Shareholder Spotlight : No Lessons Learned - Ontario Teachers' Pension Plan

The “Ontario Teachers’ Pension Plan” The brand smells of chalk dust and the kind of civic virtue that gets printed on shiny recruitment leaflets. What it hides is an institutional machine with billions to move, deals to make, reputations to polish and, occasionally, screwups to bury beneath spin and annual-report platitudes.

This is a fund that manages hundreds of billions for people who spent their lives shaping other people’s children. It is also a fund run by humans who make human mistakes – some venal, some venial, some that smell of poor judgement. The result is a long list of awkward headlines, lawsuits, and hypocrisy in a tidy corporate narrative that insists everything is “responsible” and “member-first.” Here’s the dirty laundry.

FTX – the $95m whoopsie that kept on giving

In 2021-22 Ontario Teachers ploughed into FTX – about US$95 million across two tranches. For the fund that keeps pensions flowing, that bet blew up spectacularly when SBF’s empire imploded. The board wrote the money down to zero and pretended the hit was a rounding error to the total fund – but members saw a different thing: a badly timed taste of crypto greed. That “limited impact” line didn’t stop some members from suing the fund – accusing it of running lousy due diligence and a fiduciary failure. It’s a rarity to see pension members sue their own trustee over risk control – and rarer still to have it play out against a global scandal like FTX. The smell here ain’t just loss – it’s arrogance.

Cadillac Fairview – mall cameras, secret analytics and the privacy stink

Cadillac Fairview (CF) – a major retail landlord owned by Ontario Teachers – quietly trialled “anonymous video analytics” in malls. Millions of shopper images were collected and run through systems that sniffed faces and foot traffic patterns. The federal privacy commissioner and provincial probes flagged the operation for collecting personal (and biometric) information without meaningful consent. Lawsuits followed; one proposed national class action won headlines but ultimately failed certification in British Columbia. Whether or not the class went forward, the optics were brutal – teachers’ pensions owning malls that surveil shoppers like data farms. Words like “anonymous” were deployed a lot – but the cameras still saw you.

Fossil fuels and pipelines – climate PR and inconvenient reality

OTPP likes to talk climate leadership. It also invests in gas pipelines, oil infrastructure and energy projects the activists loathe. Oh yes, and Cummins. You know, the huge emissions cheats that is the focus of our humble blog. Campaigners and member groups say the fund’s portfolio tells a different story from the glossy climate pages – that large stakes in fossil infrastructure contradict the stewardship rhetoric. The result is the familiar, maddening dance: public green signalling followed by private bets on projects that warm the planet and anger the voters who actually pay the pensions. That cognitive dissonance fuels legitimate questions about priorities – returns or reputational virtue signalling – and whether fiduciary duty is being read as “profits first, everything else after.”

Private prisons, detention operators and human-rights headaches

A few years back the fund held positions in companies that run US immigrant detention facilities and private prisons. The public backlash was immediate and loud – unions, campaigners and members demanded divestment. To the fund’s credit it later reduced exposure – but the episode left a stain. For a pension plan tied to a public sector profession, even brief ownership of companies associated with human-rights concerns is an embarrassing misread of political risk. Pensions are not just about alpha – they’re about social licence.

Private equity woes – not always the golden goose

Private equity was once the playground where massive public pensions scored outsize returns. Lately it’s been a grind. Ontario Teachers’ private equity strategies have underperformed some public benchmarks in recent periods, sparking questions about whether the in-house push into direct deals and huge buyouts still delivers for members. When the private market gets frothy, the disconnect between headline returns and the messy, leveraged reality becomes plain – and that invites scrutiny of governance and incentives. You want risk? Fine – just own it when it bites back.

Class actions, member fury and governance questions

From a member lawsuit over FTX to vocal activists at AGMs demanding clarity on climate and ethics, there’s a growing air of impatience. People who teach don’t have time for institutional evasions when the thing they rely on is mismanaged. Ask the fund too many blunt questions at the AGM and an awkward, bureaucratic politeness replaces a straight answer. That’s bad for democracies and pensions alike.

The pattern – big money, big mistakes, tidy PR

What ties these episodes together is a familiar institutional script – big bets, rapid scale, PR-friendly language, then a messy fallout that prompts nuanced statements and carefully worded “we did due diligence” replies. The result is money managed at scale, accountability diffused through committees and consultants, and the beneficiaries left to squint through corporate glossy pages to find the honest line.

Back to that Cummins stake – the small but telling ownership

Yes – Ontario Teachers owns shares in Cummins Inc. (CMI). The fund is listed among Cummins’ institutional holders – a sizeable position in recent 13F filings, worth tens to hundreds of millions depending on filings and dates. That fact matters – it places Ontario Teachers squarely in the same investor ecosystem as Cummins and a raft of other large industrials. So when you talk about “companies in the Cummins ecosystem that have alternative ideas on ethical behaviour,” Ontario Teachers is not a distant spectator – it’s an investor with a seat at the table. In plain terms – they own a chunk of CMI and therefore share ownership responsibility for how these companies behave.

Why this all matters

This isn’t a tale of constant malfeasance. It’s a tale of power meeting human fallibility. It’s about a public mission operating like a private investment firm – which can be brilliant for returns, and messy for social duty. Money this big should come with cleaner optics and better accountability – and when it stumbles, the people who actually carry the risk are the members waiting for their pensions.

OTPP has delivered returns and they point to the numbers proudly. But the public episodes above show that scale also brings blind spots – surveillance in malls, embarrassment in crypto, tough ethical choices on prisons and pipelines, and the occasional governance wobble when private markets disappoint. That is the story. Raw, inefficient, human and very much worth shouting about. So, Ontario teachers, maybe it’s time for an overdue lesson in ethical investments.

Sources

FTX investment and write-down – Ontario Teachers’ statement and news coverage

Member class action and ongoing litigation about FTX due diligence

Cadillac Fairview – privacy commissioner findings and class action attempt

Fossil fuel investments and climate criticisms

Private prisons / GEO / reputational issues and divestment pressure

Private equity performance and portfolio scrutiny

OTPP annual report and data (context / scale)

Cummins (CMI) holdings – 13F / institutional data showing OTPP among holders

Additional reporting & context pieces used for this piece

Shareholder Spotlight : No Lessons Learned – Ontario Teachers’ Pension Plan