Funded Status Report

    The world is experiencing wide-ranging change — in technology, communications and the environment. In the face of such change, OPTrust’s members can know that their pension plan is stable. Good governance oversees the process of decision making and the process by which decisions are implemented. This is how OPTrust has achieved and maintained its fully funded status. Contribution rates are stable and so are benefits.

    OPTrust’s innovative investment strategy is designed to maintain this stability because it is aligned with the interest of members. That means we are not pursuing exceedingly high returns, which would necessitate increased risk and result in instability. This is the approach that helps build for the future, paying pensions today, preserving pensions for tomorrow.


Fully funded defined benefit pension plan
Almost $20 billion in net assets
1% net investment return
Almost 95,000 members
Released our Climate Change Action Plan (CCAP)
OPTrust Select launched in 2018
Average member satisfaction score of 9.1/10
5.15% discount rate
Joined group of leading global investors as part of a G7 initiative

Message from the Chair and Vice-Chair

Sharon Pel and Tim Hannah


Caroline Lynch


There was no question I would join right away, it made sense for me to start working towards retirement security for the future. It makes my life a lot easier to know that my pension is in safe hands with OPTrust.

Caroline Lynch
OPTrust Member
Business Analyst
Ministry of Transportation

Message from the Interim President and CEO

Doug Michael



The Plan is fully funded and on solid footing. Keeping the Plan fully funded over the long term begins with a thoughtful, prudent approach to plan funding.


The Plan is considered sustainable if it can deliver an appropriate and competitive benefit within an acceptable range of cost in the short, medium and long term.

The Plan is fully funded and on solid footing, although it continues to face challenges. Interest rates are at historic lows, market volatility has become the new normal and the Plan is becoming increasingly mature.

The key drivers that impact Plan sustainability are:

  • Investment Environment
  • Plan Maturity
  • Longevity Risk
  • Discount Rate for Funding Valuation

Our thinking on funding is rooted in the belief that sustainability matters. As a pension plan, it is essential we ensure that members receive the benefit for which they have paid.

Keeping the Plan fully funded over the long term begins with a thoughtful, prudent approach to plan funding.

Our thinking on funding is rooted in the belief that sustainability matters. Members need to know they can count on their pension to be there when they retire. The need for sustainability before retirement also exists. We seek to enhance the likelihood that our members’ contribution rates and benefit levels will not fluctuate significantly throughout their working lives.

Our funding policy has four goals:

  • benefit security
  • contribution rate stability
  • intergenerational equity
  • fairness between the primary schedule and OPTrust Select.

Of these, the security of accrued benefits is the primary goal. As a pension plan, it is essential we ensure that members receive the benefit for which they have paid.

Risk management is not the same thing as risk avoidance. We work to ensure that investments earn returns that are commensurate with the amount of risk taken.

OPTrust places importance on the Plan’s funded status as this is the measure that matters because it means stability in benefits and contributions for members and retirees. To maintain a fully funded status, we balance assets and liabilities. We use a return-seeking portfolio focused on generating attractive risk-adjusted returns to keep the Plan sustainable over the long term, and a liability-hedging portfolio to offset short-term changes in the value of liabilities caused by changes in interest rates.

The majority of a member’s pension is paid from investment returns, and the generation of returns carries risk. Risk management is not the same thing as risk avoidance. We work to ensure that investments earn returns that are commensurate with the amount of risk taken. In this way, we use risk as a lever, increasing risk when markets provide an attractive forward-looking return, and decreasing risk when they do not.

OPTrust Select

In 2018, OPTrust launched OPTrust Select, the first new jointly sponsored, defined benefit (DB) product offering in a generation. It is designed for modest income earners. One of the top priorities for the organization for many years has been to expand DB pension coverage to more people. Research shows that people with a DB pension can lead a more fulfilling retirement because they know their income is secure. As a result, they make greater economic contributions to their communities.

OPTrust Select opens the door to creating a better retirement for more people. Its innovative design brings the advantages of OPTrust’s large scale and investment expertise to people who would otherwise not have access to a DB pension plan and a more secure retirement. It offers enhanced risk-sharing with active members and retirees. This innovative offering provides significantly reduced volatility in contribution rates and pension expense. And, OPTrust Select creates greater sustainability for all Plan members over the long term through the allocation of risk and costs over a broader membership base.

Steven Gulyas


My OPTrust pension has allowed me to meet my day-to-day living expenses, it is a big part of my retirement income. There is independence and security in knowing that I don’t need to worry.

Steven Gulyas
OPTrust Retiree
Ministry of Advanced Education, Skills & Training

Pension Funding

OPTrust engages independent actuaries to perform regular valuations of the Plan to ensure there are sufficient assets to meet the projected cost of members’ and retirees’ lifetime pensions. These valuations provide a snapshot of the Plan’s financial position and ability to meet its pension obligations, while providing a review of gains and losses experienced since the last valuation.

The Plan’s 2018 funding valuation showed it remained fully funded as of December 31, 2018. The funding valuation also confirmed net deferred (or smoothed) investment losses of $327 million, which will be recognized over the next four years. These deferred losses have been taken into consideration in our long-term planning.

The Plan’s real discount rate for the 2018 funding valuation was reduced to 3.15%, net of inflation, down from 3.30% in 2017.

OPTrust continued to add conservatism to our funding valuation by lowering the discount rate used to value the Plan’s liability in order to help protect the Plan from future market volatility.

At December 31 ($ millions)   2018 VALUATION   2017 VALUATION
Net assets available for benefits   $19,937 $20,290
Actuarial smoothing adjustment   327   (885)
Present value of future contributions   5,718   5,797
TOTAL ASSETS   25,982   25,202
Present value of future benefits   (25,469)   (24,718)
Provision for future expenses   (372)   (350)
TOTAL LIABILITES   (25,841)   (25,068)
TOTAL SURPLUS   $141 $134

Investment Strategy and Performance

assets and liabilities

OPTrust’s mission is paying pensions today, preserving pensions for tomorrow. Our members depend on us to provide secure, predictable income in retirement. Our investment strategy is designed with this mission in mind and fully aligned with the interests of our members.

We strive to earn enough return to keep the Plan sustainable over the long term, while keeping benefit levels and contribution rates stable. Our investment strategy carefully balances risk and return to deliver on these objectives. We avoid undue risk, and only take risk when the investment returns are commensurate with the risk taken.

MDI implementation progress and key accomplishments:

  • Enhanced portfolio diversification
  • Liquid asset internalization
  • Illiquid asset rebalancing

OPTrust’s investment objective is to improve pension certainty by earning enough return to keep the Plan sustainable, while maintaining stability in contribution rates and benefits levels. Our goal is not to earn outsized returns, which would require taking excessive risk. The total fund return for 2018 was 1% against a challenging investment backdrop.

The total fund outperformed the -0.2% return on our reference portfolio, which is comprised of 75% global developed market equities and 25% Canadian long-term bonds. This portfolio is selected to deliver the long-term expected return that we need to ensure the Plan is fully funded in a simple, easy-to-implement, passive indexed portfolio. Our MDI strategy seeks to deliver the same return as the reference portfolio over the long term, but at a much lower level of risk. In 2018, the total fund outperformed the reference portfolio on both a return and risk-adjusted return basis. Over the last three years, the total fund has outperformed the reference portfolio return, at a much lower level of risk. These results, combined with OPTrust’s fully funded status, show that the MDI strategy is delivering the intended results.

We believe environmental, social and governance (ESG) factors affect investment risk and return as well as our reputation. OPTrust’s Responsible Investing (RI) program ensures material ESG factors are considered where their impact could affect the Plan’s sustainability and stability in both the short and long term.

Jamie Haldenby


Having a defined benefit pension takes away a lot of financial stress and allows me to focus on other savings and goals for my future.

Jamie Haldenby
OPTrust Member
Data Management Officer
Ministry of the Environment, Conservation and Parks

Serving Members

Members and retirees rated their interactions with OPTrust at 9.1/10, on average.

OPTrust puts our members first in all we do. In 2018, that commitment shone through as members and retirees rated their interactions with OPTrust at 9.1/10, on average. We also achieved very high marks in a global benchmarking study of about 50 pension plan administrators, conducted by CEM, moving from tenth place in 2017 to sixth in 2018. But we know there is more to be done so we have set our sights on moving to the next level — exceeding expectations.

We can only exceed members’ expectations if we know what those expectations are. So, in 2018 we engaged members in even deeper conversations about what would improve their experiences with us. They confirmed our thinking: that timely, accurate services are now just a starting point and we need to continue aiming for ongoing improvements, to deliver a remarkable experience.

Get the big picture

For more information on OPTrust’s strategy and results, see our full 2018 funded status report.