The Ontario Teachers’ Pension Plan reported C$6.4 billion of income generated by investments for total net assets of C$180.5 billion for the first half of 2017, which is equal to a total-fund gross return of 3.7%.
“Returns in the first half of 2017 were driven by strong performance from global public equities, infrastructure, private equity, and government bonds,” said CIO Bjarne Graven Larsen. “Overall returns were offset by the impact of currency and declining commodity and natural resource prices.”
The fund’s five- and 10-year gross returns, were 10.5% and 7.3%, respectively, as of the end of 2016, and since its inception in 1990, the plan’s annualized gross return as of the end of 2016 was 10.1%. Gross asset return in local currency was 4.5%, and the plan said the appreciation of the Canadian dollar had an impact of -0.8%, or C$1.4 billion, on its total-fund gross return.
Ontario Teachers’ is Canada’s largest single-profession pension plan, and pays defined benefit pensions and invest plan assets on behalf of 318,000 retired and working teachers.
In June, the Ontario Teachers’ Federation (OTF) and the Ontario government, which jointly sponsor the pension plan, said they will use surplus funds reported as of Jan. 1, 2017, to restore full inflation protection for retired members, and decrease contribution rates by 1.1% for active members. Both changes take effect Jan. 1, 2018.