Queen’s Pension Plan Annual General Meeting December 5, 2014 Agenda • • • • • • • • • • • Members of Queen’s Pension Committee Summary of Pension Plan Membership 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 Pension Plan Asset Reconciliation Summary of Plan Assets at August 31, 2014 Returns Compared to Benchmark and BNY Mellon’s Universe Returns Compared to Other Canadian University Pension Plans Manager Presentation: Orbis Investment Advisory (Canada) Questions 2 Members of Queen’s Pension Committee • Appointed by Members o James MacKinnon o Bill Cannon o Peggy Hauschildt o Alison Morgan o John Gordon o Kelly Sedore • Ex Officio o Daniel Woolf o Barbara Palk o Caroline Davis o Al Orth o Jim Leech • 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, 2013 Active Deferred 3,644 1,638 Pensioners and Survivors 2,049 New entrants Return to active status Marriage breakdowns Terminations 354 8 o Transfers/lump sum (44) (48) o Deferred pensions (134) 134 (5) (3) (64) (98) (29) 127 (3) (13) Deaths (3) 1 Total 7,331 354 5 1 (92) (72) Retirements o Pension option o Lump sum New beneficiaries Other At August 31, 2014 3,722 (16) 2 19 21 (10) (4) (14) 1,668 2,128 7,518 4 True vs. Paid Pensions Base monthly pension through Aug31/07: $2,934.66 Current year return (as at August 31, 2014): 17.7093% Plan Year Fund return Excess interest (EI) 2007-08 -4.3700% 2.2266% 2008-09 -7.8877% -4.2469% 2009-10 6.8470% -4.7409% 2010-11 6.3370% -5.9794% 2011-12 5.5286% -3.4859% 2012-13 14.5535% 2.2571% 2013-14 17.7093% 4.9094% 2014-15 6.0000% 4.8214% 2015-16 6.0000% 4.9450% 2016-17 6.0000% 2.8133% Going forward: 6% True pension + EI $3,000.00 $2,872.60 95.8% of $3,000 (paid) pension $2,736.41 91.2% of $3,000 (paid) pension $2,572.79 85.8% of $3,000 (paid) pension $2,483.10 82.8% of $3,000 (paid) pension $2,539.15 84.6% of $3,000 (paid) pension $2,663.81 88.8% of $3,000 (paid) pension $2,792.24 93.1% of $3,000 (paid) pension $2,930.32 97.7% of $3,000 (paid) pension $3,012.76 100.4% of $3,000 (paid) pension True pension Paid pension 5 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, 2013 (est.) $1,315,319 $19,686 $1,335,005 $1,527,573 ($43,815) $1,483,758 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 $676,481 $24,879 $38,940 $55,646 $750,770 $1,461,416 $70,901 $817,169 $1,628,370 Surplus (deficit) ($126,411) ($144,612) 6 Financial Position of Queen’s Pension Plan: Solvency Basis ($000’s) Assets Market value of assets Termination expense Net assets at market value August 31, 2011 August 31, 2013 (est.) $1,315,319 ($2,000) $1,313,319 $1,527,573 ($2,000) $1,525,573 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 $676,481 $24,879 $38,940 $112,509 $878,079 $1,645,588 $123,042 $954,017 $1,817,359 Surplus (deficit) ($332,269) ($291,786) 7 Pension Plan Asset Reconciliation ($000’s) September 1, 2013 $ 1,527,573 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 21,754 18,599 4,930 15,122 1,309 82 1,262 277,106 LESS Pensions paid Lump-sums paid Administration fees (80,297) (12,690) (8,627) August 31, 2014 Gross rate of return Rate of return net of expenses $ 1,766,123 18.33% 17.71% 8 Summary of Pension Plan Assets at October 31, 2014 Canadian Equity Global Equity Fixed Income Real Estate Infrastructure Total Assets Percent of Total Assets Burgundy $166,754 $166,754 9.4% Guardian $82,347 $82,347 4.8% Connor, Clark, & Lunn $84,841 $84,841 4.9% TD Asset Management $3,704 $3,704 0.2% Letko, Brosseau $56,414 $213,592 12.4% $83,692 $73,486 Manning & Napier $166,106 $166,106 9.6% Orbis State Street Global Advisors $183,758 $183,758 10.6% $175,039 $175,039 10.1% Beutel Goodman $176,364 $176,364 10.2% PIMCO $208,480 $208,480 12.1% Integrated Private Debt $101,114 $101,114 5.9% $82,162 4.8% $84,490 $84,490 4.9% Real Estate – Oxford $82,162 Infrastructure - Borealis Total Assets % of Total Assets $394,060 $608,595 $559,444 $82,162 $84,490 $1,728,751 100.0% 22.6% 35.2% 32.5% 4.8% 4.9% 100% 100.0% 9 QPP Returns Compared to Benchmark & BNY Mellon’s Universe of Canadian Pension Plans • At September 30th, 2014: 3 Months 1 Year 4 Years 10 Years Queen’s 0.3% 14.3% 10.1% 7.6% Benchmark 1.7% 15.4% 8.6% 6.8% BNY 1st quartile 1.7% 16.2% 10.5% 7.7% BNY Median 1.3% 15.0% 9.6% 7.2% BNY 3rd quartile 0.8% 13.6% 8.8% 6.9% 10 QPP Returns Compared to Other Canadian University Pension Plans • CAUBO survey results, as at December 31, 2013: 1 year 2 years 4 years 10 years Queen’s 19.4% 14.9% 9.6% 7.3% Assets > $500M 15.2% 12.6% 9.2% 7.0% Assets $150M-$500M 15.1% 12.3% 8.6% 6.9% Assets $30M-$150M 16.0% 12.3% 8.4% 6.6% All Equally Weighted 15.1% 12.2% 8.8% 6.9% All Dollar Weighted 15.1% 12.4% 8.8% 6.3% 11 Thank You Questions? 12