After six years of strong investment results, the OPSEU Pension Trust has reported an overall rate of return of negative 3.5% for 2001. Over the seven years since the OPSEU Pension Plan was launched, OPTrust has achieved an average annual return of 11.3 per
cent.

At the end of 2001, the Plan’s net assets stood at $9.4 billion, down from $10 billion in 2000. This decrease in net assets reflects a $359 million investment loss as well as pension and other benefit payments made over the year.

“OPTrust’s return, like that of all large institutional investors, is closely tied to the performance of the markets,” says Stan Sanderson, chair of OPTrust’s Board of Trustees. “With the retreat of Canadian and international equity markets, 2001 was a difficult year for investors.”

The OPSEU Pension Plan is a defined benefit plan covering more than 48,000 active members and 16,000 current pensioners. The plan is jointly sponsored by the Province of Ontario and the Ontario Public Service Employees Union. Plan members include employees of the Province and other public sector organizations who are represented by the OPSEU or the Ontario Liquor Boards Employees’ Union.

Despite its negative return, OPTrust outperformed its weighted benchmark, which showed an overall drop of 4.4 per cent for the year. The benchmark measures the overall performance of the markets in which OPTrust invests. Since 1995, OPTrust has bettered its benchmark in five of the past seven years.

To meet its funding obligations, OPTrust has set a long-term return target of 7.5%. The Plan’s seven-year average return has exceeded this target by 3.8%. OPTrust also outperformed the 10.5% average return of its weighted benchmark for the same period.

In 2001, OPTrust increased its investment in international equities to 38% of the Plan’s assets, from 29 per cent in 2000. This shift allows the plan to capitalize on opportunities for improved diversification available in developed international markets. At the end of 2001, Canadian equities accounted for 23% of the portfolio, fixed income investments represented 33%, and real return bonds, real estate and cash made up
the remaining 6%.