2020 Highlights

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OPTrust remains fully funded for the 12th consecutive year

Funding highlights
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nominal discount rate

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one-year net investment return

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average member satisfaction score

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10-year average net investment return (2011-2020)

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Over 98,000 members including OPTrust Select

OPTrust Select reached almost 1,400 new members

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Earned A+
for our strategy and governance approach to responsible investing from the United Nations Principles for Responsible Investment

Message from the Chair & Vice Chair

This year has certainly been a time for “taking care.”

From the Board’s perspective, our overarching fiduciary duty is to act in the best interests of the Plan’s beneficiaries. In that sense, we oversee the Plan’s management and the way they discharge the responsibility to ensure we are taking care of members.

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Our Members

It was a year of taking care of not only the Plan, but also each other; our communities, our team and our obligations to our members as we continued to deliver on our mission of paying pensions today, preserving pensions for tomorrow.

Message from the President & CEO

Every day, the team at OPTrust takes care of members and their financial future in retirement. We do this by using a prudent investment strategy designed for the long term. It is structured to weather market turbulence, and provide the returns we seek to deliver on our pension promise.

And while it’s what we do each day, in many respects, taking care was the theme for 2020.

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Pension Funding


The Plan continues to be fully funded, yet we are facing formidable and ongoing challenges.

Several key drivers impact Plan sustainability: the investment environment, low interest rates that affect the funding valuation, plan maturity and longevity risk. Ultralow interest rates, coupled with market volatility and low-return expectations for extended periods, make it extremely challenging to keep the Plan fully funded into the future. This situation is exacerbated as the number of pensioners in our Plan increases and the proportion of members making contributions to the Plan decreases.

We use several methods to help maintain the funded status: our Member-Driven Investing (MDI) strategy, the risk limits specified in our Risk Appetite Statement and other funding tools. As challenges endure for longer periods of time, the tools at our disposal are applied differently. This includes the way we use risk within the MDI strategy.


The pension commitment spans many decades. In keeping with that long-term time horizon, short-term market events, whether positive or negative, should not lead to contribution and/or benefit changes. Contributions and/or benefits should only be changed when economic conditions or member demographics and/or behaviours change the long-term expected cost of the benefit.


OPTrust engages independent actuaries to perform regular valuations of the Plan to ensure there are enough assets to meet the projected cost of members’ 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.

OPTrust’s 2020 valuation shows the Plan remained fully funded as of December 31, 2020. The funding valuation also showed deferred (or smoothed) investment gains of $980 million, which will be recognized over the next four years, further supporting the Plan’s funded status in the years to come.

The Plan’s real discount rate for the 2020 funding valuation was reduced to 3.00%, net of inflation, down from 3.10% in 2019. The effect of this change increased the total fund liabilities by $412 million.

Changes in the Plan’s actuarial assumptions can have a major impact on the projected cost of members’ pensions and the Plan’s funded status. The table above shows the impact of a 0.5% change in certain key assumptions on the Plan’s funded status.


Member Experience highlights for the year


We are proud to be administering pensions for a membership dedicated to serving Ontario during these unprecedented, difficult times. Our members continued to be patient and understanding as we transitioned from office to home. We salute and offer thanks to our members working on the front lines who continue to support us and keep us safe.

Throughout the COVID-19 pandemic, OPTrust continued to pay existing retirees and began payments to newly retired members with no interruptions — all while the team continued to serve members through the transition from working at our offices to working remotely. The Member Experience team listened and provided counselling during the most uncertain of times, assuring members that their pension would start on time if they chose to retire this year.


OPTrust Select celebrated its first anniversary and we began paying a pension to the first OPTrust Select retiree. With almost 1,400 members and 43 employers, we implemented a pension administration system to calculate pension transactions for our members. We also introduced a new pension calculator to illustrate the benefits for potential members.


Our members continued to be satisfied with their service experience, rating us at an average of 8.7/10 in 2020. Our services were rated among the top 10 globally and top three among our Canadian peer group, according to CEM Benchmarking Inc. Our Pension Information Sessions transitioned from in-person sessions to online webinars, so that our members could continue to plan and prepare themselves for retirement. The introduction of technology enhancements enabled our team to uniformly prioritize electronic messages and phone call response times.


We benchmark our work against other defined benefit pension plans to better understand how our overall services compare to other organizations doing similar work. While plan administrators conduct business differently, we have found many opportunities to share our approaches and learn from others, while collaborating to improve the retirement system across Canada and globally, for the benefit of members.

OPTrust’s total service score was 87 out of 100 in the most recent survey of leading pension plans by CEM Benchmarking Inc. Our score placed us in the top 10 globally and top three among our peer group of Canadian plans.



Our Member-Driven Investing (MDI) strategy is designed to take care of members by improving pension certainty. We do this by seeking to earn the return we need to keep the Plan fully funded at the lowest risk possible.

MDI emphasizes the construction of a total fund portfolio with diversified return streams and resilience to different economic and market environments. This has helped our Plan weather the intense market volatility during the COVID-19 pandemic.

We have conducted a complete review of reference indices and performance measures to align with our objective of improving pension certainty for our members.

Assets and Liabilities illustration
Total fund investment performance graph
  • Volatility in fund returns has been relatively low in a very challenging economic and market environment, reflecting the diversification within our portfolio and outperformance of risk-mitigating strategies.
  • Maintained business continuity during the COVID-19 pandemic; deal teams and internal trading operations have been active and functioning at a high level without interruption.
  • Advanced the integration of our external and internal public market investing team under a “One Capital Markets Group” structure; this will improve operational efficiency and decision making.
  • Initiated projects to develop best practice environmental, social and governance integration in partner selection and governance in the private market space.
Asset mix by portfolio table
Asset mix by class table

To fulfill our MDI objectives, we divide our total fund assets into four categories: Liability Hedging Portfolio (LHP), Return Seeking Portfolio (RSP), Risk Mitigation Portfolio (RMP) and Funding Portfolio (FP). Each of these portfolios has a specific purpose in helping us deliver on our MDI objectives.

  • Liability Hedging Portfolio: The LHP is designed to help manage funded status volatility by mitigating risk associated with changes to the discount rate of the Plan’s pension liabilities.
  • Return Seeking Portfolio: We keep our Plan fully funded by investing to earn sufficient returns that maintain Plan sustainability at the lowest risk possible, while keeping benefit levels and contribution rates stable. In a low interest rate environment, we must take risk to earn the required returns.
  • Public Equity: Our public equity exposure is designed to complement our private equity strategy and generate returns using liquid market instruments. We obtain public equity exposure through internally managed cash and derivative positions, as well as using external managers.
  • Private Equity: Private equity is expected to generate higher returns than public equity over the long term while providing a smoother volatility profile.
  • Credit: Credit investments provide attractive risk-adjusted returns and can deliver stable cash flows for the total fund, helping us to better fulfill our pension obligations. Our credit exposure is implemented through both internal and external strategies.
  • Multi-Strategy Investments: We invest in customized, liquid alternative strategies to access value-add opportunities within a broad and diversifying set of risk premia.
  • Real Estate: The real estate portfolio is an important diversifier for the total fund, lowering funded status volatility, and providing predictable income to fulfill our pension obligations. Real estate can provide attractive risk-adjusted returns and is also a hedge against inflation over the long term.
  • Infrastructure: Infrastructure investments add diversification to the total fund and act as a partial inflation hedge. They also provide cash flow and the potential for return enhancement through long-term capital growth.
  • Risk Mitigation Portfolio: These assets help to enhance portfolio diversification and can mitigate drawdowns in certain marketstress scenarios. We hold U.S. Treasuries, safe-haven currencies, gold and trend-following strategies in this portfolio, as they typically perform well in marketstress environments.
  • Funding Portfolio: This portfolio represents the net funding for the total fund, which allows us to achieve the optimal overall returnrisk profile for the total fund. The Funding Portfolio includes exposures such as bond repurchase agreements, implied funding from our derivative positions and liquidity reserves.

The COVID-19 pandemic has caused significant uncertainty on the investment outlook.

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The evolution of the COVID-19 pandemic and related changes in consumer behavior have increased uncertainty around the growth outlook and relative asset class performance over the long term.

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Low interest rates and elevated asset valuations make it more challenging to generate returns on a go-forward basis.

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Unprecedented monetary and fiscal expansion has extended the ranges of outcomes for interest rates, inflation and asset prices.

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Geopolitical risks remain structurally elevated in both developed and emerging economies.


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Voted at 2,028 company meetings in 52 countries.

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Completed carbon risk assessments, including carbon footprinting of our public equity, fixed income, private equity and infrastructure portfolios.

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Collaborated with leading global investors, as a member of the Investor Leadership Network (ILN), on practical tools for climate change mitigation in portfolios and initiatives to promote gender diversity in capital markets.

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Updated OPTrust’s Statement of Responsible Investing Principles and Proxy Voting Guidelines to reflect evolving best practices.


OPTrust’s responsible investing (RI) strategy supports the organization’s mission to deliver pension security for all members. Environmental, social and governance (ESG) factors can materially impact investment risk, return and reputation. We seek to identify, assess and manage these concerns and opportunities over our long-term investment horizon to protect and enhance investment performance and ultimately fulfill our commitment to members.


Engaged 543 companies on key ESG issues.

Earned A+ for our strategy and governance approach to responsible investing from the United Nations Principles for Responsible Investment.

Contributed to the Ontario Capital Markets Modernization Task Force, advocating for advancements on sustainability issues in capital markets regulation.

Joined the CDP Science-Based Targets (SBTs) Corporate Engagement Campaign, to accelerate the adoption of science-based climate targets in the corporate sector.

Established a cross-portfolio working group to strengthen the integration of sustainability into externally managed investments and developed a framework, which will be implemented in 2021, to systematically evaluate and monitor our external partners’ RI performance.

Launched a renewal of OPTrust’s climate change strategy and enhanced implementation of the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD), including disclosure of our public equity portfolio’s carbon footprint for the first time.


OPTrust’s Sustainable Investing and Innovation (SII) team was formed in late 2019 to reflect our broadening approach to responsible investing. In addition to continuing to provide support for ESG integration and active ownership activities across the total fund, the SII team has a unique mandate to invest at the intersection of sustainability and innovation. The team explored several themes impacting the long-term sustainability of the Plan, and climate change was selected as an appropriate initial theme to explore due to its profound impacts on natural capital and decision making in societies and economies globally. SII will continue to develop and implement this strategy through 2021.

  • Strong corporate governance: We support and encourage good corporate governance practices to enhance returns and promote alignment between corporate, investor and broader stakeholder interests.
  • Environmental stewardship: We expect investee companies to ensure compliance with environmental regulations, and in regions where there are no regulations or regulations are not enforced, to strive for generally accepted best practices.
  • Responsible treatment of people and communities: We support and encourage equitable practices relating to employees, communities and other stakeholders, including fair wages, benefits and working conditions for workers employed by companies we invest in.
  • Transparency and disclosure: We encourage transparency and disclosure of relevant and material ESG information to enable investors to fully assess and manage ESG risks and opportunities.
  • Active ownership: We practice active ownership by monitoring ESG issues and engaging with investee companies, partners and policymakers to advocate for improved management of material ESG factors.


Despite the short-term market volatility caused by the COVID-19 pandemic, OPTrust maintained more than enough liquidity to meet its needs to take care of members.

In 2019, the key functions responsible for overseeing risk management at OPTrust were combined into one Risk, Actuarial Services and Plan Policy team (Risk and ASPP). Risk and ASPP provide advice on strategies for managing enterprise risk, including operational risk and crisis management, liquidity and investment risk, regulatory risk and funding risk.


We continue to employ a comprehensive risk framework through a robust risk governance and management program focused on improving decision making, achieving strategic and operational objectives and meeting legal and regulatory requirements. Further, we are guided by our Management Risk Policy to ensure we identify material or mission-critical risks on an ongoing basis and ensure they are appropriately managed within our risk appetite. Mission-critical risks are monitored and reported to the Board of Trustees on a quarterly basis.


Despite the short-term market volatility caused by the pandemic, OPTrust maintained more than enough liquidity to meet its needs to take care of members. We take a conservative approach to manage funding risk, market risks, counterparty risk and concentration risk.


We aim to continue creating a sense of belonging where differences are valued, heard and respected. We know actions matter more than words. As we look to the future, we are committed to taking bold steps in driving greater equality and meaningful change.


At OPTrust, we care about reflecting the diversity of the membership we serve and the markets in which we invest. We are stronger together when every employee feels comfortable bringing their whole selves to work each day and feels valued for their unique perspectives.

The power of diversity and inclusion leads to better decision making and outcomes for our members, our team and the Plan’s sustainability. It is simply the right thing to do.

Our strategy addresses two components of diversity: representation and inclusion. To advance our long-term aspirations, in 2020 we identified three goals within this framework for the outcomes we seek.


A global reckoning on anti-Black racism inspired OPTrust to lend its voice to the discourse with a member of our Executive Team writing an editorial published in one of Canada’s largest daily newspapers and participating in an important conversation about understanding non-violent racism.

Dismantling systemic racism, discrimination and barriers to senior leadership roles features prominently in our framework to create a racism-free workplace. Representation matters and institutional investors should reflect the diversity of the markets in which we invest and the communities where we operate. OPTrust is committed to putting in the work and partnering with like-minded organizations to realize greater equity and sustainable action on anti-Black racism.

  • A gender-balanced workplace
    Women and men have similar levels of representation across functions and levels of the organization. Transgender, non-binary and other forms of gender expression are welcomed and respected.
  • A racism-free workplace
    Black and other people of colour are well-represented at all levels of the organization and feel that race is not a barrier to achieving their career aspirations at OPTrust.
  • An accessible, inclusive workplace
    Physical barriers to accessibility and inclusivity are identified and removed. Mental health concerns are effectively supported and employees are not stigmatized.
Diversity & Inclusion Highlights


For more information on OPTrust’s strategy and results, see our full 2020 funded status report.

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