Talking to Tim Calibaba

April 12, 2012

Tim Calibaba podcast

Hi,

My name is Sheryl Smolkin. I’m a pension and benefits lawyer and journalist. Today I’m continuing with our series of interviews with the people behind the scene at the Saskatchewan Pension Plan

Tim Calibaba has an extensive background and experience in many aspects of the financial services industry going back more than 30 years.  In 2009 he received a designation from the prestigious Institute of Corporate Directors, Rotman School of Business, University of Toronto.

Currently he is serving as a member of the Board of Trustees for the Saskatchewan Pension Plan. He is also on the Boards of Directors of both Stone Investment Group and independent wind energy firm, Kineticor Renewables Inc.

Today Tim is going to answer some questions about how the Saskatchewan Pension Fund is invested.

Welcome Tim. Thanks Sheryl.

Q.  Tell us a little more about your investment background and experience.

A. Well, I’ve been in the mutual fund industry for many years. I started my own business back in 1986 in Saskatchewan. At that time we were just a small Saskatchewan based-company only operating in that province. Since then we expanded over a 20 year period from British Columbia right through to Ontario.

When we sold our business and merged with Berkshire Investments we had 400 advisers across Canada and over $4 billion in assets under management. As an independent mutual fund dealer, we were primarily focused on looking for the best investment managers for our clients’ money.

Q. What role do the Trustees have in investing funds deposited by SPP members?

A. Well, the first thing the Board has to do is set what is called the Investment Policy Statement. So we make a decision about where we want the funds allocated to from the standpoint of various countries, the portion in stocks, bonds, real estate – that sort of thing.

We set the policy and then we search for the best managers to fulfill that policy and make those investments on behalf of our customers. Then we basically follow through on the selection and monitoring of those managers.

Q.  What style of investing does the Board adhere to?

A. The Board has always had a very diversified style. One of our two managers is Greystone and that company has a growth style. The other manager is Leith Wheeler in Vancouver which has more of a value investment style.

As part of those styles then we also allocate to different countries, so we have a portion invested in international funds and the U.S. We feel that diversification is very important with a combination of styles and allocation of assets on a global basis.

Q. How does the Board monitor and get advice on investments?

A. The Board meets quarterly and at every quarterly meeting we have our independent consultant Aon Hewitt who does the management research for us. They review the manager’s performance – not just of our managers but of other managers that are available to pension funds and they report to us every quarter how our managers are doing and if there is any changes at their firms we should be worried about. And at every meeting we bring in one of the managers as well as Aon Hewitt so we can talk to them face to face.

Q. How has the SPP balanced fund performed as compared to market benchmarks over its 25 year history?

A. It’s actually done very well. It’s had a performance of 8.2% for 25 years which is pretty outstanding and approximately one percent better than the benchmark. Part of the reason is the low cost and efficient operation.

With the expense ratio around one percent it obviously helps the investors.

Q.  Why do you think SPP is a good investment to build retirement savings for members?

Well first of all, I think you have to look at the 25 year history. A fund that has been around that long and has done that well has obviously proven itself and that’s important if you are looking for a place to invest your money for retirement.

We have also have a low management expense ratio, as I mentioned before. We have a very diversified style with the two different management styles and we are diversified internationally with a real estate and bond component. So I think overall we have a very strong portfolio. With the balanced approach it does help to minimize the effects of the ups and downs in the market.

We also have a pension plan available to small business owners that is very low cost and very simple for any business, whether Saskatchewan based or outside of Saskatchewan to participate in.

Thanks very much Tim. I appreciate that you were able to take time from your busy schedule to talk to us today.

financial planning, Return on Investment, Talk with SPP

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