The Ontario Teachers’ Pension Plan is reporting a total-fund net return of 8.6 per cent for 2020, a year which has generated mixed financial results for Canada’s major pensions due to the impact of the coronavirus pandemic.
The pension plan earned $18 billion in investment income in 2020 and its net assets reached $221.2 billion as at Dec. 31, 2020, a $13.8-billion increase from a year earlier, according to a press release. As of Jan. 1, 2021, the plan was fully funded for an eighth consecutive year with a funding ratio of 103 per cent and a preliminary surplus of $8.5 billion using prudent assumptions, with 100 per cent-inflation protection being provided on all pensions.
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“The pandemic highlighted the importance of robust portfolio diversification across different assets, geographies and sectors,” said Ziad Hindo, chief investment officer for the Ontario Teachers’, in the release. “Our strong results were a result of significant exposure to fixed income and outstanding performance by our public and private equity asset classes.”
In the release, Jo Taylor, president and chief executive officer of the Ontario Teachers’, said the pension’s portfolio proved to be very resilient during a turbulent year. “Through the headwinds of a global pandemic and volatile investment landscape, we delivered strong financial results and high service levels for our members. Our ability to navigate the many challenges posed in 2020 was anchored around the skill, agility and application of our team, which augurs well for the future despite the ongoing market uncertainties.”
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By comparison, the Caisse de dépôt et placement du Québec reported a 7.7 per cent return on its depositors’ funds in 2020, 1.5 per cent lower than its benchmark, while the Ontario Municipal Employees Retirement System said the pandemic and subsequent lockdowns resulted in a net return of -2.7 per cent for the year. The Colleges of Applied Arts and Technology’s pension plan is currently 119-per cent funded on a going-concern basis with a funding reserve of $3.3 billion, based on its latest actuarial valuation as at Jan. 1, 2021.