Ontario Public Service Pension Plan, Toronto, rode strong equity gains to boost its overall assets to C$21 billion (US$18.9 billion) in 2013.
In the pension fund's annual report released Thursday by the Ontario Pension Board, which administers the defined benefit plan, global equities returned 37% last year, while Canadian equities returned 18%, compared with 35.9% for the MSCI World (Canadian dollar) and 13% for the S&P/TSX Composite indexes.
Real estate returned 12.9% vs. its custom benchmark's 9.7% return; infrastructure, 12% vs. 0.9% for its custom benchmark; emerging markets equities, 5% vs. the MSCI Emerging Markets (Canadian dollar) index's 4.3%; and Canadian fixed income, 1.8% vs. -1.2% for the DEX Universe Bond index.
Private equity, which returned 17.8%, was the only asset class to underperform its benchmark, which was 30.2%. A statement from OPB’s investment team supplied by spokeswoman Stephanie Woodward said, “Our 17.8% return is an excellent return for a private equity program within its first five years of startup … The benchmark is really only an effective benchmark within a mature private equity program and should be evaluated over the long term.”
The pension fund's asset allocation as of Dec. 31 was 28.2% fixed income, 23.7% developed markets equities, 15.5% emerging markets equities, 14% real estate, 8% cash and short-term investments, 7.6% Canadian equities, 2.5% infrastructure and 0.5% private equity.
Employee contributions totaled C$298 million; employer contributions, C$275 million; and the Ontario government, the plan's sponsor, contributed C$127 million.
The plan was 96% funded as of Dec. 31, up two percentage points from 12 months earlier.
The board had released its overall 2013 return in March; the annual report detailed the pension fund's asset class returns and other details.