Annual General Meeting
November 10, 2011
Prepared by Aon Hewitt Consulting
Presentation to U of S 1999 Academic Pension Plan
Aon Hewitt and the University of Saskatchewan
 Two decade relationship
 Services provided for the 1999 Academic Plan
– Performance Measurement
– Performance Reporting—How are we doing?
– Investment Manager Reporting and Evaluation—How are our Managers doing?
– Investment Policy Reviews—What should we invest in?
– General Investment Research—What should we know ?
– Anything the Committee asks for!
08700/Academic/003/JAJ.ppt-336-J9-29575 Nov 2011
1
Aon Hewitt Performance Monitoring
 Goal—to meet your investment monitoring objectives
– Provide the numbers you need to see
– More importantly, going beyond to address the whys
 Our approach differentiates us
– Knowledge of managers
• Updates and rating changes
• Interpreting results—style, markets, peers
– Client meetings
• Interactive discussion
• Managers and policies always under review
 Set the stage to take action where necessary
08700/Academic/003/JAJ.ppt-336-J9-29575 Nov 2011
2
Investment Policy Reviews
08700/Academic/003/JAJ.ppt-336-J9-29575 Nov 2011
3
Investment Policy Reviews—Investment Strategy Development
Declining Financial Significance
Determine Return Objectives
and Risk Profile
Consider Investment Philosophy
Liability Focused vs Total Return
Determine Equity/Bond split with
an acceptable level of downside
Seek to diversity unrewarded risks via asset
class diversification and hedging strategies
Bond Strategies
Short Term
Universe
Long Term
Real Return
High Yield
Global
Equity Strategies
Canadian
U.S.
Non North
American
Global
Emerging
Alternative
Strategies
Real Estate
Hedge Funds
Private Equity
Infrastructure
Commodities
Determine management structure to implement,
considering investment beliefs, costs and administrative ease
Mandate
Balanced
Specialist
Hybrid
Capitalization
Large
Mid
Small
Style
Value
Growth
Core
Philosophy
Active
Passive
Enhanced
Choose managers to implement
08700/Academic/003/JAJ.ppt-336-J9-29575 Nov 2011
4
General Investment Research
 Committee is committed to ongoing education
 Education can be external
– Conferences, seminars and courses
 Education can be internal
– Aon Hewitt provides targeted education as needed
 Recent Education provided by Aon Hewitt
– Real Estate
– Liability Driven Investing
– Securities Lending
08700/Academic/003/JAJ.ppt-336-J9-29575 Nov 2011
5
Total Plan Investment Performance—
Periods Ending September 30
Relative Performance
Total Fund vs. Benchmark
108
Market Capture
Quarter %
6
Qtrs
%
Up Markets
25
89.7
Down Markets
15
74.2
Qtr
Benchmark -4.5
Total Fund -3.9
YTD
-2.6
-0.7
Yr
1.0
2.2
4-Yr
0.2
1.8
Risk
8.9
7.7
106
4
104
2
102
0
100
-2
98
-4
96
3Q01
3Q03
3Q05
Annualized Returns (10 Years):
08700/Academic/003/JAJ.ppt-336-J9-29575 Nov 2011
3Q07
3Q09
Total Fund 4.8%
Benchmark 4.3%
6
3Q11
Cumulative %
8
Total Plan Investment Performance—Key Drivers
 Year to Date: Total Fund -0.7% to -2.6% Benchmark
 One-Year Performance: Total Fund 2.2% to 1.0% Benchmark
– Global equity markets fell dramatically in third quarter
– Tweedy outperformed in NNA equities – stock selection, sector selection, country
allocation all contributed
– JF outperformed in NNA equities – defensive positioning when markets declined
 Four-Year Performance: Total Fund 1.8% to 0.2% Benchmark
– Benchmark flat – all major equity markets were negative over four years
– Bonds up 7.6% (annualized) over period
– Tweedy outperformed in NNA equities – deep value style during turbulent four-year
period
– JF outperformed in NNA equities – bias to mega cap names and global industry
leaders
– Asset mix: overweight bonds during the market crash of 2008
08700/Academic/003/JAJ.ppt-336-J9-29575 Nov 2011
7
Summary Returns—Periods Ending September 30
Quarter
Return % Quartile
Total Fund
Benchmark
Yr-to-Date
Return % Quartile
Year
Return % Quartile
4-Year
Return % Quartile
-3.9
-4.5
1
1
-0.7
-2.6
1
1
2.2
1.0
1
2
1.8
0.2
1
4
JF - Balanced Fund
Benchmark
-10.8
-10.5
4
4
-7.4
-9.3
4
4
-1.8
-2.8
3
4
-2.1
-3.6
4
4
Canadian Equities
Jarislowsky Fraser - Large Cap
-12.8
-13.2
2
2
-10.9
-11.4
1
2
-4.5
-5.1
2
3
-1.0
-1.2
1
1
S&P/TSX Capped Composite
-12.0
1
-11.9
2
-3.6
2
-1.9
2
-7.4
1
-4.3
1
5.8
1
2.8
1
-14.9
3
-18.4
4
-2.3
3
0.3
2
Canadian Small Cap Equities
JF - Special Equity Fund
BMO SC
Blue
08700/Academic/003/JAJ.ppt-336-J9-29575 Nov 2011
numbers indicate manager equaled or exceeded the index.
8
Summary Returns—Periods Ending September 30
Quarter
Return % Quartile
U.S. Equities
Jarislowsky Fraser
BlackRock (passive)
Yr-to-Date
Return % Quartile
Year
Return % Quartile
4-Year
Return % Quartile
-7.5
-8.0
-7.0
1
2
1
-4.5
-4.9
-4.2
1
2
1
2.3
1.7
2.8
2
2
1
-3.8
-3.4
-4.0
2
2
M
-7.0
1
-4.2
1
2.7
1
-4.0
M
-9.7
-10.3
-9.1
-8.2
1
1
1
1
-3.6
-3.4
-3.8
-3.4
1
1
1
1
-0.2
-0.3
-0.1
-0.1
1
1
1
1
-3.6
-4.5
-2.6
-2.0
1
1
1
1
-12.6
2
-10.8
2
-7.9
3
-8.4
3
Bonds
BlackRock (passive)
5.1
5.1
1
1
7.5
7.5
1
1
6.6
6.6
1
1
7.2
7.2
3
3
DEX Universe Bonds
5.1
1
7.4
1
6.7
1
7.2
3
S&P 500
Non-North American Equities
Jarislowsky Fraser
Tweedy Browne - Equities
Tweedy Browne - Total Fund
MSCI EAFE
Blue numbers indicate manager equaled or exceeded the index.
08700/Academic/003/JAJ.ppt-336-J9-29575 Nov 2011
9
Plan Structure By Asset Class
Asset Class
Equities
Canadian equities
U.S. equities
Non-North American equities
Total Foreign Equities
Total Equities
Fixed Income
Bonds
Short-term investments
Total Fixed Income
Total Fund
08700/Academic/003/JAJ.ppt-336-J9-29575 Nov 2011
December 31, 2010
Market Value
$000s
Percent
September 30, 2011
Market Value
$000s
Percent
Policy Asset Mix %
Min Benchmark Max
27,910
31,498
28,768
60,265
88,176
19.0
21.4
19.6
41.0
60.0
23,088
29,185
26,921
56,106
79,194
16.3
20.7
19.1
39.7
56.1
15.0
15.0
15.0
30.0
50.0
20.0
20.0
20.0
40.0
60.0
26.0
26.0
26.0
52.0
70.0
55,937
2,774
58,712
38.1
1.9
40.0
60,105
1,956
62,061
42.6
1.4
43.9
30.0
0.0
39.0
1.0
40.0
45.0
5.0
146,887
100.0
141,255
100.0
10
100.0
Plan Structure By Manager
Manager
December 31, 2010
Market Value
$000s
Percent
September 30, 2011
Market Value
$000s
Percent
Policy Asset Mix %
Min
Target
Max
Balanced Manager
Jarislowsky Fraser
58,467
39.8
49,927
35.3
35.0
41.0
50.0
Non-North American Manager
Tweedy Browne
16,168
11.0
15,604
11.0
7.0
10.0
13.0
Index Manager
BlackRock - U.S.
BlackRock - Bonds
16,290
55,937
11.1
38.1
15,604
60,105
11.0
42.6
7.0
30.0
10.0
39.0
13.0
45.0
Operating Account
Operating Account
25
0.0
15
0.0
146,887
100.0
141,255
100.0
Total Fund
08700/Academic/003/JAJ.ppt-336-J9-29575 Nov 2011
11
100.0
1999 Academic Pension Plan AGM
Questions ?
08700/Academic/003/JAJ.ppt-336-J9-29575 Nov 2011
12