Canada’s pension system is considered one of the best in the world. One major reason is that many pension plans in Canada, including the Ontario Teachers’ Pension Plan (OTPP), manage investments internally. Instead of hiring outside firms, they use their own expert teams and advanced technology. This helps them save money, stay efficient, and protect the retirement funds of teachers and retired members.
As of the end of 2024, OTPP managed about $266 billion in assets for over 343,000 working and retired teachers. It is the third-largest pension fund in Canada and recently won the Best Pension Trading Team award at the 2025 Global Markets Choice Awards by Markets Media Group.
How Trading Has Changed Over the Years
Kevin Duggan, who has worked at OTPP for 27 years and is now the Senior Managing Director of Beta and Global Trading, says that trading has become a more important part of managing investments over the past 10 years. Before, portfolio managers (PMs) used to trade themselves, but now there’s more focus on having specialized trading teams.
Pension Plan: This means that PMs can now focus on picking good investments, while traders handle the buying and selling. This change is seen as a smarter and more efficient way to run large investment funds.
Centralized Trading at OTPP
Before 2017, OTPP’s trading system was decentralized, which meant that different teams or PMs handled their own trades. Only equity trading was centralized, mainly for compliance reasons. Other parts like futures, foreign exchange (FX), and fixed income were all handled separately.
In 2017, OTPP decided to bring everything under one roof, creating a Global Trading team. This new setup became part of a larger group called Total Fund Management. The change wasn’t just about moving people—it involved new technology, new systems, and building trust with PMs who were used to trading themselves.
They spent years choosing the best Order Management Systems (OMS) and Execution Management Systems (EMS) for each asset type (equity, fixed income, FX, etc.). They also set up rules of engagement that define how PMs and traders work together.
Why Centralized Trading Works
Having a centralized trading team means more focus, fewer mistakes, and lower trading costs. Traders can concentrate on market timing, finding liquidity, and using the best tools. It also helps build a stronger technology foundation, since all trading activities are coordinated.
However, there are some challenges. It can be hard to make sure PMs still feel involved in the process. OTPP handles this by hiring skilled traders who truly understand the PMs’ strategies and goals. Each trading team has a strong leader, and everyone works closely to act like one unit.
OTPP’s Team Structure and Benefits
OTPP’s trading desk is divided into three areas: Credit, Rates, and Liquids. Each has a lead who is both a coach and trader. The team is made up of people with backgrounds in business, science, technology, and engineering. The male-female ratio is about 55-45, which is rare in finance.
Younger team members are trained to work across all asset types. As they grow, they start to specialize. This keeps the team flexible and smart.
The Role of Research and Analytics
OTPP has a separate analytics team that works alongside traders. Their job is to help traders make better decisions using data. For example, they study trade costs and find ways to reduce them. This teamwork allows OTPP to succeed even in harder-to-measure areas like fixed income trading, where other firms struggle with analysis.
Strong Communication with Outside Partners
Another smart move by OTPP is their focus on external partner feedback. Twice a year, they give detailed reports to their biggest trading partners, showing how much business they did and how well each partner performed. This feedback helps both sides improve.
The Ontario Teachers’ Pension Plan is setting an example with its centralized trading model. By using strong teamwork, the right technology, and clear communication, they are making smart trades and protecting the futures of thousands of Canadians. Their journey shows how important it is to adapt and build systems that can grow with time.