Fully-funded OPTrust achieves 11.7% return in 2013
Assets grow to $16 billionPosted: April 9, 2014
TORONTO, April 9, 2014 - The OPSEU Pension Trust (OPTrust) is pleased to report that it continues to be fully funded on a going concern basis in 2013, with a funded ratio of 101%.
This sound funding position was supported by a strong overall investment return of 11.7%, net of external management fees, outperforming the Plan’s composite benchmark. The Plan’s 2013 funding target was 6.25%, and since inception, the Plan’s investment portfolio has realized an average annual net return of 8.3%, exceeding its 7.2% average funding target return for the same period.
Net investment income for 2013 was $1.62 billion, and after collecting contributions of $539 million and paying $884 million in benefits, the Plan’s net assets increased to $16.0 billion at year-end ($14.7 billion as at December 31, 2012).
“We will continue to maintain our unwavering focus on the sustainable retirement security of our members,” said Bill Hatanaka, President and CEO of OPTrust. “The solid results our team delivered in 2013 have helped create a strong foundation for the long-term health of the Plan. However, we continue to caution that we expect ongoing headwinds due to the Plan’s maturity and continued volatility in global capital markets.”
In 2013, OPTrust benefited from a good year in equity markets and our long-term diversification strategy. Robust double-digit net returns in our public equity, real estate, infrastructure, private equity and commodity portfolios, helped offset negative net returns from our fixed income portfolios.
The Plan’s 2013 funding valuation shows the Plan remained fully-funded as of December 31, 2013 with a small surplus of $107 million after accounting for the Plan’s $520 million rate stabilization reserves. In 2013, OPTrust lowered its discount rate and strengthened its mortality assumptions, creating a solid foundation for the long-term funding health of the Plan.
The valuation also identified $811 million in deferred investment gains, compared to $528 million at the end of 2012. These gains will be recognized between 2014 and 2017, further improving the Plan’s funded status.
More detailed information about OPTrust’s 2013 investment results, funding position and other activities is available in our 2013 annual report.
With assets of $16.0 billion, the OPSEU Pension Trust (OPTrust) invests and manages one of Canada’s largest pension funds and administers the OPSEU Pension Plan, a defined benefit plan with over 84,000 members and retirees. OPTrust was established to give plan members and the Government of Ontario an equal voice in the administration of the Plan and the investment of its assets, through joint trusteeship. OPTrust is governed by a 10-member Board of Trustees, five of whom are appointed by OPSEU and five by the Government of Ontario.
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