The Colleges of Applied Arts and Technology (CAAT) Pension Plan reported an 11.8% rate of return last year and has a surplus.
The plan’s net assets rose to $6.3 billion at the end of 2012, compared with $5.6 billion the previous year. It’s also 103% funded on a going-concern basis with a funding surplus of $347 million.
The 11.8% rate of return is gross of investment fees and expenses totalling 50 basis points. Since the economic crisis, the CAAT Pension Plan has earned an average annual rate of return of 11.1% before expenses and 10.5% net of expenses.
Contributions to the CAAT plan were $332 million in 2012, while income from investments was $624 million. The plan paid $332 million in pension benefits for the year.
CAAT has been in exploratory discussions with individual universities, employer and faculty associations, and government officials about the feasibility of building a post-secondary sector pension plan that leverages its infrastructure and experience, reducing costs and risks for all stakeholders.
“The proposal we’ve been discussing offers an immediate solution for those universities with pension funding problems or who want to better manage their risks,” says Derek Dobson, CEO of CAAT. “Our idea is a ready-made, long-term solution that limits contribution rate volatility and risks for universities and colleges.”