Toronto (April 13, 2005) Ė Strong investment returns for the second
year in a row helped increase the OPSEU Pension Planís net assets to $10.5
billion at the end of 2004, according to OPTrustís annual report, released
During 2004, the OPSEU Pension Trust (OPTrust) achieved an overall return on
investments of 11.7%. This result exceeded both the Planís weighted
benchmark return of 11.5% for the year and its long-term target return of
As a result, the Planís net assets available for benefits increased by $1.1
billion, ending OPTrustís 10th year of operation above the $10-billion mark.
In 2003, OPTrust registered an annual return of 17.3%.
ďOur strong financial results last year capped a very successful first
decade for OPTrust, our members and pensioners, and the Planís sponsors,Ē
said Deborah Stark, Chair of OPTrustís Board of Trustees. ďWeíve achieved
significant growth and laid a solid foundation for the Planís current and
Since OPTrustís launch in 1995, its annual investment performance has
bettered the Planís 7.5% target return seven years out of 10. The target is
the average rate of return the Plan needs to achieve over the long term to
pay the projected cost of membersí and retireesí pension benefits.
OPTrust has out-performed its weighted benchmark in eight of the past 10
years. Over the decade, the Plan registered an average annual return of
9.9%, compared to the benchmarkís average of 8.9%.
In 2004, OPTrustís above-benchmark performance was driven by the Planís
foreign equity portfolio, which returned 13.1% versus 11.4% for the
benchmark index. Canadian equity and fixed income investments also generated
strong returns of 13.4% and 9.2% respectively, but were slightly below their
benchmarks. Real estate, which makes up a small proportion of the total
portfolio, returned 12.9%, more that doubling the 6.2% benchmark return.
Over the year, OPTrust continued implementing a number of changes to its
investment portfolio. These included increasing the Planís real-estate
holdings, revising the management structure of its Canadian equity
portfolio, and adjusting its fixed income strategy to better match its
In July 2004, the Planís most recent funding valuation identified an
unfunded liability of $255 million, reflecting investment losses from 2001
and 2002. However, stabilization funds set aside from previous gains have
allowed OPTrustís sponsors to keep member and employer contributions at the
Planís normal rate.
Assuming an average annual investment return of 7.5% over the three years up
to December 31, 2006, the membersí stabilization fund should be able to
offset the need for a contribution increase until at least 2009.
OPTrust administers the OPSEU Pension Plan, a defined benefit plan covering
almost 74,000 members and retirees. The Plan is jointly sponsored by the
Ontario Public Service Employees Union (OPSEU) and the Government of
OPTrustís full financial results are available in its
2004 Annual Report. The
annual report, including detailed financial statements, is available in
print and on OPTrustís web site.
OPSEU Pension Trust