Enabling Legislation

Canada Pension Plan Investment Board Act

Objectives of the CPPIB

To manage its CPP assets prudently and professionally in the best interests of contributors and beneficiaries, with a view to achieving a maximum rate of return without undue risk of loss.

Board of Directors

Composition: 12 directors; the Chair is selected from the 12. Selection: A joint federal-provincial nominating committee identifies (based on specific criteria) qualified candidates for director and provides recommendations on the reappointment of existing directors. From the nominating committee list, the federal government appoints the directors and the Chair, following consultations between the federal Minister of Finance and the Finance Ministers in the participating provinces. The Minister of Finance also consults with the board of directors on the appointment of the Chair. Qualifications: Directors must have proven financial ability or relevant work experience to allow the board to effectively achieve its mandate. Also, regional and gender balance are maintained on the board of directors.

Investment Policy for Assets of the CPPIB

Assets managed by the CPPIB are invested prudently in a diversified portfolio of securities, subject to broadly the same investment rules as other pension plans. The CPPIB determines the asset allocation strategy and at the present time has invested all of its assets in equities. The 30-per-cent foreign property limit applies.

Accountability Provisions

The CPPIB is accountable to the public and governments and reports its investment results regularly. It: makes its investment policies public; releases quarterly financial statements; publishes an annual report for tabling in Parliament; holds public meetings in each participating province at least every two years; and maintains a Web site at www.cppib.ca.

Rollover of Existing Borrowings From the CPP by the Provinces

Subject to funds being available, the provinces may roll over at maturity their CPP borrowings outstanding at March 31, 1997, at their own market rates for another 20-year term.

Prepayment of Borrowings From the CPP by the Provinces

The provinces may pay back their CPP borrowings prior to maturity at market rates.

Projected Assets of the CPPIB

As of September 30, 2002, the CPPIB had $17 billion under management. It expects to have between $125 billion and $150 billion under management within the next 10 years.