Current State of Laurier’s Pension and Endowment Funds

The policies under review govern the investment and management of the pension fund and endowment funds. The pension fund is invested on behalf of university employees and retirees who have contributed to the pension plan during the course of their employment. The endowment funds are established using donated funds, and the income is used primarily to support student scholarships, faculty appointments, and research. The pension and endowment funds and their investments are governed by legislative, common law and contractual requirements, as well as university policies, and cannot be used for anything other than their designated purposes. The Board through its committees and the Investment Oversight Sub-Committee (IOC) are responsible for overseeing the management of these funds.

Each investment fund has a Statement of Investment Policies and Procedures (SIPP). The SIPPs contain explicit directions on how the funds are to be managed, permitted categories of investments, fund objectives, portfolio diversification parameters and risk/return expectations. Each Laurier SIPP contains a statement on environmental, social and governance (ESG) factors as follows: “The Plan’s active investment managers may consider all qualitative and quantitative factors affecting financial performance of existing and potential investments, including environmental, social and governance (ESG) factors. An investment manager’s ability and desire to incorporate ESG factors into their investment selection process may be used as part of the decision criteria when evaluating investment opportunities.” IOC has also adopted a Statement on Socially Responsible Investing.

The funds are invested on behalf of the university by external investment management firms chosen in accordance with the university’s policies and provincial legislation. Because the university’s investment funds have long-term objectives, the university has predominantly invested with managers who have a long-term view for their investments. It should be noted that these funds are a pooled fund type, meaning that the individual investment manager selects the specific investments and Laurier, along with other investors, purchases units within the pooled fund. The university does not currently invest in individual equities. This is the most economical option for an investor of Laurier’s size to achieve the return required to support the purposes of the pension and endowment funds at an appropriate level of risk.

To understand the university investment funds’ exposure to Carbon Underground 200 (CU200) companies, administration and external advisors undertook an analysis by fund, which shows that the average exposure as at Dec. 31, 2016 is under 5%.