Fully-funded plan assets grow to $9.4 billion at 8% net rate of return for 2016

Posted for Everyone, May 10, 2017

Five-year annualized net rate of return of 10.5% is well in excess of the 5.6% needed to sustain the Plan over the long term

TORONTO, May 10, 2017 - The Colleges of Applied Arts and Technology (CAAT) Pension Plan announced today Plan assets reached $9.4 billion at December 31, 2016, compared with $8.6 billion the previous year. The Plan returned 8.0% net of investment management fees, outperforming its policy benchmark by 1.3%.

Over the past five years, the Plan has earned an annualized rate of return of 10.5%, net of investment management fees.

These investment returns contributed significantly to the Plan’s 113.3% funded status, on a going-concern basis, shown in the actuarial valuation as at January 1, 2017 and released earlier this year. This is the seventh consecutive year of building reserves and strengthening the Plan’s funded position, and further demonstrates the sustainability of this Modern DB pension plan.

The CAAT Pension Plan has 44,700 members and 38 employers – 24 colleges and 14 other participating employers.

In 2016, contributions to the CAAT Plan, shared equally by employees and employers, totalled $443 million, while net income from investments totalled $700 million. The Plan paid $431 million in pension benefits for the year. 

“For members, the CAAT Plan provides an efficient worry-free way to build predictable retirement income without the need to become an investment expert, or to understand longevity risk, or the effects of inflation on purchasing power,” says Derek W. Dobson, CEO of the CAAT Pension Plan.

The 2016 CAAT Pension Plan Annual Report, entitled The Next Fifty Years, will be available on the CAAT Plan website May 15, 2017. The report reflects on 50 years of delivering benefit security and value, and looks forward to what’s planned for this Modern DB pension plan. Featured are comments from pension industry leaders such as Keith Ambachtsheer, Robert L. Brown, Malcolm Hamilton and Frederick Vettese about what the CAAT Plan has accomplished. Here is one excerpt:

“….What the people at the CAAT Plan understand is that your goal is not to maximize assets; it is not to maximize investment returns. Rather it is to maximize the probability that retired members will get the benefits they have been promised, at an affordable price….”

Robert L. Brown, Evidence Network, Retired Professor of Actuarial Science and Director of the Institute of Insurance and Pension Research, University of Waterloo

The CAAT Plan seeks to be the pension plan of choice for employers and members interested in joining a secure, well-managed, and well-governed multi-employer, jointly sponsored plan.

Created at the same time as the Ontario college system in 1967, the CAAT Plan assumed its current jointly sponsored governance structure in 1995. The CAAT Plan is a defined benefit pension plan with equal cost sharing. Decisions about benefits, contribution rates, and investment risk are also shared equally by members and employers. The Plan is sponsored by the Ontario College Administrative Staff Association, the College Employer Council and the Ontario Public Service Employees Union.


Media Contact:
John Cappelletti
Manager, Stakeholder Relations