Ontario DB pension solvency up again in third quarter: FSRA

The Ontario Municipal Employees’ Retirement System returned 4.6 per cent in 2023, or $5.6 billion, in investment income in 2023, according to its latest year-end report.

It found as of Dec. 31, 2023, the plan’s net assets stood at $128.6 billion, up from $124.2 billion in 2022. It also reported a funded status of 97 per cent in 2023, an increase from 95 per cent in 2022.

Public equities (10.4 per cent), credit (8.3 per cent) and bonds (5.8 per cent) all generated higher returns than in 2022 (negative 11.9 per cent, 3.4 per cent and negative 3.8 per cent, respectively).

Read: OMERS pension benefits accounted for 9.3% of Ontario retirement income in 2023: report

Conversely, returns from private asset strategies were diminished due to market volatility in the form of increased debt and operating costs. Infrastructure and private equities provided positive returns (5.5 per cent and 3.9 per cent, respectively), but real estate registered a decrease of 7.2 per cent for the year from 13.6 per cent in 2022.

Still, infrastructure (21 per cent) and credit (21 per cent) were the co-leaders of the OMERS’ asset mix in 2023, alongside public equities (20 per cent), private equities (19 per cent), real estate (15 per cent), bonds (eight per cent) and cash and funding (four per cent).

“As we look ahead to 2024, higher interest rates are creating opportunities for us to deploy capital into fixed income to improve future returns, consistent with our new, more diversified strategic asset mix,” said Blake Hutcheson, the OMERS’ president and chief executive officer, in a press release. “We are confident in our ability to generate long-term returns that will build up the Plan’s assets given the high quality of our investment portfolio and the strategies that underpin it. I am very pleased with the way we are positioned for the future.”

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