Fund Performance


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  • Let’s start with some quick facts about our pension plan and fund We have a complicated plan – but we have ONLY ONE and it’s the same one for all. The trend is up for Plan membership contributions benefits and (usually) for the value of the fund – but 2008 was a terrible year.
  • A quick review of the Plan itself. DC means “defined contribution” contribution calculated as a percentage of salary University matches these contributions and makes additional contributions as required benefit at retirement depends on rate of return DB means “defined benefit” minimum benefit amount calculated from salary and years of service
  • (Left hand side): Asset mix Policy – 60% equity / 40 bonds / 10% Real Assets (Right hand side): Manager Structure - 12 managers, 14 portfolios Infrastructure (yellow) - will increase as capital is called - 2 managers currently - additional 1 to be selected shortly Bonds (orange) - 2 managers, 1 active & 1 passive Cdn Eq (green) - 3 specialists that complement each other 1 value, 1 growth, 1 core Int’l (blue) - 2 active managers that complement each other Global (purple) – 1 active manager US (grey) - 2 managers, 1 passive large cap, 1 active mid-cap
  • People often ask me how decisions are made and by whom with respect to the pension plan and fund. Here’s an overview of the governance structure and decision making for the plan and fund. Highlight responsibilities of each As we are an educational institution and not a pension or investment organization, we don’t have the resources to internally manage a 7,000 member pension plan and a billion $ fund so ….
  • … many aspects of the plan and fund management are outsourced.
  • 2008 was a crisis year in the economy and the capital markets cheap and easy credit, record high commodity prices, lax regulations, reckless leverage, and the proliferation of complex financial instruments with risks that were misunderstood and underestimated, ultimately resulted in the bursting of the largest credit bubble in history, causing virtually every market around the globe, developed and emerging, to lose value massive direct intervention and monetary stimulus by governments all over the world. All equity markets were deep in the red, while bond markets managed to post positive returns. The Canadian $ depreciated against the USD and the EURO in 2008, leading to currency gains in the infrastructure portfolio, but foreign currency gains were partially offset by the currency hedge.
  • Any Questions?
  • Fund Performance

    1. 1. York University Pension Fund Leona Fields Manager, Pension Fund Annual Pension Meeting April 24, 2009
    2. 2. Quick Facts <ul><li>One pension plan for all York University faculty and staff </li></ul><ul><li>Plan membership </li></ul><ul><ul><li>Active: 4,330 </li></ul></ul><ul><ul><li>Deferred: 1,320 </li></ul></ul><ul><ul><li>Retired: 1,700 </li></ul></ul><ul><li>In 2008 </li></ul><ul><ul><li>$ 52.8 M in contributions in </li></ul></ul><ul><ul><li>$ 60.3 M in benefits paid out </li></ul></ul><ul><ul><li>$ 8.6 M in expenses </li></ul></ul><ul><li>2008 rate of return -19.2% net </li></ul><ul><li>Current value of the Pension Fund is just over $1.0 Billion </li></ul>
    3. 3. Pension Plan Overview <ul><li>Hybrid Pension Plan: DC and DB combined </li></ul><ul><li>Members and University make contributions (DC part) </li></ul><ul><li>All contributions are invested in the Fund and earn the Fund rate of return </li></ul><ul><li>At retirement, the pension amount is calculated from the accumulated value of the the member’s Money Purchase account </li></ul><ul><ul><li>The minimum pension amount is calculated from a formula based on member’s salary and years of service (DB part) </li></ul></ul><ul><li>Throughout retirement, pensions are adjusted annually by the excess of the 4-year Fund return over 6% </li></ul><ul><ul><li>Pensions paid will NEVER be reduced </li></ul></ul>
    4. 4. Key Differentiating Factors for York Pension Fund <ul><li>Primarily a Defined Contribution Plan </li></ul><ul><ul><li>But members do NOT have investment options </li></ul></ul><ul><li>Benefits depend on investment returns </li></ul><ul><ul><li>Adjustments after retirement continue to depend on investment returns – not inflation </li></ul></ul><ul><li>Investment policy decisions must consider multiple risk profiles </li></ul><ul><ul><li>Plan Sponsor </li></ul></ul><ul><ul><li>New plan members </li></ul></ul><ul><ul><li>Members close to retirement </li></ul></ul><ul><ul><li>Retirees </li></ul></ul>
    5. 5. Pension Fund Investment Overview
    6. 6. York’s Pension Governance - Internal <ul><li>Plan/Benefits side </li></ul><ul><ul><li>Board of Governors </li></ul></ul><ul><ul><li>Vice President, Finance & Administration </li></ul></ul><ul><ul><li>Pension & Benefits Office </li></ul></ul><ul><ul><li>All University Committee on Pensions </li></ul></ul><ul><li>Fund/Investments side </li></ul><ul><ul><li>Pension Fund Board of Trustees </li></ul></ul><ul><ul><li>Sub-Committee on Investment Performance </li></ul></ul><ul><ul><li>Pension Investment Staff </li></ul></ul>
    7. 7. York’s Pension Governance - External <ul><li>Investment Managers </li></ul><ul><li>Custodian - CIBC Mellon </li></ul><ul><li>Auditor - Ernst & Young </li></ul><ul><li>Investment Consultant - Towers Perrin </li></ul><ul><li>Actuary - William M. Mercer </li></ul><ul><li>Pension Administration System – Seclon Logic </li></ul><ul><li>Lawyer – McCarthy T é treault </li></ul>
    8. 8. What Happened in 2008?
    9. 9. What’s in store for 2009? <ul><li>Instability in the markets continues </li></ul><ul><ul><li>Some positive signs but likely still a long way until we’re out of the woods </li></ul></ul><ul><li>Key Initiatives for 2009 </li></ul><ul><ul><li>Investment in Infrastructure funds and selection of additional Infrastructure manager </li></ul></ul><ul><ul><li>Implementation of Active Currency Hedge </li></ul></ul><ul><ul><li>Risk Management / Asset Allocation Review Project </li></ul></ul>
    10. 10. Contact Information <ul><li>Leona Fields </li></ul><ul><li>Ext. 55122 </li></ul><ul><li>[email_address] </li></ul><ul><li>http:// </li></ul>