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Ontario Teachers’ Pension Plan Earns 4.2% in 1st Half of 2024

The Canadian pension fund’s asset value increased nearly C$12 billion for the year to June 30.

By Michael Katz



The Ontario Teachers’ Pension Plan Board reported a 4.2% return for the first half of the year, raising its net asset value to C$255.8 billion ($189.3 billion) from C$243.9 billion at the beginning of the year. This is compared with a 1.9% investment return and C$249.77 billion gain in asset value during the first half of 2023.

The pension fund also announced that its investment portfolio rose the same 4.2% during the 12 months that ended June 30 and that it earned five- and 10-year annualized net returns of 6.7% and 7.3%, respectively, with a 9.3% annualized return since its inception in 1990. The OTPP is fully funded for the 11th consecutive year and had a C$19.1 billion preliminary funding surplus, as of January 1.

“Our results for the first half of 2024 reflect an ability to generate positive returns in a range of market conditions across our investment teams, and maintain a well-funded status for our members,” said OTPP President and CEO Jo Taylor in a statement.

The pension fund’s portfolio allocation to equities increased to C$103.8 billion, as of June 30, from C$91.4 billion at the end of 2023, while its fixed-income allocation declined to C$94.9 billion from C$95.8 billion. Inflation-sensitive investments rose in value to C$53.5 billion from C$45.4 billion during the first half, while its real estate and infrastructure investments rose to C$71.7 billion combined, from C$67.4 billion.

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Meanwhile, the value of its credit investments declined to C$34.8 billion at the end of June from C$38.6 billion at the start of the year, and its investments in absolute return strategies rose to C$20.5 billion from C$19.5 billion.

The OTPP also noted that during the first half of the year, Chief Operating Officer Tracy Abel announced that she will retire at the end of 2024 and that Mabel Wong was named chief financial officer, succeeding Tim Deacon.


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Home > News > Pensions > Pennsylvania SERS Retains Empower, Aims to Save $1.4M per Year Under New Contract
Pensions

Pennsylvania SERS Retains Empower, Aims to Save $1.4M per Year Under New Contract

According to the pension fund, changes under the new contract mean the financial services firm will have ‘some skin in the game.’

By Michael Katz



The Pennsylvania State Employees’ Retirement System has rehired financial services company Empower as its third-party administrator. The firm submitted the winning bid in a request for proposals to oversee the pension fund’s restructured deferred compensation and defined contribution plans.

“Last fall the board issued an RFP that included a series of material changes in the scope of services for the plans,” said Pennsylvania SERS Executive Director Joseph Torta in a statement. “The biggest is modernizing the flow of money directly through the third-party administrator, as is the industry standard for these types of plans.”

Torta added that the aim of hiring a third-party administrator is “to give plan participants quicker access to their money while reducing plan costs.”

In May, when Penn SERS ended a year-long comprehensive RFP and announced its search for a third-party administrator, it announced the new contract would restructure plan administration for enhanced services and reduce administrative fees for participants of its deferred compensation and defined contribution plans by 35% each. The pension fund expected this would result in approximately $1.4 million in savings each year.

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“We assembled a team to strategically restructure administrative processes and then draft an RFP that not only secures a vendor after the current contract expires but also changes the scope of services,” Torta said at the time, adding that the move “will materially reduce complexity and cost.”

According to that announcement, the new contract will allow plan participants to access their funds within an average of 48 hours, and participants’ contributions will be deposited in their accounts between five and seven days sooner than they were previously.

The RFP also included a requirement that 20% of the third-party administrator’s fees are at risk based on service-level agreement thresholds. “As a result,” Torta said at the time, “the winning vendor has some skin in the game to assure that their services don’t slip over time.”


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