Some independent thinkers will try their best to prove these plans are inefficient and underperforming, while other observers think these organizations have done a great job. The two views might actually be more aligned when addressing how future-proof are these public pension funds. This question goes beyond the yearly performance discussion.\n<\/p>\n
There\u2019s a lot of variability in performance this year. We already know the performance of five of the Maple 8 pension funds. The absolute 2025 performances range from just higher than four per cent to more than nine per cent \u2014 quite a gap. However, the 10-year performance is much more stable and hovers around seven per cent. The performances of the remaining three plans might show absolute numbers at the low end of the range due to the fall in equities during the first quarter of 2026, but the 10-year performance isn\u2019t likely to significantly change.\n<\/p>\n
Read: U.K. looking to Canada\u2019s Maple 8 for inspiration in public pension reform: report<\/a>\n<\/p>\n However, there will be people who point out the 2025 relative returns are negative and, in some cases, quite significant too. This underperformance can be largely explained by the lagging performance of private assets versus their public market benchmarks.\n<\/p>\n Institutional investor researcher Alexander Beath explained this is largely due to the choice of the benchmark. He looked into the private equity performance, but his message is true for other private asset classes too. Still, is there cause for concern? After the global financial crisis of 2008\/09, the additional performance of private assets started to dissipate due to the effect of monetary and fiscal policies benefitting public markets. This trend reversed, but lately the public markets are performing very well again. Does this mean the private markets are dead? No, far from it and the possibility to earn a premium is still likely in the long run.\n<\/p>\n If the numbers still look fine, why is there a rationalization process happening at many funds? Several funds have closed foreign offices and laid off people. It\u2019s far-fetched to claim these cost-saving measures will benefit the members.\n<\/p>\n Read: 2025 Top 40 Money Managers Report: How \u2018Maple Middle\u2019 pension plans are finding an investment niche<\/a>\n<\/p>\n Assets under management are significantly larger than the operating costs and even if the funds were to reduce their workforce by 10 per cent, the impact on the performance is a couple of basis points at best. Moreover, it raises the question of whether these funds can do this without jeopardizing the quality of the investment organization. Weren\u2019t those foreign offices essential in gaining access to better local deals? And wasn\u2019t the internalization also a way to become smarter investors?\n<\/p>\n Perhaps the investment organizations, and\/or their boards, have come to the realization that their operations simply grew too big. But if that\u2019s true, the conversation should be about cost effectiveness instead of cost savings.<\/p>\n One could argue that technological developments, including artificial intelligence, will make many investment processes more efficient. Some experimentation does take place, but the reality is that many of the Canadian funds haven\u2019t reaped the benefits of AI yet.\n<\/p>\n