About the Bank
Management and Administration
Terms of Reference
Bank of Canada
Terms of Reference
Pension Fund Investment Committee
Creation
The Pension Fund Investment Committee is hereby established by the Pension Committee of the Bank of Canada.
Governance
Committee Membership:
The Committee shall consist of the Principal, Pension Fund, Financial Markets Department, or a designated replacement, and at least two senior officers of the Financial Markets Department, chosen by the Chief of the Financial Markets Department. The Pension Coordinator is an ex officio member of the Committee but does not have a vote.
Chair:
The Chair of the Pension Fund Investment Committee shall be the Chief of the Financial Markets Department or a senior officer on the Committee chosen by the Chief.
Presiding Officers:
The Chair will preside at meetings of the Pension Fund Investment Committee. In the absence of the Committee Chair, one of the other members of the Committee shall be chosen by the Pension Fund Investment Committee to preside.
Secretary:
The Committee shall appoint a Secretary.
Meetings:
The Pension Fund Investment Committee shall establish the date, time and place of its meetings, provided that it meets no less frequently than quarterly. Meetings may be conducted by phone. The Pension Fund Investment Committee may hold a special meeting at any time upon written or verbal notice from the Chair. If the Chair is absent or if the position is vacant, a member of the Pension Fund Investment Committee may call a special meeting.
Records:
The Pension Fund Investment Committee shall keep minutes of its meetings and shall record in such minutes all decisions of the Pension Fund Investment Committee and the factors which have been considered by the Pension Fund Investment Committee in reaching its decision. The Pension Fund Investment Committee may make decisions without having a meeting, provided that a record of such decision is confirmed by the Committee. Such confirmation shall be either in written form or communicated by email. Furthermore, in accordance with the section on Delegation, the Pension Fund Investment Committee may delegate decision-making authority on some issues. Decisions made under such delegated framework will be reported to all Pension Fund Investment Committee members and recorded. All minutes of meetings, records of all decisions, records of delegation and any other pertinent records shall be kept by the Secretary.
Reporting:
The Pension Fund Investment Committee shall prepare and deliver on an annual basis the Pension Trust Fund Annual Investment Review, the Supplementary Trust Fund Annual Review, as well as any amendments to the Statement of Investment Policies and Procedures and the Pension Fund’s Internal Investment Guidelines.
The Pension Fund Investment Committee shall prepare and deliver quarterly written reports to the Pension Committee.
The quarterly reports made by the Pension Fund Investment Committee to the Pension Committee shall include, without limitation, the following:
- An evaluation of all investment activity, including transactions and performance of the Funds. This performance report shall be based on market values for the Funds’ marketable securities and on best external independent estimates of fair value for non-marketable securities.
- A summary of all other activities and initiatives undertaken by the Pension Fund Investment Committee during the relevant period.
The Pension Fund Investment Committee shall prepare and deliver monthly performance reports on the Operations of the Pension Trust Fund and the Pension Trust Fund Portfolio Listing by Security.
The Chair of the Pension Fund Investment Committee shall make such other periodic reports to the Pension Committee with regard to any matter for which the Pension Fund Investment Committee is responsible or with regard to the activity of the Funds at such times as the Pension Committee may request or as the Chair of the Pension Fund Investment Committee shall deem necessary or appropriate.
Standard of Performance:
The Pension Fund Investment Committee shall exercise, in the administration and investment of the Funds, the degree of care that a person of ordinary prudence would exercise in dealing with the property of another person.
The Pension Fund Investment Committee shall invest the assets of the Funds in accordance with the Pension Benefits Standards Act, the Pension Benefits Standard Regulations, and the Income Tax Act, and in a manner that a reasonable and prudent person would apply in respect to a portfolio of investments of a pension fund.
The Members of the Pension Fund Investment Committee who possess, or by reason of profession or business ought to possess, a particular level of knowledge or skill relevant to the administration of a pension plan or pension fund shall employ that particular level of knowledge or skill in the administration of the Pension Plan, the SPA, and the Funds.
The Members of the Pension Fund Investment Committee may rely in good faith on financial statements of the Pension Plan, SPA and the Funds prepared by an accountant, or a written report of the auditor or auditors of the Pension Plan, the SPA, and the Funds that has been represented to the Members of the Pension Fund Investment Committee as fairly reflecting the financial condition of the Pension Plan, the SPA, or the Funds, as the case may be.
The Members of the Pension Fund Investment Committee may rely in good faith on a report of an accountant, an actuary, a lawyer, a notary or other professional person whose profession lends credibility to the report.
The members of the Pension Fund Investment Committee shall comply with the Pension Committee's policies with respect to the attendance of committee members at educational and orientation sessions.
Compliance with Policies:
Members of the Pension Fund Investment Committee shall comply with policies adopted by the Bank or the Pension Committee from time to time including the Bank's policy on Conflict of Interest, Pension Administration Code of Conduct and other policies that may be adopted by the Bank of Canada that are applicable to those persons that exercise fiduciary duties in connection with the administration of the Pension Plan, the SPA, or the Funds.
Delegation:
Where the Pension Fund Investment Committee determines that it is reasonable and prudent in the circumstances, the Pension Fund Investment Committee may delegate to any director, officer or employee of the Bank or to any outside agent any act required to be done by it in connection with the administration and investment of the Pension Plan, the SPA, or the Funds provided that the Pension Fund Investment Committee is satisfied as to the suitability of such director, officer, employee or outside agent to perform such act and provided further that the Pension Fund Investment Committee carries out such supervision as is reasonable and prudent.
Quorum:
A majority of members of the Pension Fund Investment Committee shall constitute a quorum.
Duties:
The Pension Fund Investment Committee has the following responsibilities:
- Direct the management of the investment portfolio of the Pension Plan Fund and the "investable portion" of the SPA Fund in accordance with the official Statement of Investment Policies and Procedures and the Internal Investment Guidelines for the respective Funds and any specific directives from the Pension Committee. This includes, but is not limited to pursuing the Funds’ rate of return objective without taking undue risk; undertaking regular valuations of the assets of the Funds; advising the Pension Committee on the effect of currency movements on the risk profile of the Funds’ portfolio and, when deemed appropriate and approved by the Pension Committee,
taking steps to protect the portfolio from the impact of such currency movements; exerting discretion in exercising the voting rights pertaining to securities held by the Funds; making recommendations to the Pension Committee as to the selection and replacement of external investment managers and trustees of
the defined benefit portion of the Pension Plan Fund and of the SPA Fund, as well as monitoring and managing the performance of those managers and custodians. The Pension Fund Investment Committee will also have joint responsibility with the Pension Administration Committee for recommending to the Pension Committee fund managers and trustees for funds established under the defined contribution portion as well as for monitoring and managing the performance of those managers and trustees.
- In monitoring and managing the performance of Investment Managers, the Pension Fund Investment Committee will ensure that each Investment Manager undertakes to exercise the care, diligence and skill in the investment of the Funds that a person of ordinary prudence would exercise in dealing with the property of another person and that the Investment Manager further undertakes to use, in the investment of the Funds, all relevant knowledge and skill that the Investment Manager possesses or by reason of his profession or business qualifications ought to possess. The Pension Fund Investment Committee shall
require each Investment Manager to comply with the Statement of Investment Policies and Procedures and to administer the Funds in compliance with the requirements of the Pension Benefits Standards Act, the Pension Benefits Regulations and the Income Tax Act, and the investment mandates established by the Pension Committee and approved by the Board from time to time.
- Advise the Pension Administration Committee and the Pension Committee in the selection and maintenance of an "investment choice menu" for the defined contribution plan.
- Make recommendations to the Pension Committee regarding the management of assets or any other issue related to the Statement of Investment Policies and Procedures and the Internal Investment Guidelines and any recommended changes thereto. The PFIC will consider various factors for its recommendations, including any changes in plan liabilities as reported by the Pension Administration Committee, any changes in the expected return of assets, and any implications
those changes may have on the surplus or deficit positions of the Funds.
- Meet with the trustee or trustees of the Funds at least once annually and review the monthly reports provided by the trustee or trustees.
Such other responsibilities as may be assigned by the Pension Committee from time to time.
Amendments:
The Pension Committee shall have the authority to amend this Pension Fund Investment Committee Terms of Reference from time to time.