The Ontario Municipal Employees Retirement System (OMERS), the defined benefit pension plan for Ontario’s municipal employees, reported a 2019 investment return of 11.9% net of expenses to raise its total asset value to C$109 billion ($82.1 billion) from C$97 billion at the end of 2018.
The fiscal 2019 performance surpassed last year’s net return of 2.3%, which the pension fund said was impacted by more challenging stock market conditions. OMERS’ funded status on a smoothed basis improved for the seventh consecutive year, increasing to 97% from 96% the previous year.
“Our high-quality, well-diversified portfolio produced strong results for our members in 2019,” Michael Latimer, CEO of OMERS, said in a statement. “All asset classes generated positive returns, led by public equities. Over the past five years, we have earned $9.8 billion of net investment income over the amount required to fund our pension obligations.”
The fund reported three-, five-, and 10-year annualized returns of 8.5%, 8.5%, and 8.2%, respectively, compared with 8.0%, 8.1%, and 8.0%, respectively, at the end of fiscal 2018.
Public equity was the top-performing asset class, returning 20.3%, compared with a loss of 8.3% in 2018. Infrastructure returned 8.7%, down from 10.6% the previous year, while real estate returned 8.3%, down from 8.7% in 2018. Fixed-income investments returned 6.7%, compared with 1.8% the previous year, while credit investments earned 8.0%, up from 3.1% in 2018. Inflation-linked bonds returned 7.1%, compared with a loss of 0.4% in 2018, while private equity earned 4.6%, down from 13.5% the previous year.
As of Dec. 31, the asset allocation of the fund’s investment portfolio was 29% in public equity, 19% in infrastructure, 17% in credit, 16% in real estate, 14% in private equity, 3% in government bonds, and 2% in inflation-linked bonds.
OMERS is a jointly sponsored pension plan, with 1,000 participating employers, and more than 500,000 active, deferred, and retired members.