Manitoba's Premier announced today a move that is expected to create better returns for pensioners.

Manitoba currently has multiple externally managed pools of funds consisting mostly of pension plans, valued at approximately $40 billion. The government is challenging Manitoba public-sector funds to buy their investment management services together as a group. Brian Pallister says this smarter shopping move could easily result in $200 million or more in additional annual return of total assets. The move will reduce investment management fees and provide increased pension security for public servants.

"By centralizing the funds' investment management, we can achieve economies of scale, leading to improved financial gains for pension plans, while leaving more money on the tables of pensioners and workers," says Pallister.

The Premier says this siloed nature of investment management of Manitoba pension assets has resulted in higher costs and lower yields for investors. He adds a change like this will increase both savings and benefits.

"In Manitoba, we have not empowered pension plans to be smart shoppers when it comes to the investment management of this basket of funds," says Pallister. "Once pension plans coordinate their investments, we can generate better returns that will benefit pensioners and public servants."

The Manitoba government will meet with the pension funds in the coming weeks to encourage collaboration. The pension funds will be tasked with returning to government with a joint recommendation by March of next year.

"We have a significant opportunity for pension plans to reduce the fees they are paying today to managers in places like Toronto and New York," says Pallister.

He notes by reducing these costs, getting better returns and having access to new types of investments only available in larger pension plans, his government will improve the sustainability of these plans. Pallister suggests this will also reduce the need for higher contribution rates in the future.