Strategy: Changing the Conversation

conversation

It’s time to change the conversation about how we measure success. Being adept at investing is important, but we are more than just investors. Delivering excellent service to plan members is vital, but we are more than just service providers. We are a pension management organization.

Our members rely on us for certainty, stability and sustainability and we meet those expectations by keeping the Plan fully funded. For a defined benefit pension plan, there can be no more important achievement.

OPTrust’s philosophy of being member driven supports everything we do. Our members are the foundation of our strategies and the reason our mission is to pay pensions today and preserve pensions for tomorrow.

Pensions need to take a long-term view. Too often, however, the industry is focused on the short term and on short-term measures, like annual investment returns, to gauge success. Returns are important, but as pension plans our investment approach must be inextricably linked to the goal of keeping the Plan fully funded. We must balance the need to generate returns with the need to manage risk effectively. And when we look back over a single year or a decade, the true measure of whether we have delivered on our promise is the funded status of the Plan.

Designing solutions for today’s challenges

Demographic maturity. Low interest rates. Volatile markets and the likelihood of low investment returns. The fundamental challenges the Plan faces are persistent and have affected our ability to bear risk. Operating in this environment and keeping the Plan fully funded requires new approaches and a willingness to innovate.

In 2016, we began implementing our member-driven investing (MDI) strategy, which was designed to increase the likelihood of plan certainty for members by balancing the objectives of sustainability and stability.

Responsible Investing: OPTrust commits to the integration of material environmental, social and governance (ESG) factors into our investment decision-making processes and ownership practices. This approach reflects our fiduciary duty to the Plan’s members and is aligned with the Principles for Responsible Investment (PRI), to which the Plan is a signatory. Our investment groups seek to identify, assess and manage ESG risks and opportunities in a manner that supports both our mission and mandate, and are held accountable for doing so.

Climate Change: OPTrust recognizes that bold steps will be required to help investors understand the risks that climate change presents. We worked to better understand the impacts of climate change to our investment portfolios and released a position paper and report detailing our findings. We will continue to work collaboratively to improve our understanding of these impacts and seek solutions as we head toward a carbon neutral future.

A focus on members

Rooted in our overarching philosophy of being member driven, our service delivery strategy uses a member-direct approach to deliver valued-added services to members. Under this member-direct model, we continue to tailor our service offerings to meet our members’ needs and focus on offering them a variety of ways to communicate with us directly.

A MULTI-CHANNEL APPROACH TO MEMBER SERVICE
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Online communications:

offers flexibility, convenience and education

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Telephone support:

links members directly with an OPTrust representative

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Face-to-face interactions:

offers one-on-one and group sessions that provide tailored pension information

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Traditional paper-based communications:

offers members support for those who do not have easy access to electronic tools or prefer print communications

Looking forward

While the conversation has changed, the dialogue must continue. Delivering sustainability and stability for our members requires us to embrace change as an organization. This requires both innovation and resilience, as we need to face the future well prepared to adapt and thrive in any environment.

To that end, in 2017, we will develop a new, multi-year strategic plan, which will guide us as we continue to change the conversation in our industry, while remaining true to our core purpose: paying pensions today and preserving pensions for tomorrow.

2016 Funded Status Report pages