Actuarial asset value adjustment

Consistent with the long-term perspective on the Plan’s finances, OPTrust spreads market value gains and losses over a five-year period.

Annually, 20% of the difference between the Plan’s actual investment returns and the target return is recognized and the remaining 80% is recognized evenly over the next four years. Upon adopting CICA Handbook Section 4600 for the year commencing January 1, 2011, the actuarial adjustment will no longer be applicable for financial statement purposes and all remaining deferred gains and losses will be retroactively recognized [See Transition to International Financial Reporting Standards (IFRS) for further discussion].

At the end of 2010, the Plan’s actuarial asset value adjustment reflects a net deferred loss of $489 million, compared with a net deferred loss of $1,523 million the previous year. The $1,034 million decrease was due to the recognition of $476 million in losses from 2006 to 2009, and the deferral of $558 million in gains from 2010.

As a result, the actuarial value of the Plan’s net assets increased to $13.8 billion in 2010, up by $294 million from 2009. This increase reflects the $1,328 increase in unadjusted net assets offset by the $1,034 million decrease in the actuarial asset value adjustment.