Pensions are billion dollar businesses. HOOPP for example, is worth ~$114 billion (as of Dec 2021), up from 104 billion in 2020; that’s about an 11.28% gain. But how much of that 10 billion increase do you think that the members of the pension actually benefit from? Was it the full amount? Or perhaps only a fraction of that? And if so, where did the rest go? And more interestingly, how is HOOPP increasing in net value when more pension dollars are being paid out each year than are being contributed? Sounds sketchy to me…
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Anyone who knows a little bit about investing and related strategies knows that it’s very beneficial to have a diversified portfolio. This helps reduce risk while maximizing long term returns. Anything from various combinations of stocks, bonds, real estate, to cash holdings, etc. The point is to not have all your eggs in one basket, lest the basket breaks and all your eggs get cracked.
The same could be said of pension plans. But how do you know what those plans are investing in? It’s never in their news letter. It’s not directly on their main website pages. You have to dig a little, and even then, it’s somewhat murky.
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Ask anyone in Ontario. What is the best pension plan out there? The answer I’ve most often come across is the Teachers’ pension! Not only is it widely touted (perhaps not by Teachers themselves) that they are paid well, but that they also seem to have the best pension plan in existence.
If you ask the same question of healthcare workers, they may also name the Teachers. But healthcare in much of the province has their own solid pension which many also rave about.
Do Ontario Teachers really have the best pension? Or do healthcare workers have the best? And what exactly does it mean to have “the best” pension? Are there better ones out there? And can we figure out all of this without the topic ending up dryer than sand-paper in the desert? And will we run into any cactuses along the way? And will I ever stop making really terrible desert jokes? Let’s find out!
Welcome to Pension Wars!
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