Notes for an Ape Interview
by Erik Andersen
A matter of "first Principles". The design of the CPP Investment Plan makes it impossible for the investment managers to comply with a cardinal rule for regular investment advisors; the "Know your client rule".
Given this non-compliance condition, making investments at the CPP IB should not include the use of public or private common shares or any other form of private investment.
The avoidance of conflict of interest situations should not be entertained if for no other reason than it has very bad optics. The temptation to "socialize" private sector losses, or as I call it, going to the CPP Fund as "investor of last resort", is too great for even the saintly to resist.
It was and is my hope that the Minister of Finance will soon accept my characterization of the dangers in the investment design they are presently using. So far the very few replies I have were mostly relying upon the Chief Actuary's report indicating the Fund was sound for at least 75 years. I have raised the issue of the now-invalid assumptions used by the Actuary and have had only deafening silence.
Several examples of investments that bear out my concerns and illustrate why I think the CPP Fund is in harms way. Extending this criticism to other pension funds is equally valid as they all "eat from the same bowl", one provided by the international banking community.
