2000 Academic Money Purchase Pension Plan Update to Plan Participants

2000 Academic Money Purchase Pension Plan
Update to Plan Participants
July 31, 2014
International Equity Fund – Investment Manager Change
Presently the funds in the International Equity Fund of the Academic Money Purchase Pension Plan are managed
by Sky Investment Counsel (Sky) though a subsidiary arrangement with Phillips, Hager and North Investment
Management Company. Effective August 13, 2014, the funds will be managed by Mawer Investment
Management Company (Mawer). This newsletter sets out the reasons for these actions.
In the past year the Committee has become increasingly concerned with the underperformance of Sky. Over the
past five years, the average annual return on its managed funds net of fees has been less than the performance
benchmark and the volatility of returns has been higher than average. In light of this poor performance the
Committee decided to conduct an investment manager search for a possible replacement for Sky.
AONHewitt was engaged to create a list of potential replacements and the Committee interviewed principals of
three firms in June. On the basis of these interviews and reports prepared by the investment consultant, the
Committee recommended to the Board that Mawer replace the existing manager. The Board accepted this
recommendation on July 29, 2014.
Over the past ten years, the performance of Mawer in managing an international equity mandate has consistently
exceeded the performance benchmark net of fees by a significant margin while simultaneously producing below
average volatility of returns. For example, over four, seven and ten year periods, the annual excess return over the
benchmark has been 3.1%, 4.4% and 4.3%, respectively. This outperformance has occurred in both expansionary
and contractionary phases of the market cycle. The Committee is of the view that the management structures and
investment processes of Mawer are stable enough to continue to generate these desirable outcomes into the future.
Since the International Equity Fund is a component of all three life-cycle funds, Conservative, Balanced and
Aggressive, it follows that to the extent that you have allocated your pension funds to any of the life-cycle funds or
directly to the International Equity Fund, your pension funds will be managed in part by Mawer by August 13,
2014 automatically without any action required on your part.
If you have any questions about the replacement of the manager for the International Equity Fund, please contact
the Director of Pensions, Heather Fortosky, at 966-6276 or contact any of the AMPPC members listed below.
A. Mamun (Finance and Management Science)
A. Pollak (Economics)
G. Tannous (Finance and Management Science)
L. Kennedy, Chair (Financial Services)
M. Sander (Financial Services)
J. Traves (Advancement)
This communication, future communications and other pension plan information are available online at: