The Nova Scotia Teachers’ pension plan posted a net loss in assets for 2018, down to $4.94 billion from $5.11 billion at the end of 2017.

On a going-concern basis, the plan’s funded status also dropped to 75.3 per cent, from 78.4 per cent, as at Dec. 1, 2018, according to the Teachers’ Pension Plan Trustee Inc., which oversees the plan.

A press released attributed the slump to three main factors: contribution levels were far lower than the funds paid out in benefits last year; the plan’s liabilities also continued to rise; and flat investment returns during 2018 weren’t sufficient enough to offset these pressures.

Read: N.S. pension legislation changes include new reserve accounts

Overall, the plan posted a 0.42 per cent gross return and a 0.17 per cent return net of investment management fees for 2018. While muted, the returns did outperform the plan’s policy benchmark, which posted a negative 0.03 per cent return.

“In 2018, equity markets were modestly positive in the first three quarters but suffered a market collapse and the return of volatility in the fourth quarter,” said John Carter, chair of the TPPTI, in a press release. “This created a challenging investment climate. The plan’s asset mix is intended to reduce risk during turbulent periods. The asset mix met this objective.”

The TPPTI is joining with the plan’s sponsors, the government of Nova Scotia and the Nova Scotia Teachers Union, to engage an independent pension consultant to identify changes that could meaningfully improve the plan’s sustainability, noted Carter.

Read: PSP Investments invests in U.S. insurance broker

In further pension investment news, the Public Sector Pension Investment Board is joining Onex Partners V and other investors to invest $1.8 billion in Convex Group Ltd.

Convex deals in property and casualty insurance, specializing in complex risk across diversified business lines.

“Consolidation within the insurance sector has created opportunity for an independent carrier with a focused, specialist proposition, capable of serving clients with complex risk exposures,” said Todd Clegg, managing director of Onex. “The Convex platform is designed to satisfy this demand.”

Copyright © 2020 Transcontinental Media G.P. Originally published on benefitscanada.com

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