Asset AllocationMarch 28, 2022

Healthcare of Ontario Pension Earns 11.28% in 2021

Canadian pension plan tops benchmark as asset value grows to C$114.4 billion.

Reported by Michael Katz

The Healthcare of Ontario Pension Plan reported a 2021 return of 11.28% that was led by strong private equity investments. While this was down slightly from last year’s 11.42%, it easily surpassed its benchmark’s return of 8.59%.

The performance raised the portfolio’s total asset value to C$114.4 billion ($91.1 billion), up from C$104 billion at the end of 2020. The return also helped boost the plan’s funded status to 120%, which means it has C$1.20 for every dollar it owes.

The pension fund also reported 10- and 20-year annualized rates of return of 11.06% and 9.52%, respectively, ahead of its benchmark’s returns of 8.67% and 7.74%, respectively, over the same time periods.

Private equity was the fund’s top-performing asset class, returning 23.65%, followed by equities, which returned 20.11%. The fund’s infrastructure and real estate investments earned 14.18% and 12.52%, respectively, while its credit investments returned 4.67%. Fixed income was the worst-performing asset class, and the only one to report negative earnings, as it lost 1.89% during the year.

“HOOPP’s in-house investment team successfully navigated another year of challenges in the economy related to the ongoing effects of the pandemic,” HOOPP President and CEO Jeff Wendling said in a statement. “HOOPP will continue to purposefully and thoughtfully diversify our portfolio through allocations to a wide array of strategies, including building on our successes in private markets.”

The pension fund said a full cost-of-living adjustment was granted in 2021 and again in 2022. However, because inflation is rising at its fastest pace in 40 years, retired and deferred members received a nearly seven-fold COLA increase in 2022 to 4.8% from 0.73% last year.