The Ontario Teachers’ Pension Plan (Teachers’) posted a solid 13% rate of return for the year ended Dec. 31, 2012, beating its consolidated benchmark by 2%.
“Returns earned above our benchmark directly support the goal of pension security and demonstrate the value of our approach to active investing,” says Jim Leech, president and CEO of Teachers’.
Leech noted that the fund’s total value has nearly doubled since 2002, when net assets totalled $66.2 billion.
Funding position
Although the Ontario government and the Ontario Teachers’ Federation balanced plan assets and liabilities as of Jan. 1, 2012, by making all inflation protection on service credit earned after 2013 conditional on the plan’s funded status, a $5.1-billion preliminary funding shortfall as of Jan. 1, 2013, is projected.
This shortfall was anticipated, given that declining interest rates drive up the projected cost of future benefits. The plan was 97% funded as at Jan. 1, 2013.