FINANCIAL SYSTEM REFORM. PENSION REFORM Implications for Pension Management

Transcription

1 FINANCIAL SYSTEM REFORM and PENSION REFORM Implications for Pension Management and CASE STUDY FIDUCIARY MANAGEMENT A Next Logical Step in the Evolution of Pension Management? KEY FORUM INSIGHTS AND POSSIBLE ACTION STEPS June 2009 A Discussion Forum Sponsored by Rotman International Centre for Pension Management Rotman School of Management University of Toronto Held June 9-10, 2009 Toronto, Canada Organization of this Document This document is organized into the following sections: 1. ICPM June 2009 Discussion Forum Agenda 2. Discussion Forum Attendee List 3. Post-Discussion Forum Feedback 4. Discussion Forum Summaries Financial System Reform 5. Discussion Forum Summary Case Study on Fiduciary Management 6. Discussion Summary Pension Systems Reform 7. October 2009 Discussion Forum Theme and Agenda (working draft) 8. Fall 2009 Rotman International Journal of Pension Management 9. Upcoming Discussion Forum Dates Prepared by Keith Ambachtsheer Adjunct Professor of Finance Director, Rotman International Centre for Pension Management Rotman School of Management, University of Toronto

2 Financial System Reform / Pension Reform DISCUSSION FORUM AGENDA June 9-10, 2009 Rotman School of Management, University of Toronto 105 St. George Street, Room 133 Tuesday, June 9 - Financial System Reform 8:30-8:45am Welcome and Forum Overview Keith Ambachtsheer, Rotman ICPM and Ann Henhoeffer, Rotman ICPM (Canada) 8:45-9:15am The Global Financial System: Rethinking Regulation Nick Le Pan is former Superintendent of Financial Institutions for Canada and current Chair of the Basel Accord Implementation Group (Switzerland). He will set the stage for this morning s discussions. 9:15 9:45am Reforming the Financial System Through Collaboration Cynthia Williams holds the Osler Chair in Business Law at York University (Canada). She will provide an overview of the global initiatives and solutions being proposed by the Network for Sustainable Financial Markets (NSFM). 9:45-10:15am Networking Break 10:15 10:45am The Yale Initiative: Reshaping Capitalism Stephen Davis, Millstein Center for Corporate Governance and Performance, Yale University (USA). He will present the highlights of a white paper on corporate governance and financial system reform to be published by the Center prior to the Forum. 10:45-11:15am The Role of Institutional Investors in Re-regulation Joe Dear, Chief Investment Officer of California Public Employees Retirement System and Chair of Council of Institutional Investors (USA). He will provide a progress report on the joint CII/CFA Institute reform initiative currently underway. 11:15-12:15pm Where Do We Go From Here? Ed Waitzer is former Chair of the Ontario Securities Commission, and currently holds the Jarislowsky Dimma Mooney Chair in Corporate Governance at York University (Canada). He will provide his observations on the presentations and related discussions. General discussion will follow on the question where do we go from here? 12:15-1:15pm Lunch 1:30-4:30pm Fiduciary Management: A Next Logical Step in the Evolution of Pension Management? Rob Bauer, University of Maastricht (The Netherlands) will direct our third ICPM Case Study. There are three sections each spanning one hour: Case Overview, Small Group Discussion, and Report Backs. 4:30-5:00pm Day One Wrap Up / Open Group Discussion led by Keith Ambachtsheer 5:30pm onward Cocktails and Networking Dinner ICPM Rotman International Centre for Pension Management Page 2 of 12

3 Financial System Reform / Pension Reform DISCUSSION FORUM AGENDA June 9-10, 2009 Rotman School of Management, University of Toronto 105 St. George Street, Room 133 Wednesday, June 10 Pension Reform 8:30-9:15am Why Have Firms in the United States Abandoned Traditional Pension Plans? Irina Stefanescu, Indiana University (USA), will present findings from a recently funded ICPM research project. 9:15-10:00am A Sponsor's Perspective on DB Funding and Investment Strategies Colin Kerwin, Global Pension Fund Manager for ExxonMobil (USA), will share his views on strategies to enhance value for participants and shareholders alike. 10:00-10:30am Networking Break 10:30-11:15 The Intergenerational Transfer of Public Sector Pension Promises Joshua Rauh, University of Chicago and NBER (USA), will present findings from a recent research project on this topic. 11:15 - noon The Future of Collective DC Schemes Roderick Munsters, APG Investments (The Netherlands), will discuss how the recent financial markets turmoil is impacting pension design and management in The Netherlands. Noon - 1:00pm Lunch outdoors at Woodsworth College located at 119 St. George Street 1:30-2:15pm Reforming the UK Pension System: A Progress Report Tim Jones, Personal Account Delivery Authority (UK), will share progress and remaining challenges to radically increasing pension coverage in the UK. 2:15 3:00pm Reforming the Canadian Pension System: A Progress Report Bill Robson, CD Howe Institute (Canada) will report on how pension reform is unfolding in Canada. 3:00-3:15pm Networking Break 3:15 4:00pm Reforming the US Pension System: A Progress Report Teresa Ghilarducci, The New School (USA), will share the impact of her recent book When I m Sixty-Four: The Plot against Pensions and the Plan to Save Them. 4:00 4:45pm Pension Reform in the Rest of the World Forum attendees from other countries are invited to provide updates on what is happening in their corners of the world. 4:45-5:30pm Day Two Wrap Up / Open Group Discussion led by Keith Ambachtsheer 5:30pm onward Closing Cocktails ICPM Rotman International Centre for Pension Management Page 3 of 12

4 ICPM June 2009 Discussion Forum Attendee List (June 9-10, 2009) Name Organization Country Leo de Bever AIMCo - Alberta Investment Management Corp. Canada Ron Liteplo Alberta Local Authorities Pension Plan Corp Canada Grant Howell Alberta Local Authorities Pension Plan Corp Canada Meryl Whittaker Alberta Local Authorities Pension Plan Corp Canada Menno Snel All Pensions Group (APG) Netherlands Edwina Neal All Pensions Group (APG) Netherlands Tom Steenkamp All Pensions Group (APG) Netherlands Roderick Munsters All Pensions Group (APG) Netherlands Wilson Sy Australian Prudential Regulation Authority (APRA) Australia George Pickering Bank of Canada Canada Nick Le Pan Basel Accord Implementation Group Canada Paul Gauthier BIMCOR Inc. Canada Chris Lawless British Columbia Investment Management Corp. (BCIMC) Canada Bill Robson C.D. Howe Institute Canada Richard Guay Caisse de dépôt et placement du Québec Canada Hélène Jacques Caisse de dépôt et placement du Québec Canada Joe Dear CalPERS USA Bart Oldenkamp Cardano Risk Management Netherlands Mike Heale CEM Benchmarking Canada Chris Flynn CEM Benchmarking Canada Terrie Miller CEM Benchmarking Canada Alwin Oerlemans Cordares Netherlands David Denison CPP Investment Board Canada Don Raymond CPP Investment Board Canada John Ilkiw CPP Investment Board Canada Steven James CPP Investment Board Canada Ole Beier Soerensen Danish Labour Market Supplementary Pension (ATP) Denmark Sybille Grob De Nederlandsche Bank Netherlands Colin Kerwin ExxonMobil USA John Crocker Hospitals of Ontario Pension Plan (HOOPP) Canada Jim Keohane Hospitals of Ontario Pension Plan (HOOPP) Canada Barbara Thomson Hospitals of Ontario Pension Plan (HOOPP) Canada Victoria Hubbell Hospitals of Ontario Pension Plan (HOOPP) Canada Irina Stefanescu Indiana University USA Beverly Topping Institute of Corporate Directors Canada Rob Prugue Lazard Asset Management Pacific Co Australia Rob Bauer Maastricht University Netherlands Syd Bone Melbourne Centre for Financial Studies Australia Jane Ambachtsheer Mercer (Canada) Limited Canada Stephen Davis Millstein Center for Corporate Governance and Performance (Yale) USA Harry Corbijn van Willenswaard Mn Services Netherlands ICPM Rotman International Centre for Pension Management Page 4 of 12

5 ICPM June 2009 Discussion Forum Attendee List (June 9-10, 2009) (cont'd) Name Organization Country Sadayuki Horie Nomura Research Institute Japan John Grace Office of the Superintendent of Financial Institutions (OSFI) Canada Alex Mazer Ontario Ministry of Finance Canada Graham Pugh Ontario Municipal Employees Retirement System (OMERS) Canada Philip Haggerty Ontario Municipal Employees Retirement System (OMERS) Canada John Macdonald Ontario Municipal Employees Retirement System (OMERS) Canada Michael Nobrega Ontario Municipal Employees Retirement System (OMERS) Canada Blair Cowper-Smith Ontario Municipal Employees Retirement System (OMERS) Canada Andrew Fung Ontario Municipal Employees Retirement System (OMERS) Canada Barbara Zvan Ontario Teachers' Pension Plan Board (OTPP) Canada Jim Leech Ontario Teachers' Pension Plan Board (OTPP) Canada James Davis Ontario Teachers' Pension Plan Board (OTPP) Canada Alfred Slager Pensioenfonds Stork Netherlands Jeroen Tielman PensionSummit Netherlands Tim Jones Personal Accounts Delivery Authority (PADA) United Kingdom Else Bos PGGM Netherlands Gert-Jan Sikking PGGM Netherlands Ann Henhoeffer Rotman ICPM Canada Keith Ambachtsheer Rotman ICPM Canada Paul Halpern Rotman School of Management Canada Alexander Dyck Rotman School of Management Canada Lukasz Pomorski Rotman School of Management Canada Tony Lally SunSuper Australia John Battams SunSuper Australia Kees de Vaan Syntrus Achmea Asset Management Netherlands Teresa Ghilarducci The New School USA Erik Valtonen Third Swedish National Pension Fund (AP3) Sweden Brett Hammond TIAA-CREF Investment Management USA Erwin Martens TIAA-CREF Investment Management USA David Blitzstein United Food & Commercial Workers Int l Union USA David Russell Universities Superannuation Scheme Limited United Kingdom Joshua Rauh University of Chicago USA Theresa Whitmarsh Washington State Investment Board USA Stephen Lerch Washington State Investment Board USA Edward Waitzer York University Canada Cynthia Williams York University Canada ICPM Rotman International Centre for Pension Management Page 5 of 12

6 Post-Discussion Forum Feedback This Forum generated more best one yet verdicts than any other. Using the standard Discussion Forum rating scale of Excellent / Good / Poor, the event rated as follows: June 2009 Forum Excellent Good Poor 65% 35% 0% (20 responses) (11 responses) (0 responses) Curiosity sent us back to look at the scores for the prior two Forums. October 2008 Forum Excellent Good Poor 67% 33% 0% June 2008 Forum Excellent Good Poor 73% 27% 0% Other specific compliments included: Great energy and people mix. Absence of vendors enhances frankness/openness of the discussions. Terrific case study. Could we do more with exploring/debating opposing views? I m still thinking about the implications of the discussions for our organization. Well-organized and executed. Stick with the full 2-day format. It was an absolute blast. But we can always do better: Use fewer speakers and dig down deeper. More Q&A and open discussion time. More networking breaks. More coffee. We also received some interesting topic suggestions for future Discussion Forums: Implications of pension funds as corporate owners. Climate change as a pension fund risk factor. Agency issues within pension funds. Cost structures and optimal pension fund size. Collaboration strategies among pension funds. Board member education. Improving pension regulation. Pension design issues: Is the DB model broken? Flexibility/sustainability? Annuitization strategies? Duly noted. ICPM Rotman International Centre for Pension Management Page 6 of 12

7 Theme #1 Financial System Reform Keith Ambachtsheer introduced the topic by observing that while pension funds did not cause the financial crisis, they were complicit in it in a number of ways. Some funds got caught up in the low risk mirage. Others did not play their proper role as knowledgeable owners of publicly-held financial sector corporations. This session examined two questions about the financial crisis: How should individual funds respond internally?; and, How should pension funds collaborate to respond externally? Former regulator Nick Le Pan observed that officials from various national and international agencies have identified leverage, risk concentrations, and financial sector capitalization/recapitalization as three important global crisis culprits needing fixing. International and national institutional spaghetti are barriers to any quick fixes. Lasting solutions lie in the directions of erecting effective early warning systems, enhancing meaningful disclosure, strengthening fiduciary standards, and building compensation schemes that align principal-agent interests. Whether the political will exists to see all this through remains to be seen. Legal expert Cynthia Williams provided the NSFM (Network for Sustainable Financial Markets) perspective on shaping financial system reform solutions. A voluntary global collaboration between financial markets participants and academics, NSFM acts as an incubator and catalyst for positive change. It has already produced important position papers on the duties of pension fund fiduciaries, on a number of regulatory issues, and on managing conflicts of interest. Work is underway in the areas of corporate governance, executive compensation, sustainability risks, and climate bonds. Corporate governance expert Stephen Davis provided highlights of the study The Yale Initiative: Reshaping Capitalism about to be released by the Millstein Center for Corporate Governance and Performance at the Yale School of Management. The study covers five areas: Say on Pay, Voting Proxies, Board Structure, Risk Oversight, and Shareowner Stewardship. Davis argued that dysfunctional shareowner stewardship constitutes a systemic risk to functional capitalism. The most direct pathway to better shareowner stewardship is more effective pension fund governance. CalPERS Chief Investment Officer and Council of Institutional Investors Board Chair Joe Dear discussed the role of institutional investors (especially pension funds) in moving to a more functional form of capitalism. He posed two existential questions for Forum participants to consider: How do you regulate market participants beliefs? (e.g., Alan Greenspan s belief that markets always self-correct); and, How do you create an effective systemic risk watchdog? (e.g., What tools and powers would such an agency have at its disposal? What gives us confidence these tools and powers would be used effectively?). The point is that we would be foolish to think that these questions have easy answers. Lawyer, writer, teacher, and former regulator Ed Waitzer led off the closing discussions on the financial system reform theme. He noted that myopic governments leading myopic people is an ever-present risk. How does the pension fund community exert maximum for good impact at this time? By reversing the financial services supply chain, which has historically seen service suppliers on top, and pension beneficiaries on the bottom. This will not happen without the global pension fund community playing an active leadership role. Market-based solutions should always be options for consideration. Social networking via organizations such as NSFM, the Yale Center, and ICPM adds an important new element to a systematic search for better organization structures and outcomes. Rebuilding trust in financial institutions is an important reform element. How do we do that? New regulatory approaches should be put through Phase I, II, III trials in the same way that new drug trials are tested. ICPM Rotman International Centre for Pension Management Page 7 of 12

8 Theme #2 Fiduciary Management: A Next Logical Step in the Evolution of Pension Management? Keith Ambachtsheer introduced the third ICPM Case Study and its author Rob Bauer. The first two ICPM Case Studies focused on fair value accounting and disclosure in DB plans, and on the ideal structure of the investment function. These cases continue to be successful vehicles for discussion and debate on these two important issues in both North America and Europe. The third ICPM Case Study focuses on the pros and cons of becoming a player in the still-new fiduciary management movement. The composite story is set in the Netherlands, and poses the question how the Chair of a pension plan Supervisory Board should respond to Chief Executive Officer Richard de Ridder s proposal to begin offering the organization s investment and pension administration services to other pension funds both inside and outside the Netherlands. Educator and consultant Rob Bauer conducted a lively first impressions debate, which led to the majority (almost 2/3rds) of the Case discussion participants to vote yes to the question of whether the Chair should go along with the CEO recommendation. Rationales for this view included: Enhanced organization scale will reduce unit costs and attract new talent. Enhanced profitability would benefit the original members/owners. Possible to protect original members/owners interests through contractual transparency. New clients should have a minimum size. After an hour of discussions and debate, the group broke into nine small-discussion groups. After another hour of discussion and debate, a number of the small groups came out strongly against the CEO recommendations in the report-back for the following reasons: The bigger scale argument does not hold water because it would take too long to achieve it by developing third-party mandates. If scale is a problem, the fund should merge its investment and pension administration groups with those of a much larger pension delivery organization. By focusing on developing third-party mandates, the organization is going to pay less attention to the needs of the original members/owners. The proposal involves significant legal and operational risks that have not been properly thought through. (Indeed, one group thought Richard de Ridder a bit of a megalomaniac ). At the end of the report-back, Bauer asked for another vote. Now a majority of the participants voted no (almost 2/3rds). It looks as though Chief Executive Officer Richard de Ridder needs to go back to the drawing board. The strategic message from the Case Study participants is be careful what you wish for: fiduciary management poses greater challenges than you may think. ICPM Rotman International Centre for Pension Management Page 8 of 12

9 Theme #3 Pension Reform: Implications for Pension Management Keith Ambachtsheer pointed out that while we are the International Centre for Pension Management, we ignore pension design issues at our peril. Management needs context, and that is what pension design provides. Specifically, design issues involve fundamental questions such as: What do sustainable pension formulas look like?; How and by whom are the risks to be borne? ; and, What should be the respective roles of governments, employers, and the financial services industry in pension design? These questions will be addressed by having a close look at the sponsorship of corporate and public sector DB plans and what is happening at the national pension reform front in a number of countries. As usual, the day closed with a what have we learned? discussion. Researcher Irina Stefanescu examined a large database of American corporate DB plan changes (e.g., terminations, conversions, and freezes), focusing especially on the Telecommunications and Airlines Industries. Along with co-researcher Joshua Rauh, she found that these plan changes tended to be concentrated in firms with relatively high leverage, low interest rate coverage, and high benefit payments. After the changes are made, total benefit costs are not reduced right away, but eventually materialize from avoiding future DB accruals. Benefits Finance and Investments Manager Colin Kerwin provided a counterexample reflecting the thinking of a financially-strong employer in the global energy business. He advocated taking an integrated view of corporate and DB pension plan finance, with the sponsor simply a pass-through between shareholders and the plan, and the plan a pass-through between the sponsor and participants. This logic leads to immediate and full-funding, and DB balance sheet immunization for financially-strong employers. Researcher Joshua Rauh questioned the adequacy of funding and financial disclosure in public sector pension plans in the United States. A collection of 116 major state plans recently reported $1.9T in assets vs. $2.7T in liabilities using discount rates in the 8% area. If discount rates based on general obligation state bonds are used instead, pension liabilities rise the $3.1T. If the risk-free rate is used, they rise further to $5.1T. Conclusion: the use of highly-optimistic liability discount rates in DB pension plans is seriously distorting the accuracy of state financial reporting. Chief Investment Officer Roderick Munsters noted that the combination of the financial crisis and the current regulatory regime is forcing changes in the Dutch pensions market. At the political level, sustainability and raising the retirement age are being discussed. At the pension plan level, design changes are being considered (e.g., First DC, then DB ). At the pension organization level, further industry consolidation through fiduciary management arrangements is likely. Tim Jones is charged with creating an arms-length pension delivery organization for workers in the United Kingdom without employment pension plans. Features will include auto-enrolment, good governance, low-cost, and simplicity. Among the remaining challenges: many small pots initially, structure of default fund, inexperienced employers, getting the kinks out before January 1, 2012 start date. Think-tank Chief Executive Officer Bill Robson laid out the status of pension reform in Canada. He noted a continued reluctance to let go of the traditional single-employer DB plan model, despite its now-well documented shortcomings. Three recently-completed provincial pension reform studies and a new government working group may be the catalysts needed to bring about much-needed reforms in Canada s voluntary pensions sector comprising both DB and capital accumulation plans. ICPM Rotman International Centre for Pension Management Page 9 of 12

10 Labor economist Teresa Ghilarducci asserted there is a retirement crisis in the United States, and Americans have woken up to it. The current voluntary system based on 401(k) plans is not the right answer. Instead, a Guaranteed Savings Account system is needed which converts employers and workers contributions invested in pension accounts (which carry a 3% real return guarantee) into inflation-adjusted annuities at retirement. This new pension pillar in the United States would be managed by the Social Security Administration. In the wrap-up session led by Keith Ambachtsheer, some of the key conclusions were: DB plans continue to struggle with proper costing and disclosure issues, especially in the public sector. Coverage of private sector workers continues to be a big issue in the United Kingdom, the United States, and Canada. The United Kingdom has decided to deal with this issue, and is implementing a plan that includes some government start-up involvement. Canada is thinking along these lines as well. The United States is still in yes/no debate mode. There is still no consensus anywhere yet on the best decumulation/annuitization strategies. The corporate case study presented by Colin Kerwin offers a clear example of when DB arrangements work well: a fully-defined benefit which is fully costed and fully funded, with the proceeds invested so there is only minimal mismatch risk on the DB balance sheet. In short, there are still no final answers to the really big pension design and delivery questions. ROTMAN INTERNATIONAL JOURNAL OF PENSION MANAGEMENT Theme: Innovation in Pension Design and Reform FALL 2009 Look for the next issue of the Journal in mid- October. Many of its articles will be based on the research and presentations featured in the recent June 2009 Discussion Forum, which were summarized above. UPCOMING DISCUSSION FORUM DATES Events are by-invitation only. For more details contact icpm@rotman.utoronto.ca October 14-16, 2009 Melbourne, Australia (see below for Working Agenda) June 8-9, 2010 Toronto CANADA October 12-14, 2009 DENMARK ICPM Rotman International Centre for Pension Management Page 10 of 12

11 Wednesday Evening, October 14 ICPM October 2009 Discussion Forum October 14-16, 2009 Melbourne School of Business, University of Melbourne, Room TBA 200 Leicester Street, Carlton, AUSTRALIA Events are by-invitation-only THEMES, TOPICS, AND SPEAKERS (Working Draft) Opening Reception and Dinner (sponsored by Government of Victoria) Welcoming Remarks The Hon. John Lenders MLC, Treasurer, Minister for Financial Services and Information and Communication Technology, State of Victoria (Invited) Thursday, October 15 Theme: Pension Things that Australia and New Zealand Can Teach the World... and Vice Versa Morning: Pension Design Perspectives Introducing a new international index of pension system effectiveness Dr. David Knox, Worldwide Partner, Mercer will unveil this new index, a collaborative initiative with the Melbourne Centre for Financial Studies and the State of Victoria The KIWISavers Plan Diana Crossan, New Zealand Retirement Commission Choosing Not to Choose: The Impact of the Australian Choice of Fund Initiative Josh Fear, Australia Institute, and Geraldine Pace, Australia Securities and Investment Commission Pension Decumulation and the Role of Life Annuities Paul Murphy, UniSuper A Regulatory Response to the Financial Crisis: the Case of APRA Ramani Venkatramani, Australian Prudential Regulation Authority Lunch: Pensions in the Australian national fabric Current Issues The Hon. Nick Sherry, Minister for Superannuation and Corporate Law (invited) Afternoon: Organizational Perspectives The CEM Benchmarking Inc. database is the most comprehensive in the world on pension fund management and performance. What does it teach us about pension fund management practices in general? What were the special lessons of the 2008 financial markets debacle? Keith Ambachtsheer will lead this session. APRA continues its research into the organizational structure of superannuation delivery in Australia: three issues being addressed include metrics for trustee performance, links to fund performance, and organizational structure Wilson Sy and APRA Colleagues Contrasting APRAs organizational structure research findings in Australia with those for pension systems elsewhere in the world Leo de Bever, Alberta Investment Management Corporation (AIMCO) An Immodest and (likely) Unpopular Proposal Regarding Pension Management and Delivery Jack Gray, Sydney University of Technology Panel Discussion: Where Does Industrial Structure in Australia and Elsewhere Go From Here? (There will be many knowledgeable people at the Forum able and willing to speak to this question). Evening: Networking Reception and Dinner ICPM Rotman International Centre for Pension Management Page 11 of 12

12 Friday, October 16 THEME: The Financial Crisis and Pension Fund Management: Lessons Learned and Actions Implied FRAMING: Much has happened since the beginnings of the global financial crisis first emerged in the middle of 2007, and then erupted in full force in late Pension funds and their stakeholders have not been spared the painful consequences. Fundamental questions are now being asked about how pension funds were managed prior to the crisis, what lessons were learned throughout the crisis, and how those lessons should impact how pension funds should be managed today and tomorrow. Day #2 explores these questions with the thought-leaders of the global pension management community through a structured process, with the goal of finding actionable answers. STRUCTURE: The day will be organized around finding actionable answers in four critical success dimensions of pension fund management: (1) Investment Beliefs, (2) Risk Management, (3) Governance and Organization Design, and (4) Stakeholder Relations. 8:30am 10:30am Plenary Session that covers each of the four management dimensions. Each speaker(s) will lay out the key issues and questions, followed by general group discussion (e.g., agreement / disagreement / further extensions). Kick-Off for Topics (1) through (4) Adrian Orr / Tim Mitchell, New Zealand Superannuation Fund Topic (2) TBA a European Fund CEO Topic (3) Syd Bone, formerly with VFMC / Leo de Bever, AIMCo and formerly with VFMC Topic (4) Theresa Whitmarsh, Washington State Investment Board 10:30 11:00am Break 11:00 12:30pm Break Out Session for small groups charged with tackling one of the four management dimensions in greater detail (e.g., what issues/challenges lie behind the broad questions, and how should pension funds respond/go forward?) 12:30 1:30pm Lunch 1:30 3:30pm Report Back Session 3:30 4:00pm Break 4:00 5:00pm Wrap-Up Session / Actionable Agenda 5:00pm onward Closing Reception... or continue the day s discussions. ICPM Rotman International Centre for Pension Management Page 12 of 12