TORONTO, April 17, 2012 /PRNewswire/ - With returns of 12.19 per cent in 2011, the Healthcare of Ontario Pension Plan ended the year 103 per cent funded. For the first time, HOOPP's net assets surpassed the $40 billion mark.
HOOPP President & CEO Jim Keohane credited HOOPP's liability driven investing (LDI) strategy for the plan's solid funded position. This strategy was developed in the early 2000s and its purpose is to ensure that HOOPP's investments will surpass the growth in the future pensions owed to members, also called the plan's liabilities.
"HOOPP's benefits are fully funded. This means that we have sufficient resources to pay every pension owed to the membership - not just now but into the future too," says Keohane.
HOOPP has a long history of being well funded, having been at least 96 per cent funded in every valuation for over 30 years. While superior investment returns have helped keep the plan fully funded, pension governance has helped HOOPP become a model of a defined benefit plan that works.
HOOPP's Board of Trustees recognize that there are two sides to the pension equation and actively adjust benefits and contributions as the economy changes, ensuring the Plan's long-term sustainability. The jointly governed model ensures that the Board has focused on delivering on the pension promise to ensure retirement security for its members and employers and HOOPP has maintained stable contribution rates for over a decade.
"The best returns in 2011 were in long bonds, real return bonds, real estate and private equity. These are all asset classes which are employed heavily in our LDI portfolio. That is why funds employing LDI have achieved better results in 2011," Keohane said.
In 2011, HOOPP entered the international real estate market, closing its first deals in the United Kingdom and the Czech Republic. HOOPP has a 10-year average net investment rate of return of 8.4 per cent, one of the best in the industry, which has added $22.9 billion dollars to the value of the Fund.
HOOPP's 270,000 members include nurses, medical technicians, food services staff and laundry workers, and many other people who work hard to provide valued Ontario healthcare services. HOOPP members and employers contribute to the defined benefit pension and HOOPP pays out more than $1.2 billion in pensions annually.
For full details on HOOPP's 2011 results, please see the HOOPP Annual Report: http://hoopp.com/Investments/Annual-Report/
About the Healthcare of Ontario Pension Plan
Created in 1960, the Healthcare of Ontario Pension Plan (HOOPP) is the pension plan of choice for Ontario's hospital and community-based healthcare sector with over 370 participating healthcare organizations.
As a defined benefit plan, HOOPP provides eligible members with a retirement income based on a formula that takes into account a member's earnings history and length of service in the Plan. Once eligible members start receiving a pension, they receive it for life.
HOOPP is governed by a Board of Trustees with representation from the Ontario Hospital Association (OHA) and four unions: the Ontario Nurses' Association (ONA), the Canadian Union of Public Employees (CUPE), the Ontario Public Service Employees' Union (OPSEU), and the Service Employees International Union (SEIU). The unique governance model provides representation from both management and workers in support of the long-term interests of the Plan.
HOOPP was named one of Canada's 10 Most Admired Corporate Cultures.