America’s Public Pension Challenges Can Be Fixed. Canada Is Proof.
— August 14, 2020
By Ingo Walter and Clive Lipshitz
In a comparative study of the largest U.S. and Canadian public pension plans, we explored pension reform in Canada in the late 1980s and 1990s. Prior to those reforms, Canadian policymakers worried about the integrity of the country’s public pension system. Decades later, the system is considered among the best in the world. Our data show that on almost all metrics the Canadians outperform their U.S. peers, so the Canadian experience offers some useful lessons for reforming the American public pension system.
One of the key lessons is that scale matters, and there are ways to achieve scale even for smaller pension funds through the pooling of assets. We call this the consortium model of pension system design.
Read the full Institutional Investor article.
Ingo Walter is a Professor of Finance Emeritus at New York University Stern School of Business.