(April 2, 2013) — The head of Ontario Teachers’ Pension Plan has informed his board that this year will be his last before retirement, a spokesperson for the fund confirmed to aiCIO.
There is no clear successor for Jim Leech, the spokesperson said, but the internal and external search process has been formally underway for two years.
Leech has led the C$129.5 billion public pension fund since 2007. He joined the organization six years before that, leaving his role as president and CEO of Unicorp Canada to lead Ontario Teachers’ private capital unit.
Assets under management have almost doubled since Leech came aboard.
The fund’s latest returns, announced today, indicate that Leech is on track for a strong finish to his career. The plan beat its benchmark by 200 basis points in the 2012 calendar year, gaining 13% to reach record assets under management.
“Returns earned above our benchmark directly support the goal of pension security and demonstrate the value of our approach to active investing,” Leech said. “The investment team successfully navigated significant risks and turmoil in the global economy again in 2012 to earn an excellent rate of return.”
Since inception in 1990, investment income has accounted for 77% of the funding of members’ pensions, according to plan documents, compared with 23% from both member and government contributions.
These results bring Ontario Teachers’ funded status to 97%—which in Canada constitutes “funding turmoil,” as the Globe and Mail characterized the situation today.
Assets and liabilities had been balanced as of January 1, 2012, but a $5.1 billion shortfall emerged over the course of the year. The earnings release cited declining interest rates’ stimulating effect on liabilities, and the decreasing ratio of working-to-retired members.
Leech has created a taskforce to investigate the shortfall, the Globe and Mail reported.
“We are encouraged to see that the sponsors”—Ontario’s provincial government and teachers’ federation—”have committed to address the imbalance for the next valuation filing with the regulator,” Leech said.
By then, Leech will be busy addressing his own retirement.
Related Profile: Neil Petroff, CIO, Ontario Teachers’ Pension Plan