2017 Annual meeting highlights
The Co-operative Superannuation Society's delegates met in Saskatoon on April 5 and 6, 2017 for the delegate seminar and annual meeting. Along with reflecting on the past year's successes and challenges, the expected low-return environment topped the agenda.
Delegate seminar
An information session for the delegates was held the evening prior to the annual meeting. Brent Godson, the Plan’s Investment Manager, delivered a presentation about the anticipation of a low-return environment in the capital markets, which has existed within the investment community for some time.
Since 2012, we’ve been making changes to the Balanced Fund (BF) - our default investment fund - in anticipation of future lower returns. But the question remains: do we need to consider further changes? A number of potential options were discussed:
- ‘Do nothing / wait and see’ approach - This approach would avoid the risk of potentially making a wrong decision and overreacting. However, it would add the risk of getting left behind if returns are lower going forward.
- ‘Take on more risk’ approach - Selling off bonds and investing more in equities may increase the BF’s potential return. Adding more risk, however, increases volatility and may not be appropriate for members invested entirely in the BF and are nearing retirement.
- ‘Alternative assets’ approach - Investing in alternative asset classes such as real estate, infrastructure emerging debt, global bonds, etc. can offer a higher potential return, but are typically more complex, not as liquid, and come with higher investment management costs compared with typical asset classes such and equities and bonds.
Table-top discussions on the approaches presented revealed that generally all the delegates felt that taking a “wait and see” approach would not be appropriate, but the Plan should investigate options to increase the potential return of the BF. Delegates also felt that in light of an anticipated lower return environment, perhaps members will need to also contribute more towards their retirement and work longer.