Queen’s Pension Plan
Annual General Meeting
December 6, 2013
Agenda
•
•
•
•
•
•
•
•
•
•
•
Members of Queen’s Pension Committee
Summary of Pension Plan Membership
Pension Plan Asset Reconciliation
Summary of Plan Assets at August 31, 2013
Integrated Private Debt
Returns Compared to Benchmark and BNY Mellon’s Universe
Returns Compared to Other Canadian University Pension Plans
True vs. Paid Pensions
Financial Position of Queen’s Pension Plan – Going Concern Basis
Financial Position of Queen’s Pension Plan – Wind-Up/ Solvency Basis
Questions
2
Members of Queen’s Pension Committee
• Appointed by Members
o James MacKinnon
o Bill Cannon
o Peggy Hauschildt
o Jonathan MacDonell
o Alison Morgan
o John Gordon
• Ex Officio
o David Dodge
o Daniel Woolf
o Barbara Palk
o Caroline Davis
o Al Orth
• Appointed by Board of Trustees
o David Grace
o Don Raymond
o Peter Copestake
o Kathryn Bush
o Jill Wagman
3
Summary of Pension Plan Membership
At August 31, 2011
New entrants
Active
Retired
Deferred
Total
3,611
1,867
1,545
7,023
525
525
Terminations
o
Transfers/lump sum
o
Deferred pensions
Deaths
(67)
(61)
(251)
251
(9)
(102)
(5)
(184)
245
(61)
(128)
(116)
Retirements
o
Pension option
o
Lump sum
(15)
Beneficiaries
Other
At August 31, 2013
39
34
3,644
2,049
(21)
(36)
1
40
(11)
23
1,638
7,331
4
Pension Plan Asset Reconciliation ($000’s)
September 1, 2012
$
1,358,102
PLUS
Members’ DC contributions
University’s DC contributions
University’s Minimum Guarantee contributions
University’s Past Service contributions
Voluntary contributions
Past Service contributions
Transfers from other plans
Investment return
18,689
18,210
4,796
14,577
1,462
10
1,129
202,603
LESS
Pensions paid
Lump-sums paid
Administration fees
(77,754)
(7,777)
(6,474)
August 31, 2013
Gross rate of return
Rate of return net of expenses
$ 1,527,573
15.09%
14.55%
5
Summary of Pension Plan Assets at October 31, 2013
Canadian
Equity
Global
Equity
Fixed
Income
Percent of
Total Assets
Burgundy
$166,792
10.4%
Guardian
$77,354
4.8%
Connor, Clark, & Lunn
$80,061
5.0%
TD Asset Management
$53,404
3.3%
Letko, Brosseau
$107,704
$86,460
$99,723
18.3%
Manning & Napier
$144,489
9.0%
Orbis
$159,342
9.9%
State Street Global Advisors
$148,242
9.2%
Beutel Goodman
$171,376
10.7%
PIMCO
$203,011
12.6%
Integrated Private Debt
$102,386
6.4%
36.2%
100.0%
% of Total Assets
30.2%
33.6%
6
Asset Manager Presentation
Integrated Private Debt Corp.
Canada’s Leading Independent Private Debt Manager
7
Integrated Private Debt: Corporate Profile
•
Integrated Private Debt Corp. is Canada’s leading independent provider of investment grade
corporate debt and has been originating and managing private debt investments for
institutional investors since 1987
•
In addition to providing an alternative source of debt financing for mid-market Canadian
companies, IPD offers investors an attractive yield, diversification and low volatility
•
Since its inception, IPD has originated, underwritten and managed more than $2.5 billion in
private placement loans
•
In October 2013, IPD closed its 4th private corporate debt fund raising $387 million
8
What is Private Debt?




Senior ranked private placement debt of investment grade mid-market companies
Fixed interest rate and fixed term to maturity (terms up to 10 years)
Secured by first charge on key operating and economic assets of the borrower
Custom designed loans to meet unique borrowing requirements
•
The uses of private debt are broad and diverse, including debt financing for company
expansion, capital projects and acquisition financing
•
For investors, an investment in a private debt funds represent an attractive source of
diversification and current monthly income, with returns above the benchmark at a lower
level of volatility
9
Sample Transactions
Midland Transport Limited
Maple Leaf Foods Inc.
$30,000,000
$15,000,000
High Liner Foods Incorporated
$53,600,000
Senior Secured Term Loan
Senior Secured Term Loan
Participation in
$140,000,000 Senior Notes
10 year interest only
The Halifax Herald Limited
Brampton Brick Limited
$18,000,000
Senior Secured Term Debt
Great Canadian Railtour Company
$30,000,000
$45,000,000
Senior Secured Term Loan
Senior Secured Term Loan
10
Integrated Private Debt - Investment Performance
November 30, 2013
Fund I
Fund II
Fund III
1 year
4.00%
2.81%
3 years
6.34%
6.71%
5 years
6.00%
7.22%
Since Inception
6.81%
7.36%
8.26%
Since Inception
DEX Universe
4.65%
4.28%
Base Interest Rate
6.48%
6.68%
Fund IV
Composite
DEX
Universe
2.79%
3.68%
-0.91%
8.26%
7.27%
4.13%
7.05%
5.47%
3.32%
7.45%
4.65%
4.13%
0.81%
4.65%
6.19%
6.22%
11
QPP Returns Compared to Benchmark &
BNY Mellon’s Universe of Canadian Pension Plans
• At September 30th, 2013:
3 Months
1 Year
4 Years
10 Years
Queen’s
4.5%
15.2%
8.6%
7.5%
Benchmark
3.5%
8.6%
6.7%
6.4%
BNY 1st quartile
4.1%
12.7%
8.6%
7.5%
BNY Median
3.3%
10.8%
7.9%
6.9%
BNY 3rd quartile
2.6%
7.7%
7.2%
6.6%
12
QPP Returns Compared to
Other Canadian University Pension Plans
• CAUBO survey results, as at December 31, 2012:
1 year 2 years 4 years 10 years
Queen’s
10.5%
4.6%
9.4%
7.1%
Assets > $500M
10.0%
5.8%
9.2%
6.9%
Assets $150M-$500M
9.6%
5.1%
8.7%
6.7%
Assets $30M-$150M
8.7%
3.8%
7.9%
6.4%
All Equally Weighted
9.3%
5.2%
8.6%
6.7%
All Dollar Weighted
9.9%
5.6%
8.7%
6.2%
13
True vs. Paid Pensions
Base monthly pension through Aug 31/05:
Current year return (as at August 31, 2013):
$2,603.29
14.5535%
Going forward:
10%
Plan Year
Fund Return
Excess Interest (EI)
True Pension + EI
% Relative To:
2005-06
8.9472%
5.8389%
$2,755.29
105.8%
2006-07
11.7023%
6.5100%
$2,934.66
112.7%
"
"
2007-08
-4.3700%
2.2266%
$3,000.00
115.2%
"
"
2008-09
-7.8877%
-4.2469%
$2,872.59
95.8%
of $3,000 (paid) pension
2009-10
6.8470%
-4.7409%
$2,736.41
91.2%
of $3,000 (paid) pension
2010-11
6.3370%
-5.9794%
$2,572.79
85.8%
of $3,000 (paid) pension
2011-12
5.5286%
-3.4859%
$2,483.10
82.8%
of $3,000 (paid) pension
2012-13
14.5535%
2.2571%
$2,539.15
84.6%
of $3,000 (paid) pension
2013-14
10.0000%
3.0470%
$2,616.52
87.2%
of $3,000 (paid) pension
2014-15
10.0000%
3.9742%
$2,720.50
90.7%
of $3,000 (paid) pension
2015-16
10.0000%
5.1211%
$2,859.82
95.3%
of $3,000 (paid) pension
2016-17
10.0000%
4.0000%
$2,974.22
99.1%
of $3,000 (paid) pension
2017-18
10.0000%
4.0000%
$3,093.18
103.1%
of Aug/08 pension
2018-19
10.0000%
4.0000%
$3,216.91
107.2%
"
"
2019-20
10.0000%
4.0000%
$3,345.59
111.5%
"
"
2020-21
10.0000%
4.0000%
$3,479.41
116.0%
"
"
True pension
of Aug/05 pension
14
Financial Position of Queen’s Pension Plan:
Going Concern Basis ($000’s)
Assets
Market value of assets
Smoothing adjustment
Net assets at market value
August 31, 2011
August 31, 2012 (est.)
$1,315,319
$19,686
$1,335,005
$1,358,102
($484)
$1,357,618
Liabilities
Market value of:
- DC accounts
- Past service accounts
- Voluntary accounts
Present value of accrued benefits:
- Active members
- Pensioners/survivors
Total liabilities
$593,045
$24,908
$37,047
$650,386
$26,284
$39,094
$55,646
$750,770
$1,461,416
$77,888
$731,424
$1,525,076
Surplus (deficit)
($126,411)
($167,458)
15
Financial Position of Queen’s Pension Plan:
Wind-Up/Solvency Basis ($000’s)
Assets
Market value of assets
Termination expense
Net assets at market value
August 31, 2011
August 31, 2012 (est.)
$1,315,319
($2,000)
$1,313,319
$1,358,102
($2,000)
$1,356,102
Liabilities
Market value of:
- DC accounts
- Past service accounts
- Voluntary accounts
Present value of accrued benefits:
- Active members
- Pensioners/survivors
Total liabilities
$593,045
$24,908
$37,047
$650,386
$26,284
$39,094
$112,509
$878,079
$1,645,588
$203,091
$896,003
$1,814,858
Surplus (deficit)
($332,269)
($458,756)
16
Thank You
Questions?
17