 |
A Message from OMERS President and CEO, Blake Hutcheson
I would like to begin by expressing my deep respect and gratitude to our OMERS members. Each of you has played an important role in keeping our communities safe and strong during these challenging times – thank you.
It is hard to imagine that it has been a year since COVID-19 took hold in many parts of the world, and here in Ontario. Since then, the pandemic has placed an unprecedented level of uncertainty over society, putting our public health, social stability, and economic vitality at prolonged risk.
Unfortunately, the depth and breadth of the pandemic have also weighed heavily on OMERS investment portfolio. As a result, in 2020, we are reporting a net rate of return of -2.7%.
The market stress caused by the pandemic negatively impacted our portfolio, particularly our consumer- and business-facing private market assets, which contributed to more than half of our shortfall against our benchmark. In addition, decisions we made early in 2020 to protect and enhance the Plan’s liquidity, in alignment with our long-term strategy, resulted in currency losses when the Canadian dollar appreciated.
As we finished 2019, our performance over time was strong by any measure, exceeding our benchmark over the past decade – including an 11.9% return in 2019, and a 10-year average of 8.2%. These results have moved our smoothed funded status over time from a low of 86% in 2012 to 97% in this year, while we also made progress in lowering our discount rate. OMERS paid pension benefits of $5.1 billion in 2020 to more than 180,000 members.
We pay our pensions over decades, and so we must collectively measure our performance not on the basis of a single year, but over generations. This long view has also guided key decisions we have made over the past year to lend additional strength to the enterprise and to our portfolio. These have included prudent expense management, a plan to thoughtfully wind up our hedging activities over time, and several changes to our senior leadership team. Today we have a global team of leaders that can compete against the best in the world. And while markets remain unstable with historically low interest rates, I am confident in our future. The year 2020 will not define us!
I want to assure you that pension payments continue as usual. As we transition into 2021, on behalf of the entire OMERS team, you have our utmost dedication and commitment to service at the highest possible level, and to delivering defined benefit pensions to our members that are sustainable, affordable and meaningful. This has been our relentless focus for the last 58 years – and will be, for the next 58 years and beyond.
If you would like to learn more, we welcome your participation in our Annual Meeting on April 6. Click here to register. Until then, please be safe and stay healthy.
Blake Hutcheson
President and CEO
|
|||
This electronic communication has been sent to you by OMERS Administration Corporation. If you would like to stop receiving communications of this kind you can unsubscribe. EY Tower | 900 – 100 Adelaide St W | Toronto, ON M5H 0E2 | Canada | omers.com
|
