Toronto (April 15, 2004) ĖThe OPSEU Pension Trust (OPTrust) today
announced its financial results for 2003. Over the year, OPTrust achieved an
overall investment return of 17.3%, generating investment income of $1.4
As a result, the OPSEU Pension Planís net assets increased to $9.6
billion at December 31, 2003, from $8.5 billion the previous year.
ďWith approximately 60% of the portfolio allocated to Canadian and Global
equities, the Plan was well positioned to benefit from the strong recovery
of the worldís major stock markets,Ē said David Rapaport, Chair of OPTrustís
Board of Trustees. ďAt the same time, our returns bettered the Planís market
benchmarks for each of our major asset classes.Ē
OPTrustís overall return outperformed the Planís 13.6% weighted market
benchmark by 3.7%. The difference, equal to approximately $310 million over
the year, represents the added value realized through OPTrustís investment
The Planís investment performance also exceeded OPTrustís 7.5% funding
target return. This target represents the long-term rate of return needed to
fund the projected cost of membersí and retireesí pension benefits.
Since OPTrustís launch in 1995, the Plan has achieved an average annual
rate of return of 9.7%, exceeding both the funding target return and the
8.6% benchmark for the same period.
At the end of 2003, the Plan had a financial statement surplus of $1.5
billion, compared to $1.9 billion in 2002. The decline in surplus was
largely due to the recognition of a portion of the Planís deferred
investment losses from the previous two years.
Despite its strong results for 2003, OPTrust is managing the effects of
negative investment returns from 2001 and 2002. While the long-term outlook
remains strong, OPTrust anticipates that the Planís next actuarial funding
valuation will identify a funding loss. The results of this valuation, as of
December 31, 2003, will be available in August 2004.
Normally a funding loss would trigger an immediate increase in the
contributions paid by OPTrust members and employers. However, in their role
as plan sponsors, OPSEU and the Government of Ontario have set aside a
portion of past funding gains in separate contribution stabilization
reserves, which can be used to offset required contribution increases.
At the end of 2003, the membersí contribution stabilization fund stood at
$172 million, while the employersí fund totaled $338 million. Based on
current projections, these funds are expected to be sufficient to prevent
contributions from rising above the planís normal rate of 8% of salary until
the next scheduled funding valuation in 2007.
OPTrustís financial results are presented in its
2003 Annual Report. The
Annual Report, including full financial statements, is available in print
and on OPTrustís Web site.
OPSEU Pension Trust