Public Sector Pension Investment Board

The Public Sector Pension Investment Board is a government owned pension fund and management firm that was founded established by an act of parliament in 1999. The board is based out of Ottawa, Ontario and has an additional office located in Montreal, Quebec. Its mandate is to “manage the amounts that are transferred to it in the best interest of contributors and beneficiaries under the Plans with respect to Post-2000 Liabilities; and to maximize returns without undue risk of loss, having regard to the funding, policies and requirements of the Plans and the ability of those Plans to meet their financial obligations.” The board’s investment approach is focused around two key pillars: policy portfolio, which defines how assets are to be allocated amongst various classes of assets, and active management activities, which are designed to generate returns above the policy portfolio to assist in reaching the actuarial rate of return. Its investment objective is to “achieve an absolute return, net of expenses, at least equal to the actuarial rate of return over 10-year periods” and “achieve a return exceeding the Policy Portfolio benchmark over 4-year periods.” The Public Sector Pension Investment Board, or PSP Investments for short, has increased its net assets from $19 billion in 2005 to its current amount of over $94 billion with every year having a positive change except for 2009 due to the recession. The majority of these assets are in the Public Service Plan Account with other assets in the Canadaian Forces Plan Account, RCMP Plan Account, and Reserve Force Plan Account, in order of decreasing assets, with 75% of its assets being managed internally. In 2014, the PSP Investment Board saw a 16.3% total portfolio return, bringing in a net investment income of $12.6 billion and contributions of $5.0 billion. The majority of its assets are allocated in foreign equity, which alone makes up over a third of its assets, with the rest allocated in real-return assets, Canadian equity, nominal fixed income, and private equity, in order of decreasing amount.