TORONTO, ON--(Marketwired - Mar 3, 2016) - The Healthcare of Ontario Pension Plan (HOOPP) today announced its funded position was 122% at the end of 2015, up 7% from 115% in 2014. As a result of the stable funding position, contribution rates made by HOOPP members and their employers have remained at the same level since 2004.
The rate of return on investments was 5.12% for the year ended December 31, 2015, with net assets growing to a record $63.9 billion from $60.8 billion in 2014. Investment income for the year was $3.1 billion down from $9.1 billion in 2014, and HOOPP exceeded its portfolio benchmark by 1.17%, or $0.7 billion. The Plan's 5-year return stands at 12.03%, the 10-year return stands at 9.32%, and the 20-year return at 9.46%.
"Even during a year of significant economic uncertainty, HOOPP remains fully funded which means that we have sufficient resources to meet all of our current and future pension and benefit payments," said HOOPP President and CEO Jim Keohane. "Being fully funded means we are able to consistently deliver to our members and our liability driven investing approach has been critical to ensuring the long-term health and sustainability of the Plan."
HOOPP's liability driven investing (LDI) approach has served members well by providing stability through challenging markets. It is a holistic, long-term investment approach which considers the Plan's assets in relation to pension obligations, in order to balance risk with returns.
For more information about HOOPP's financial results please view the 2015 Annual Report, available on hoopp.com.
2015 Return Highlights
HOOPP's liability driven investing approach utilizes two investment portfolios: a liability hedge portfolio that seeks to mitigate risks associated with our pension obligations, and a return seeking portfolio designed to earn incremental returns to help to keep contribution rates stable and affordable.
In 2015, the liability hedge portfolio provided approximately 62% of our investment income. Nominal bonds and real return bonds provided most of the income within this portfolio, generating returns of 8.9% and 2.2% respectively. The real estate portfolio was also a significant contributor during the year, with an 8.0% currency hedged return.
Within the return seeking portfolio, private equities were the largest contributor to investment income, returning 17.7% on a currency hedged basis, and other return seeking strategies also contributed to the income of the Fund. Public equities contributed 0.8%.
Rates of Return by Asset Class (Liability Hedge Portfolio)
| Asset class | 2015 Rate Of Return |
| Nominal bonds | 8.9% |
| Real return bonds | 2.2% |
| Real estate | 8.0% (currency hedged) |
Rates of Return by Asset Class (Return Seeking Portfolio)
| Asset class | 2015 Rate Of Return |
| Private equities | 17.7% (currency hedged) |
| Public equities | 0.8% |
Other return seeking strategies also contributed to the income of the Fund.