TORONTO, March 29 The Ontario Teachers' Pension
Plan's rate of return dropped to 4.2 percent last year from 13
percent in 2015, the fund said on Wednesday, citing unfavorable
The results still exceeded a benchmark target of 3.5 percent
for the fund, Canada's third-biggest public pension plan.
The plan, which administers pensions for 316,000 working and
retired teachers in Canada's most populous province, said its
net assets grew to C$175.6 billion at the end of 2016 from
C$171.4 billion a year earlier.
The fund, which has investments in more than 50 countries,
said currency movements had a negative impact of 280 basis
points on its rate of return in 2016, compared with an
830-basis-point positive effect in 2015.
Ontario Teachers' said it was 105 percent funded as of Jan.
1, meaning it had a surplus of assets with which to meet its
future pension obligations. This was the fourth year it has
posted a surplus after a decade of recording annual deficits.
Chief Executive Officer Ron Mock said the fund had achieved
that despite major challenges in the global economy.
"Being focused on the long-term, we continue to believe
having a highly diversified portfolio is the best way to pay
pensions and minimize funding volatility over time," he said.
"Last year big swings in global currencies had an impact on
the short-term value of Plan assets," he added.
Ontario Teachers' pioneered a move by Canadian pension funds
in the 1990s to invest directly in private companies,
infrastructure and real estate internationally as an alternative
to Canadian equities and government bonds.
(Reporting by Matt Scuffham; Editing by Lisa Von Ahn)