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Member-Driven Investing (MDI) Strategy

Enhancing our Investment Capabilities

Our Member-Driven Investing (MDI) strategy has a primary goal to maintain the funded status of the Plan. Above all, members want pension certainty, stability and sustainability.

To achieve our primary goal of pension certainty, we need to strike the appropriate balance between two objectives:

To achieve our primary goal of pension certainty, we need to strike the appropriate balance between two objectives:

  • Sustainability – Generating sufficient returns to keep the Plan full funded
  • Stability – Keeping contributions and benefits as stable as possible over time

There are two primary challenges facing these objectives:

  • Demographics – Aging membership limits our ability to take on investment risk
  • Low expected returns – Low interest rates and high valuations make earning investment returns challenging

In this challenging investment environment, we are committed to protecting our funded status and avoiding undue risk. As such, we continue to execute on our MDI strategy.

Assets and Liabilities

Over the long run, we seek to achieve our MDI objectives through dynamic portfolio construction of our total fund portfolio in two broad segments:

  1. Liquid strategies: enable us to react dynamically, complementing our illiquid assets, and serve as a vehicle that “completes” the overall risk profile of the total fund portfolio, known as the “completion portfolio”.
  2. Illiquid strategies: anchor our efforts to add attractive long-term returns at an appropriate level of risk to deliver value add.