Queen’s Pension Plan
Annual General Meeting
December 4, 2015
Agenda
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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
Historical Employee and Employer Contributions
Pension Plan Asset Reconciliation
University Pension Project Update
Summary of Plan Assets at August 31, 2015
Returns Compared to Benchmark and BNY Mellon’s Universe
Returns Compared to Other Canadian University Pension Plans
Manager Presentation: Burgundy Asset Management
Questions
2
Members of Queen’s Pension Committee
• Appointed by Members
o James MacKinnon
o Bill Cannon
o Peggy Hauschildt
o Alison Morgan
o Lewis Johnson
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, 2014
Active
Deferred
3,722
1,668
Pensioners
and Survivors
2,128
Total
7,518
New entrants
Return to active status
Marriage breakdowns
Terminations
223
11
o
Transfers/lump sum
(45)
(52)
(97)
o
Deferred pensions
(146)
146
-
(9)
-
(67)
(76)
(98)
(24)
122
-
(8)
-
-
(8)
-
-
-
-
3,650
1,738
2,186
7,574
Deaths
3
223
11
3
Retirements
o
Pension option
o
Lump sum
New beneficiaries
Other
At August 31, 2015
4
True vs. Paid Pensions (projecting at 6%)
Base monthly pension through Aug31/07:
$2,934.66
Current year return (as at August 31, 2015):
2.7682%
Going forward:
6%
Plan Year
Fund return
Excess interest (EI)
True pension + EI
2007-08
-4.3700%
2.2266%
$3,000.00
2008-09
-7.8877%
-4.2469%
$2,872.60
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
17.7093%
4.9094%
$2,663.81
88.8%
of $3,000 (paid) pension
2014-15
2.7682%
3.9669%
$2,769.48
92.3%
of $3,000 (paid) pension
2015-16
6.0000%
4.0895%
$2,882.74
96.1%
of $3,000 (paid) pension
2016-17
6.0000%
1.9743%
$2,939.65
98.0%
of $3,000 (paid) pension
2017-18
6.0000%
-0.8174%
$2,915.62
97.2%
of $3,000 (paid) pension
2018-19
6.0000%
0.0000%
$2,915.62
97.2%
of $3,000 (paid) pension
True pension
Paid pension
5
True vs. Paid Pensions (projecting at 8%)
Base monthly pension through Aug31/07:
$2,934.66
Current year return (as at August 31, 2015):
2.7682%
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
2.7682%
3.9669%
2015-16
8.0000%
4.6052%
2016-17
8.0000%
2.9881%
2017-18
8.0000%
0.6676%
2018-19
8.0000%
2.0000%
Going forward:
8%
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
$2,769.48
92.3%
of $3,000 (paid) pension
$2,897.02
96.6%
of $3,000 (paid) pension
$2,983.58
99.5%
of $3,000 (paid) pension
$3,003.50
100.0%
of $3,003.50 (paid) pension
$3,063.57
100.0%
of $3,063.57 (paid) pension
True pension
Paid pension
6
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, 2014
$1,315,319
$19,686
$1,335,005
$1,765,373
($98,609)
$1,666,764
$593,045
$24,908
$37,047
$778,794
$25,874
$41,532
$55,646
$750,770
Liabilities
Market value of:
- DC accounts
- Past service accounts
- Voluntary accounts
Present value of accrued benefits:
- Active members
- Pensioners/survivors
- Non-Reduction Reserve
Total liabilities
$1,461,416
$66,263
$873,151
$56,755
$1,842,369
Surplus (deficit)
($126,411)
($175,605)
7
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, 2014
$1,315,319
($2,000)
$1,313,319
$1,765,373
($2,000)
$1,763,373
$593,045
$24,908
$37,047
$778,794
$25,874
$41,532
$112,509
$878,079
Liabilities
Market value of:
- DC accounts
- Past service accounts
- Voluntary accounts
Present value of accrued benefits:
- Active members
- Pensioners/survivors
- Deferred Indexing Reserve
Total liabilities
$1,645,588
$129,182
$1,073,366
$20,436
$2,069,184
Surplus (deficit)
($332,269)
($305,811)
8
Historical Employee and Employer
Contributions
Employee Money
Plan-year ending
Purchase
Contributions
Employer Money Purchase
Contributions + Current
Service Cost (Minimum
Guarantee)
Employer Special
Payments
(Going Concern)
August 31, 2016
August 31, 2015
$23,218,000
$22,372,532
$24,760,000
$23,929,160
$20,716,000
$15,048,990
August 31, 2014
August 31, 2013
August 31, 2012
August 31, 2011
August 31, 2010
August 31, 2009
August 31, 2008
August 31, 2007
August 31, 2006
August 31, 2005
August 31, 2004
$21,754,562
$18,689,080
$15,062,572
$13,557,562
$13,883,399
$12,975,638
$12,423,090
$11,489,632
$10,710,705
$10,049,206
$9,393,765
$23,528,441
$23,005,776
$23,168,013
$22,112,862
$21,863,095
$24,404,559
$23,838,676
$20,662,343
$17,458,416
$18,072,437
$12,016,807
$15,122,154
$14,577,212
$12,567,901
$5,610,469
$5,610,469
$2,434,387
$0
$0
$0
$0
$0
Est.
9
Pension Plan Asset Reconciliation ($000’s)
September 1, 2014
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
LESS
Pensions paid
Lump-sums paid
Administration fees
August 31, 2015
Gross rate of return
Rate of return net of expenses
$
1,766,123
22,373
18,707
5,637
14,634
1,297
7
1,593
53,883
(83,406)
(11,576)
(5,254)
$ 1,784,018
3.25%
2.77%
10
University Pension Project Update
•
Sector Jointly Sponsored Pension Plan
•
Solvency Funding Exemption
•
Mediated Governance and Design Sessions
11
Summary of Pension Plan Assets (‘000)
at October 31, 2015
Burgundy
Guardian
Connor, Clark, & Lunn
TD Asset Management
Letko, Brosseau
Manning & Napier
Orbis
State Street
Connor, Clark, & Lunn
PIMCO
TD Asset Management
Integrated Private Debt
Real Estate – Oxford
Infrastructure - Borealis
Cash/FX Hedging
Total Assets
% of Total Assets
Canadian
Equity
$149,124
$78,628
$83,768
$3,534
$51,648
Global
Equity
$88,350
$180,331
$196,572
$187,786
Total
Assets
$149,124
$78,628
Percent of
Total
Assets
8.3%
4.4%
$83,768
$3,534
$211,593
$180,331
$196,572
$187,786
4.7%
0.2%
11.8%
10.0%
10.9%
10.4%
$131,355
$144,399
$131,355
$144,399
7.3%
8.0%
$135,406
$103,188
$135,406
$103,188
$89,369
$94,409
$9,002
$1,798,660
100%
7.5%
5.7%
5.0%
5.2%
0.5%
100.0%
100.0%
Fixed
Income
Real
Estate
Infrastructure
$71,595
$89,369
$94,409
$336,702
20.4%
$653,237
36.3%
$585,943
32.6%
$89,369
5.0%
$94,409
5.2%
12
QPP Returns Compared to Benchmark &
BNY Mellon’s Universe of Canadian Pension Plans
• At September 30th, 2015:
3 Months
1 Year
4 Years
10 Years
Queen’s
-3.7%
2.6%
10.9%
6.1%
Benchmark
-2.7%
6.3%
9.9%
5.8%
BNY 1st quartile
-1.0%
7.8%
11.7%
6.8%
BNY Median
-2.0%
5.9%
10.8%
6.3%
BNY 3rd quartile
-2.7%
4.0%
9.9%
5.9%
13
QPP Returns Compared to
Other Canadian University Pension Plans
• CAUBO survey results, as at December 31, 2014:
1 year 2 years 4 years 10 years
Queen’s
8.5%
13.8%
9.2%
7.0%
Assets > $500M*
11.5%
13.4%
9.5%
7.1%
Assets $150M-$500M*
10.1%
12.6%
8.7%
6.8%
Assets $30M-$150M*
10.4%
12.8%
8.5%
6.9%
All Plans Equally Weighted
10.8%
12.9%
9.0%
6.9%
All Plans Dollar Weighted
11.8%
13.5%
9.1%
6.5%
* Equally weighted average
14
Thank You
Questions?
15