Annual return of 16% net of investment management fees
Toronto, April 23 2020 – The CAAT Pension Plan’s financial results, released today, confirm that the Plan is well-funded and has ample reserves to weather the recent investment market downturn. The Plan has been steadily building reserves over the past decade, consistent with the focus on benefit security.
The CAAT Plan concluded 2019 with a total of $13.5 billion in assets, up from $10.8 billion the previous year. The fund returned 16.0%, net of investment management fees, over the one-year period, and moved its 10-year annualized rate of return net of fees to 10.0%.
The health of the Plan is very strong. Based on prudent assumptions about the future, the Plan is 118% funded on a going-concern basis, with a $2.9 billion funding reserve, plus an additional $0.8 billion in asset smoothing reserves to absorb investment market volatility.
CAAT also regularly conducts asset-liability modelling studies to measure its health against a variety of diverse economic and demographic scenarios. These studies confirm the Plan will remain strong even under the most severe downside scenarios.
“The markets’ response to the COVID-19 pandemic has created near-term investment declines; but the Plan has prepared well for the unexpected,” explains Derek W. Dobson, CEO of the CAAT Plan. “The Plan’s globally diversified asset portfolio has also helped mitigate recent declines in the equity markets.”
“The lifetime pensions members have earned are not affected by short-term investment market fluctuations,” adds Dobson. “Our stability and focus on benefit security provide beneficiaries with peace of mind in an uncertain world.”
CAAT’s DBplus plan design has made secure defined benefit pensions accessible to more working Canadians in different sectors across the country. More than 15,000 members from 28 new employers have joined CAAT, representing nine industries across the for-profit, not-for-profit, and broader public sectors, and includes the support and participation of 14 different unions. Welcoming more groups of workers from across Canada will continue to strengthen the Plan.
Read the complete 2019 CAAT Pension Plan Annual Report, Valuable workplace pensions made simple (PDF).