By Lauren Bailey
Pension plans’ fiduciary duties are synonymous with generating positive returns for members; however, Rob Andrews, president and chief executive officer of Union Benefits, is exploring ways to fulfill another aspect of their duties — advancing members’ social outcomes.
Union Benefits is a third-party administrator that operates with delegated authority for the trusts with which it works. “We’re pretty unique in terms of our ownership model, in that we are functionally a cooperative.”
To Andrews that relationship demands a certain level of social responsibility. Indeed, the company strives to strike a balance that generates positive outcomes for members both financially and socially.
He views the multifamily real estate sector as a promising area where institutional investors can achieve that alignment. This sector continues to experience strong demand and addresses a critical need for the next generation: affordable housing, said Andrews. He pointed out that a significant portion of multifamily units — especially condominiums — were originally developed with the investment market in mind.
“One of the questions that I’ve been trying to pose to myself is how livable is the multifamily capability? People are building communities, but you need to have space to do that. You can’t live in something that’s 200 to 300 square feet and build up a long-term life.”
Investors have realized that it’s not enough to create multifamily capacity, he added, noting the next generations will need homes that are both affordable and livable. In Canada, there is roughly a shortage of between 500k and 2M units to fill the housing gap, and Andrews believes multifamily is the best way to reach this goal.
He also believes there are still opportunities to be found in the commercial retail market. Despite the rise in ecommerce, Andrews noted there are areas where retail properties are still thriving, particularly throughout suburban sprawl. He believes the new U.S. tariff regime will also see many people return to in-person shopping.
Innovation in the real asset class is driving a resurgence in the sector, he said, noting many mixed-use properties are being tested to see what proves successful. “A year or two ago, the [most prevalent] question coming up [was] whether office capacity could be converted to housing. Another interesting question, given the capacity in the condo market, is whether office [spaces] are going to be full of workers or residents at some point.”
Building resiliency, long-term value
One question that factors into his decision-making is how plans can generate resilient returns, while keeping value — jobs and roles — in Canada. He doesn’t subscribe to the school of thought that immediate gains is the ultimate overrider, prioritizing short-term gain at the detriment of long-term value.
Shifting market dynamics are creating both challenges and opportunities, he pointed out, noting the new high-interest-rate regime, changing trade blocks and persistent geopolitical conflicts have made it difficult for pension plan sponsors to achieve strong returns. As a result, managing downside market risk is a key priority for him. “It’s not enough to chase yield; we have to build resilience into the system.”
Plan members work, live, and retire in Canada, so ideally that’s where their pension capital should create value, he adds. “We are seeing statements from funds, making it clear they won’t invest in entities or funds or areas that are detrimental to Canadian interests, which is obviously a symptom of the times we’re in.”
Andrews began his career working for Exxon in the U.K., where he was born. “I realized fairly quickly that being an English guy in England working for a gas and oil company, you could build a good career there, but you’re never going to change the world.”
He eventually transitioned into the consulting world by taking a job with Deloitte in London for a few years, working with various insurers and British government entities. He later took a role at Royal Sun Alliance, where he spent a number of years before the organization moved him to Canada. After three years, he left to join People Corporation as chief operating officer of their benefits division, in the multi-employer health and pension space. In moving to Union Benefits, he saw the opportunity he was seeking to make a difference.
Whether focusing on infrastructure or real estate, equities or fixed income, Andrews said the goal, first and foremost, is always how to generate long-term value for the membership of our union. “That’s a really key thing for us. We have 36 union trusts we support from a pension and health-and-welfare perspective. Our aim is to generate assets for them to retire comfortably, while investing in markets that generate long-term sustainable employment and returns.”
