Canadian pensions expert Keith Ambachtsheer says fund chiefs should read a 34-year-old book by the late management guru Peter Drucker, for ideas about how the pension industry should develop.
Ambachtsheer, who is director of Rotman International Centre for Pension Management in Toronto, said ‘The Unseen Revolution’ was decades ahead of its time. The book predicted that the massive wave of retirement savings would offer an opportunity to make capitalism work for workers - as long as pension managers were willing and able to achieve that goal.
Effective pension institutions anticipate issues of fairness, sustainability and transparency before they become obvious problems, Ambachtsheer said. Such managers paid attention to five drivers of success: aligning the interests of stakeholders with the people who run the fund; good governance; sensible investment beliefs that chimed with market conditions; paying well; and being the right size. Research suggested larger pension funds performed better than smaller institutions, Ambachtsheer said, although he warned against possible diseconomies of scale.