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Meritas Socially Responsible Investments' Submission in Response to Finance Canada's Regulatory Framework for Federally Regulated Defined Benefit Pension Plans consultation:

September 15, 2005

Attention: Diane Lafleur
Financial Sector Policy Branch , Department of Finance
L'Esplanade Laurier , 20th floor East Tower
140 O'Connor St.
Ottawa ON K1A 0G5

Dear Ms. Lafleur:

Re: Consultation on defined benefit pension plans and the Pension Benefits Standards Act

I am writing in response to your request for comments on regulatory and legislative issues regarding defined benefit pension plans under the federal Pension Benefits Standards Act (PBSA).

Meritas Financial Inc. is devoted solely to creating and marketing socially responsible investments under the brand name Meritas Mutual Funds. Meritas Financial Inc. also has assets under management for Group RRSP/Pension plans. Committed to all three aspects of Socially Responsible Investing, Meritas uses positive and negative screening guidelines, shareholder activism and community development investments to help people align their investments with their social, ethical and environmental concerns.

I believe that your consultation paper fails to look at the transparency issue of the assets managed on behalf of it's unitholders. It is every investors right to have access to key issues of how their investments and ultimate wealth are managed on their behalf. Money managed under a pension plan with many members is no different. It should not exclude the beneficiaries from these rights. The PBSA fails to discuss the importance of requiring pension funds to disclose their social and environmental policies and practices; and it fails to raise the issue of disclosure of proxy voting policies and voting records by pension funds.

Increasingly, there is a consensus in the investment community that social and environmental factors are critically important in avoiding risk and adding long-term portfolio value. I believe that fiduciaries must incorporate social, ethical, and environmental analysis into their portfolio assessments to reduce risk on the investments, and promote are more sustainable future for the world we all live in. Pension plans around the world have been much more visionary with these types of issues, yet the PBSA has failed to even look at these issues with this consultation.

Therefore I would like to support the Social Investment Organization in its brief to you of Aug. 25, in which it has called for regulatory change to require pension funds under the PBSA to disclose their social and environmental policies and to make public their voting policies and voting records.

Social, ethical, and environmental disclosure would ensure that pension funds consider the importance of critical long-term, non-financial factors as part of their risk management and value-added strategies. Proxy voting disclosure would require PBSA pension funds to review their policies on their voting obligations, and to vote their shares in accordance with those policies.

Such disclosure would help to improve the overall level of accountability and transparency among Canadian pension funds.


Gary Hawton
Chief Executive Officer