Healthcare of Ontario Pension Plan posts 11.42% return in 2020, surpasses $100 billion in assets: Strong results allow for benefit improvement for active members
TORONTO, March 31, 2021 (GLOBE NEWSWIRE) — The Healthcare of Ontario Pension Plan (HOOPP) announced today that it generated an 11.42% rate of return in 2020. In addition, it surpassed the $100 billion asset milestone, closing the year at $104.0 billion in net assets, up from $94.1 billion at the end of 2019. The Plan’s funded status is 119%, meaning that for every dollar it owes in pensions it has $1.19 in assets.
HOOPP has a 10-year annualized rate of return of 11.16%. In its latest report, consulting firm CEM Benchmarking found that HOOPP’s 10-year results were among the highest of pension plans worldwide, and was highest among CEM’s Canadian data set of 66 pension funds.
“HOOPP is very pleased to have delivered strong results for our members in the Ontario healthcare sector, and to have done so during what remains an extremely challenging time for them,” said Jeff Wendling, President and CEO, HOOPP. “It is a privilege to be the pension plan for healthcare heroes and our top priority is to ensure their pension remains safe and secure.”
Throughout 2020, HOOPP’s investment team successfully navigated volatile markets. The returns from the fixed-income and public equities portfolios were especially strong, and the real estate portfolio performed very well compared to its benchmark. The Fund’s liquidity management capabilities helped HOOPP act on significant buying opportunities to further strengthen the Fund.
Wendling added: “Being able to achieve these results in such a tumultuous year highlights the resilience of our highly diversified fund and long-term investment management approach. I am proud of what our team was able to accomplish last year for our members.”
Thanks to the strong results in 2020 and in previous years, HOOPP’s Board of Trustees has approved a benefit improvement for members. Effective April 1, members who were active in the Plan as of that date will receive an increase to their annual lifetime pension for any contributory service in the Plan in 2018, 2019 and/or 2020. Details of this change can be found on HOOPP’s website.
The Plan’s strength also allowed HOOPP to provide a cost of living adjustment (COLA) in 2020 for our retired and deferred members to help their pensions keep up with rising costs.
HOOPP continues to evolve its investment strategies to adapt to the current low interest rate environment. This includes adjusting the Fund’s asset composition and continuing to find new ways to further diversify the portfolio. This is an evolution of the liability-driven investment (LDI) approach that has served HOOPP well for many years. At the core of this investment approach is matching assets with liabilities, which ensures HOOPP takes a long-term view and invests solely with its members’ pensions in mind.
In addition to delivering strong results, HOOPP continued to provide a high level of service to members while operating efficiently. Operating costs for the year represented just 0.31% of assets.
Wendling said: “For all our members have to worry about right now, they don’t have to worry about their pension. While we remain in a period of economic uncertainty, HOOPP’s long track record of positive returns and low costs helps set a solid foundation to ensure that the Plan can pay pensions to members today and in the future.”
About the Healthcare of Ontario Pension Plan
HOOPP serves Ontario’s hospital and community-based healthcare sector, with more than 610 participating employers. Its membership includes nurses, medical technicians, food services staff, housekeeping staff, and many others who provide valued healthcare services. In total, HOOPP has more than 400,000 active, deferred and retired members.
HOOPP operates as a private independent trust, and is governed by a Board of Trustees with a sole fiduciary duty to deliver the pension promise. The Board is jointly governed by 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). This governance model provides representation from both management and workers in support of the long-term interests of the Plan.
James Geuzebroek, Senior Manager, Media and Public Affairs, email@example.com