OMERS pension fund reports 11.5 per cent gain for 2010

Plan has grown by almost $10 billion since 2008

(Reuters) - Ontario Municipal Employees Retirement System (OMERS), one of Canada's largest pension funds, said the value of its net assets rose 11.5 per cent last year to C$53.3 billion, helped by stronger global financial markets.

The total rate of return for 2010 was 12.01 per cent, compared with 10.6 per cent in 2009, said the fund.

OMERS, which invests on behalf of more than 400,000 retired and municipal employees in the province of Ontario, said it continued to face a shortfall in its pension funding obligations as a result of the economic downturn in 2008, when the value of its assets fell by 15.3 per cent.

“OMERS achieved excellent investment results in 2010, supporting our mission of creating surplus wealth for plan members and sponsors,” said John Sabo, chair of the OMERS Administration board of directors. “Our performance, which stems from our asset mix shift to world-class private market investments, and strong market investment returns driven by the recovery of the global financial markets, reflects our focus on risk-adjusted returns, which is designed to manage volatility and respond to our long-term liability profile.”

OMERS had a funding deficit last year of C$4.5 billion, compared with a deficit of C$1.5 billion in 2009.

Based on its asset mix policy and active investment strategy, it should be able to generate average annual returns of between 7 per cent to 11 per cent over the next five years, said the fund. That, combined with temporary contribution increases and benefit reductions, would return the plan to surplus between 2015 and 2020.

The fund also said it is pushing forward with various programs to increase its assets, such as allowing members to invest their registered retirement savings in the OMERS Fund, effective Jan. 1, 2011. Other specific capital-raising programs will be launched in 2011, it said.

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