Power Financial CEO Jeffrey OrrFernando Morales/The Globe and Mail
Any changes to Canada's public pension system for retirees shouldn't be made at the expense of private pensions plans, the chief executive of Power Financial Corp. said Thursday.
The insurance and investment management conglomerate is closely watching the debate on how to improve pensions for Canada's retirees and CEO Jeffrey Orr said both systems "are very well balanced and very strong."
"We need to bring about some improvements but we don't need to destroy what already exists," he told shareholders, after Power Financial reported an increase in its latest quarterly profits.
Power Financial is supportive of Finance Minister Jim Flaherty's idea for a new private-sector plan with pooled resources from small businesses and the self-employed.
However, Power Financial doesn't support any measures that would favour public sector pensions over private pensions, he said.
"I believe that systems that give the responsibility of saving to individuals personally or through their employees are systems that are the strongest," Mr. Orr said.
Provincial and territorial finance ministers have said they support the federal pension proposal, but further talks on an expansion to the Canada Pension Plan - that six provinces and several labour groups had been pushing - will have to wait until the finance ministers meet again in June.
In its financial results, Power Financial was affected by charges at a company subsidiary related to earthquakes in Japan and New Zealand in its first quarter.
Power Financial said it earned $370-million attributable to common shareholders, or 52 cents per share, for the quarter ended March 31.
That compared with a profit of $363-million, or 51 cents per share, a year ago, the company reported ahead of its annual meeting Thursday.
Revenue totalled $6.93-billion, down from $8.95-billion a year ago.
Power Financial holds a controlling stake in Great-West Lifeco Inc., the Winnipeg-based insurer which took a $75-million charge on costs it faced from the earthquakes. Power Financial's share of the provisions totalled $53-million, or 7 cents a share.
In addition to Great-West, Power Financial also holds a controlling stake in IGM Financial Inc. which owns Investors Group and Mackenzie Financial Corp., two of Canada's best-known mutual fund companies.
Great-West also controls London Life and Canada Life insurance companies.
The company also indirectly has a large stake in Pargesa Holding which owns significant positions in several industrial companies based in Europe including Lafarge, Imerys, Total, GDF Suez, Suez Environnement and Pernod Ricard.