The impacts of climate change on the long-term viability of public and private pension plans

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With more than $3T invested in pension funds, millions of Canadians rely on private and public pension plans for their retirement. But by potentially impacting growth in various sectors of the economy, in addition to affecting mortality, natality and immigration patterns, climate change could disrupt the viability of public and private pension plans.To address these issues, Retraite Québec will work in collaboration with researchers from Université du Québec à Montréal and Simon Fraser University towards the following goals: (1) create a climate-based methodology to model and assess risk in pension funds (i.e., investment, inflation, demographic, and insolvency risks), (2) train actuaries and risk managers to become climate change leaders, especially in the pension context, and (3) accelerate the implementation of climate initiatives in pension risk management practices.The methodology put forward in this research proposal will benefit Canada by making it possible for actuaries to assess climate risk with a special focus on the pension context. This will in turn protect savings of millions of Canadians who benefit from private and public pension plans. It will also benefit our economy by providing proper means to train pension and investment actuaries to become leaders in climate change through risk reduction for future retired Canadians and asset allocation reducing our carbon footprint. The knowledge transfer expected as a result of this partnership will also serve as a springboard for the implementation of climate initiatives by raising awareness on the issues.