youʼve got this question in Canada of ʻis it Human Resources and Social Development Canada, is it the department of finance, is it OFSI, or the Bank of Canada …?ʼ
BPM: Maybe we donʼt want one, however, because weʼd end up with 13 of them.
KA: That is an issue, but turn that around now and look at how successful the reform of the CPP was. It was a federal/provincial thing. It was a joint responsibility and the problem was analyzed and options were discussed. Paul Martin put a lot of political capital to seeing the thing through. So, weʼve done it.
Can we do it for the occupational pension plan system? Why not?
BPM: In your book, you offer TOPS, The Optimal Pension System, as a solution to the lack of pension plan coverage. Similar to what they are doing in the UK, this would be a large scale, mandatory pension vehicle designed to overcome issues such as member apathy or lack of education and adequacy of retirement benefits. I came away thinking that maybe we have that vehicle in Canada, the CPP Investment Board, and all we need is the desire to implement TOPS.
KA: This is where the UK is stuck right now, how do you do it?
The model, qualitatively, has got to have scale, itʼs got to be arms length, and it has to have good governance. I think the CPPIB has all three of those things, but I do think we run a risk if we put all our eggs in one basket.
I would prefer to see something happening thatʼs a little more diverse. I would like to see maybe an Ontario workplace pension plan. I would like to see an Alberta workplace pension plan. Maybe some of these things work better if youʼve got a unique workforce like the energy sector. Maybe we should have an energy sector pension plan.
So Iʼd like to see some more diversity, rather than just have one big thing. But then, you are left with the question of whatʼs the critical mass and where are the champions to make this happen? Thatʼs where the search is right now. We need the critical mass of people who can actually make things happen. ■
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
