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Pension Funds

CAAT pension fund tops benchmark with 15.8% return in 2017

Colleges of Applied Arts and Technology Pension Plan, Toronto, returned a net 15.8% return on investments in 2017, helping to boost its overall assets to C$10.8 billion ($8.6 billion), according to CAAT's annual report released Tuesday.

The returns were above the 12.3% custom benchmark return for the year. For the three years ended Dec. 31, the plan returned a net 10.7% vs. the benchmark's 8%, and for five years, 11.4% compared to the 9.2% benchmark return. All multiyear returns are annualized.

CAAT returned 8% in 2016.

Net investment income for 2017 was C$1.43 billion vs. C$700 million in 2016.

Assets were up 16% over 2017. CAAT's funded status as of Dec. 31 was 118%, up from 113% 12 months earlier.

Emerging markets equity had the plan's highest return for 2017, at 29.7% vs. its 28.3% benchmark return, followed by private equity at 24.8% vs. the benchmark's 18.8%; global diversified equity, 20% vs. 14.6%; and real assets, 16.4% vs. 7.1%.

Canadian equity returned 8% compared to its benchmark's 9.1% return; long-term bonds, 6.9% vs. 7%; Canadian bonds, 2.7% vs. 2.5%; real return bonds, 0.8%, the same as the benchmark; and commodities, -3.1% vs. -1.2%. All returns are net of fees.

CAAT's asset allocation as of Dec. 31 was 35% global developed equity, 16% nominal long bonds, 13% real assets, 10% emerging markets equity, 6% private equity, and 5% each Canadian equity, Canadian bonds, real-return bonds and commodities.

Total contributions to the CAAT plan in 2016 were C$444 million, split evenly from employers and employees. A total of C$456 million was paid out in pension benefits for the year.

The CAAT plan is sponsored by the Ontario College Administrative Staff Association, the College Employer Council and the Ontario Public Service Employees Union.

The full annual report is on the CAAT website.