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Pension Funds

Ontario Teachers chalks up 2.5% return for 2018, outpacing benchmark

Ontario Teachers’ Pension Plan, Toronto, returned a net 2.5% in 2018, bringing its total assets to C$191.1 billion as of Dec. 31.

Ontario Teachers' Pension Plan, Toronto, returned a net 2.5% in 2018, bringing its total assets to C$191.1 billion ($140.1 billion) as of Dec. 31.

According to OTPP's 2018 annual report, which was posted on its website Tuesday, the pension fund's return was above its custom benchmark's 0.7% return. Ontario Teachers returned 9.7% in 2017.

OTPP's funded status as of Jan. 1 was 104%, down slightly from 105% at the end of 2017.

As of Dec. 31, Ontario Teachers returned a net annualized 8% for five years, 10.1% for 10 years and 9.7% since the plan's inception in 1990.

The 2018 returns added C$5.2 billion in investment income.

Ontario Teachers' private equity investments generated a return of 19.5% for the year ended Dec. 31; infrastructure, 8.8%; credit, 6.3%; real assets, 5.8%; fixed income, 2.8%; inflation-sensitive assets, 2.6%; and public equities, -3.6%.

Its asset allocation as of Dec. 31 was 41% fixed income, 26% real assets, 18% private equity, 17% equities, 15% inflation-sensitive, 8% credit, 7% absolute return and -32% money market funds.

"In 2018, we were able to generate positive returns even as we navigated some of the most volatile markets in years, thanks to the work we have done to build a diversified investment portfolio that can perform across market scenarios," said Ron Mock, president and CEO, in a news release announcing the annual report. "Concurrently, we are pleased to report that as of Jan. 1, 2019, we were fully funded for a sixth consecutive year, with 100% inflation protection being provided on all pensions."