When the custodian of public pension funds, British Columbia Investment Management Corporation, revealed poor results for fiscal year 2019-2020, I knew there was another shoe to drop. This week, BC nurses received this notice from BCNU:
Nurses are counting on retirement security. Therefore, it is important that all BCNU members are aware of and understand the proposed changes recently announced by the Municipal Pension Plan.
For our members, the proposed MPP redesign would result in fewer choices, a major reduction in pension income for those wanting to retire early and contribution costs for nurses that are higher than they should be – this is unfair.
The announced Municipal Pension Plan redesign could have serious consequences for nurses…
What does the proposed Municipal Pension Plan redesign mean for you?
– You have less control.
– You’ll get less than you deserve.
– You’ll pay more than you should.
So, pensioners who are part of BC’s Municipal Pension Plan take a hit, mostly because the stock market was near its recent low on the last day of fiscal year 2020. As noted below, senior executives gained massive rewards.
I guarantee one thing. Those same executives will be in line for huge increases in the current year and that will be justified by March 31 valuation losses being recovered in subsequent months.
As I wrote in the title: heads they win; tails we lose.
Corporate reports issued each year ought to provide an accurate and fulsome picture of positions and prospects. Some do; some do not.
The Annual Report of British Columbia Investment Management Corporation (BCI)—investor of this province’s public pension funds—promotes more than it informs. It is laden with self-praise but lacking in meaningful data.
The fiscal year ended March 2020 was not a rewarding one for public pension funds run by BC Investment Management Corp. The rate of return earned was less than half that of the preceding year and failed to meet client benchmarks.
While current and future pension beneficiaries did poorly, the people running BCI did swimmingly well.
Here are the increases received by BCI’s top five paid employees in FY 2020:
Perhaps you surmise those hefty wage increases were needed because these folks had been lagging, maybe suffering a decade long freeze like that imposed on BC’s Persons With Disabilities.
Well, you would be wrong.
Regardless of whether investment returns are above or below conveniently flexible benchmarks, massive salary increases are given. For pensioners, this fits the old quip, “Heads they win; tails we lose.”
As written here previously, Washington State Investment Board (WSIB) is somewhat comparable to BCI. The American organization manages about C$200 billion in assets, while BCI’s Annual Report shows C$171 billion. But, similarities end there.
WSIB typically gains better returns than BCI. In 2019, it earned 8.4% while BCI gained 6.1%, a one-year difference in the $4 billion range. That superior performance has been repeated frequently over the past decade.
WSIB operates with a fraction of the overheads of BCI, pays substantially lower salaries but has a healthy retention rate. WSIB’s most senior officers have been in place longer than those at the BC counterpart.
This demonstrates the scale of difference.
For years, the Chief Executive Officer of BC Investment Management Corporation has been the highest paid leader of any public body in BC. Yet the scale of earnings draws surprisingly little coverage in corporate media.
During times that pay restraint was imposed on most everyone in the province, and despite government promises that executive compensation would be moderated, BCI kept writing ever larger cheques to its executives.
I am told that what BCI reports is only part of the annual earnings of its senior executives. Some are rewarded as Directors of other organizations, including companies where BCI is a material investor.
Categories: BC Investment