Carleton University Retirement Plan Update
Carleton University Retirement Plan update for Carleton University Retirees Association includes agenda items on pension fund returns, new investment managers, financial positions, Ontario regulations, responsible investing, asset class allocation, solvency funding relief, expected changes, and implications of a university sector plan for Carleton.
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Presentation Transcript
Carleton University Retirement Plan Update Carleton University Retirees Association February 2, 2018 Betsy Springer Director, Pension Fund Management 1
Agenda Pension Fund Returns New Investment Managers Update on Financial Position Expected Changes to Ontario Regulation Responsible Investing 2
Pension Fund Investment Returns Market value of assets June 30, 2016 June 30, 2017 January 31, 2018 1,102.8 1,219.2 1,268.1 Investment returns, years ending June 30 2009 2010 2011 2012 2013 2014 2015 2016 2017 - 11.44 % 8.95 16.01 - 1.30 15.44 20.63 8.77 2.44 12.66 3
New Investment Managers Emerging Markets Equity William Blair Based in Chicago Initial Mandate of C$50 million Global Small Cap Equity Brandes Investment Partners Based in San Diego Initial Mandate of C$60 million 4
Asset Class Allocation, January 2018 Percent of Total Asset Class Canadian Equities 30 Canadian Fixed Income 20 Global Equities: Large cap Emerging Markets Small cap 30 5 5 US High Yield Debt 4 Global Infrastructure 6 100 5
Solvency funding relief Approved for stage 3 relief, October 2016 Special payments will be $12.6 million annually for three years. Without Stage 3, special payments would be $34.3 million annually. 6
Expected Changes to Ontario Regulations New framework for funding of pension plans Eliminates solvency funding for plans that are at least 85% funded However, a new provision for adverse deviations will be required and must be funded For Carleton, this could be about 10% of pension plan liabilities (i.e. accrued benefits) Expect large special payments to continue. 7
University Sector Plan Exploratory work on this continues First draft suggests that a sector plan would be expensive for Carleton (both members and university) Governance implications are a concern 8
Responsible Investing Carleton has had a policy in place for many years Posted on Pension Fund Management website Based on best practices (United Nations Principles for Responsible Investing) Policy does not include divestment Policy requires investment managers to incorporate analysis of environmental, social and governance ( ESG ) issues into the investment decision-making process. 9
Questions? 10
