OPTrust announces 13.9% investment return for 2010Posted: July 18, 2011
TORONTO, July 18, 2011 - The OPSEU Pension Trust (OPTrust) today reported investment results of 13.9% for 2010, outperforming its 10.9% benchmark and significantly exceeding its funding target of 6.75%. Total investment earnings were $1.53 billion, up from $1.35 billion in 2009, and net assets available for benefits rose to $13.3 billion at year-end.
“We are very pleased that our investment strategy has delivered excellent results for the Plan for the second year running,” said Stephen Griggs, President and CEO of OPTrust. “We are continuing to shift the Plan’s long-term asset mix to further enhance our ability to meet or exceed our funding target return over the long-term, while reducing the overall level of investment risk.”
OPTrust’s strong performance in 2010 built upon the continued broad-based recovery in global investment markets. Each of OPTrust’s major portfolios achieved double-digit returns, with public equity, real estate and infrastructure portfolios accounting for more than 90% of outperformance relative to our benchmark portfolio.
The Canadian and global equity portfolios delivered returns of 19.3% and 11.5% respectively. Real estate generated a 14.4% return for the year and the infrastructure portfolio posted a 22.7% return. Fixed income (including real return bonds) returned 11.9%. Strong results from the Plan’s private equity portfolio with a 28.4% return also contributed to overall performance.
Since OPTrust’s inception in 1995, the Plan’s combined investment portfolio has realized an average gross annual return of 8.7%, exceeding our 7.3% average funding target for the same period.
In 2010, OPTrust extended its proactive strategy to ensure stable long-term funding for members’ and retirees’ pensions. In January 2010, OPTrust implemented the first of three annual 1% increases in members’ and employers’ contribution rates. Combined with payments from the Plan’s rate stabilization reserves these actions are helping eliminate the deficit caused by investment losses in 2008, while maintaining the value of members’ future pensions.
OPTrust’s Board also strengthened the economic and demographic assumptions used to project the cost of members’ future pensions. This prudent decision increased the current funding deficit to $586 million but substantially improves the ability to meet the Plan's pension obligations over the long term.
“We continue to work diligently to proactively manage the funding deficit and ensure the security of our members’ pensions,” said Maurice Gabay, Chair of the OPTrust Board of Trustees. “Keeping the pension promise is the number one priority of the Board.”
OPTrust also made significant progress on its commitment to socially responsible investing during the year. In 2010, OPTrust became a signatory to the United Nations’ Principles for Responsible Investment. As a signatory OPTrust commits to a best practices framework for responsible investing and is able to access a global network of organizations to share information and collaborate on engagement activities. OPTrust also joined the Carbon Disclosure Project (CDP),an international initiative that conducts an annual survey of thousands of the world’s largest companies regarding their greenhouse gas emissions and climate change strategies. The companies’ responses and CDP reports assist OPTrust in evaluating investment risks and opportunities related to climate change.
More information about OPTrust's 2010 investment results and funding status and outlook is available in our 2010 annual report.
With assets of $13.3 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 approximately 83,000 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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