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• OPTrust becomes a signatory to the United Nations Principles for Responsible Investment
• 2009 Annual Highlights
• Green initiative: OPTrust joins the Carbon Disclosure Project
• Did you know?
• OPSEU appoints new Trustee
• You Asked…
• Thinking of returning to work? What you need to know about re-employment
• Your online resources
• Funding update: full 3% member contribution increase needed
• Facts about…Your pension beneficiaries








Inside: 2009 Annual Highlights Want to know how your pension plan is addressing the funding impact of our 2008 investment loss? Interested in how OPTrust is building security for the long term? Looking for the latest OPTrust’s investment performance? Just turn to the special pullout section inside this newsletter to read the 2009 Annual Highlights Report for Pensioners. There you’ll find key statistics on the financial performance of the OPSEU Pension Plan and news on how we serve you and our 82,000 other members and retirees.   Brian Howard, OPTrust Retiree, Ministry of Community Safety and Correctional Services   Return to top of page OPTrust becomes a signatory to the United Nations Principles for Responsible Investment In May 2010, OPTrust became a signatory to the United Nations Principles for Responsible Investment (PRI). The PRI is an investor initiative in partnership with the United Nations Environment Program Finance Initiative and the UN Global Compact with more than 700 signatories worldwide and representing US $20 trillion in invested assets. At OPTrust, we recognize that environmental, social and governance (ESG) issues have the potential to affect the performance of the Plan’s investment portfolios. Taking steps to address these issues in our investment operations is not just the right thing to do – it’s also good business. Signing the PRI is consistent with and in support of OPTrust’s Statement of Responsible Investing Principles (SRIP) which was adopted in March 2009. This gives OPTrust access to information and resources we can use to develop better tools for analyzing investment decisions from an ESG perspective. It also connects us with a global network of organizations that we can share ideas with, learn from, and work with on specific ESG issues and initiatives. “Signing the PRI represents an important step in OPTrust’s continuing commitment to integrating environmental, social and corporate governance considerations into its investment activities,” says Morgan Eastman, Chief Investment Officer of OPTrust. “This commitment is based on the recognition that ESG issues have the potential to affect the performance of OPTrust’s investment portfolios over the long term. Taking appropriate steps to address potential risks in these areas is therefore consistent with OPTrust’s fiduciary duty to plan members, retirees and sponsors,” adds Eastman. “We are delighted that OPTrust has signed the PRI,” states James Gifford, Executive Director, PRI. “This continues the strong momentum within responsible investment post crisis. OPTrust’s participation will add greatly to the PRI’s Canadian activities and it has a lot to offer in terms of integration of ESG issues and active ownership within mainstream pension management.” Integrating responsible investment practices into the way we manage the fund is consistent with our fiduciary duty and reflects the best long-term interests of our more than 82,000 members and pensioners and our sponsors. Responsible investment The UN Principles on Responsible Investment sets out six broad objectives and identifies a range of possible actions that signatories may take to incorporate ESG issues into their investment activities. The principles provide a framework for extending OPTrust’s work in this area. Plans are already in progress to: strengthen OPTrust’s policies regarding environmental, social and governance concerns. This includes the recent adoption of a statement on responsible investment, which will provide a point of reference for ongoing discussion with our external investment managers work with our investment managers to integrate ESG factors into their investment analyses and decisions and the criteria used to evaluate their performance review our proxy voting guidelines to ensure they address current and emerging issues, including responsible investment criteria identify further opportunities to work together with other investors and stakeholders on ESG issues expand our ESG program beyond our public market investments and identify opportunities to integrate ESG factors into decisions regarding OPTrust’s real estate, private equity and infrastructure portfolios. As a signatory to the PRI, OPTrust has made a modest voluntary contribution to support the work of the PRI secretariat. In return, as a signatory, we gain access to resources we can use in developing and implementing OPTrust’s ESG program, and a global network of organizations with whom we can share information and work together on corporate governance and responsible investment issues. Return to top of page Green initiative: OPTrust joins the Carbon Disclosure Project In 2010, as part of OPTrust’s continuing commitment to responsible investing and to managing the long-term financial risks associated with environmental, social and governance issues, we signed onto the Carbon Disclosure Project (CDP). The CDP conducts an annual survey, requesting thousands of the world’s largest companies to disclose their greenhouse gas emissions and climate change strategies on behalf of the world’s leading asset owners and investment firms. This data provides valuable insight to investors like OPTrust who use it to evaluate investment risks and opportunities related to climate change. There is a growing awareness among large investors that climate change has the potential to impact the long-term financial performance of companies and even the efficient functioning of global markets. Indeed, the Intergovernmental Panel on Climate Change (IPCC) predicts that “future climate impacts show that the consequences could vary from disruptive to catastrophic”. By collecting and presenting the carbon emissions strategies of companies along with emissions data, the CDP provides investors with a clear understanding of how companies are positioned as we move towards a low carbon economy. Signing the CDP is consistent with OPTrust’s Statement of Responsible Investing Principles and is an example of our commitment to the United Nations Principles for Responsible Investing. OPTrust joins over 500 institutional investors with a combined $64 trillion in assets under management who believe that a first step in managing investment risk related to carbon emissions is transparency from the companies in which we invest. By signing onto the CDP, OPTrust obtains exclusive access to CDP responses through a dedicated database and reports that will assist us in our ongoing initiatives to integrate ESG considerations into investment decision making processes and in our potential engagement activities. OPTrust will continue to keep you informed of other areas where we have an impact on environmental, social and governance issues. In the meantime, you can learn more about OPTrust’s governance program on our website or in the full annual report.

Return to top of page Did you know? OPTrust’s pensioner population has grown to 25,000 retirees since the OPSEU Pension Plan’s inception 15 years ago. Return to top of page

OPSEU appoints new Trustee OPSEU appointed Dennis Wilson to the OPTrust Board of Trustees for a three-year term in April 2010. During his Ontario Public Service career spanning nearly 30 years, Wilson has worked for the Ministries of Natural Resources, Northern Development and Mines, and Labour. He is currently an Industrial Health and Safety Inspector with the Ministry of Labour. Wilson’s union activities have included Steward, Local President, Executive Board Member, Ministry Employee Relations Committee (MERC) Team Member, and positions on several bargaining teams.  “When I started working in the OPS, unclassified employees did not have the option to join the pension plan. OPSEU lobbied for and secured the right for unclassified staff to become plan members,” says Wilson. “I’ve always recognized the value of a strong pension, and this issue has become increasingly important to me as I approach my own retirement.”

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Question: I have switched banks. How do I update my new account with OPTrust? Answer: You must provide us with a void cheque for your new financial institution or bank account. You may also update your banking information online by registering for OPTrust’s secure Online Services. We cannot accept bank account changes over the telephone or by e-mail. Question: I’ve recently moved. How do I update my mailing address? Answer: It’s important to provide OPTrust with your new mailing address. You can update your mailing address through OPTrust’s secure Online Services, once you are registered. If you receive your pension by direct deposit, you can contact OPTrust at 416-681-6100 or 1-800-637-0024 to update your address. If you receive your pension by cheque, you must complete a Personal Information Change Request form. Question: Where can I get a copy of the dental claim form? Answer: You can download the dental and medical claim forms from the OPTrust website or from the Great-West Life website at www.greatwestlife.com. Send your completed forms to: Great-West Life Toronto Benefit Payments P.O. Box 4076, Station A Toronto, ON M5W 3A3 You can also sign up for Great-West Life’s online GroupNet service, where you can sign up for direct deposit and track your claim submissions. For more information, contact Great-West Life at 1-800-957-9777 or 416-440-0406. Question: I’m planning to travel to Europe this fall. Is there out of country travel insurance with my insured benefits coverage? Answer: If you are a full-time resident in another province or country, and are eligible for benefits, your Great-West Life benefits will continue. However, re-imbursements are based on what is customarily paid in Ontario.Within certain limits your coverage will top up expenses the Ontario Health Insurance Plan (OHIP) does not cover. There is no emergency coverage if you travel out of the country. You may want to purchase medical travel insurance.     Return to top of page Thinking of returning to work? What you need to know about re-employment During your retirement years, you may decide to pursue full or part-time work. If you’re thinking of seeking a new opportunity or working part-time for your former employer, you’ll need to know how your pension may be affected. If you work for an employer who does not contribute to the Plan, your pension is not affected. If you are re-employed or engaged by an employer who contributes to the Plan, the impact on your pension depends on your salary and whether or not you re-join the Plan. It is your responsibility to inform a participating employer that you are currently receiving a pension from OPTrust. Without Plan membership Your monthly pension is subject to an earnings ceiling each calendar quarter (e.g. January – March), if you are i) re-employed or engaged by an employer who contributes to the OPSEU Pension Plan, and ii) if you do not re-join the Plan as a contributing member. Your re-employment earnings maximum is determined by subtracting your quarterly pension income from your final quarterly pre-retirement earnings. The amount left over is the maximum amount you can earn in a calendar quarter from re-employment before we reduce your pension. This amount is provided on your confirmation statement from OPTrust and your Pensioner Information Change Statement. With membership Depending on your re-employment and your age, you may have the option to re-join the Plan. If you re-join, your pension stops immediately. While you are making contributions to the Plan, you are accruing additional pension credit so when your employment ends, we will re-calculate your pension. OPTrust will add the additional credit you earned during your re-employment to your previous credit (whether you retired under the Factor 80, Factor 90 or 60/20 provisions or at age 65). OPTrust then re-calculates your pension at the end of your re-employment period to include the additional credit you accrued. However, if you were previously receiving a reduced pension, your new pension amount will be actuarially adjusted to take into account any pension payments you have already received. For more information on re-employment, contact OPTrust. Re-employed or engaged A re-employed pensioner is someone who is working for (becomes an employee of) an employer who contributes to the OPSEU Pension Plan. The pensioner is considered engaged if he or she has a fee-for-service contract with an employer who contributes to the Plan.

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Your online resources: learn more about your pension at your fingertips During 2009, our public website www.optrust.com received almost 285,000 visits. Increasingly more and more pensioners and members are going online to learn about key features of their OPTrust pension. From estimating your retirement income to integration with the Canada Pension Plan to tax deductions and naming beneficiaries, OPTrust’s resources offer information on a range of topics. Online Resources Website – www.optrust.com The OPTrust website offers a wealth of information to help answer your pension-related questions, targeted to different audiences: pensioners, members and employers. While online you can download forms, view OPTrust’s pension pay dates, learn how to update your beneficiaries and change your mailing address from our website. You can access news highlights, frequently asked questions for pensioners, and publications directly from the home page. Pension Connection Go green and receive your newsletter electronically. All you need to do is sign up for OPTrust’s secure Online Services. If you’re already registered for Online Services you will receive Pension Connection electronically. OPTrust will send you an e-mail notice when each new issue of the newsletter is posted to our website – often a week or more before the print version is in the mail. Online Services An increasingly popular feature on the website is our secure Online Services. Once registered you have access to your personal pension information, in a secure environment. With Online Services you can: view your current Pensioner Information Change Statement update banking and TD1 information view insured benefits coverage view a copy of your current T4A update beneficiary information update e-mail and mailing addresses. Click here to register or log in. Retirement Income Calculator Your OPTrust pension may be just one component of your retirement income. If you have other sources of income such as RRSPs, investments or Government benefits (Canada Pension Plan and Old Age Security), OPTrust’s retirement income calculator will help you estimate your potential retirement income from all sources. Using the calculator you can view personalized charts and graphs highlighting your retirement income. While online, you can find out how your pension is integrated with the Canada Pension Plan after age 65. To use the calculator, you will need to enter the current date as your “Projected Retirement Date.” Return to top of page

OPTrust’s Annual Funding update: Full 3% contribution increase needed Like other major pension funds, the Plan experienced a substantial investment loss in 2008 due to the global financial crisis. As described in the 2009 Annual Highlights Report, included with this newsletter, that loss has had a significant impact on the Plan’s funding. In 2009, an initial actuarial valuation identified a total funding shortfall of $2.7 billion as of the end of 2008. This shortfall included both the Plan’s funding deficit of $1.8 billion and deferred (or “smoothed”) investment losses of $927 million, to be recognized over the following four years. Deficit management In response, the OPTrust’s Board of Trustees, together with our two sponsors – OPSEU and the Government of Ontario – acted quickly to implement a proactive strategy for managing the deficit. Central to this strategy was the decision to implement a gradual 3% increase in member and employer contribution rates, rather than reduce members’ future pension benefits. The contribution increase is being phased in over three years starting in 2010, to reduce the immediate impact on members’ take-home pay and employers’ payroll costs. In the meantime, OPTrust’s investment portfolio performed strongly in 2009, generating a return of 13.6%. This was double the Plan’s 6.75% annual funding target return, which the Fund is expected to achieve over the long term to pay for member’s and retirees’ pensions. Given this strong performance in 2009, OPTrust was asked by the Plan’s sponsors to review whether the third 1% increase in contribution rates, scheduled for 2012, would still be required. Funding requirements In 2009, investment income helped increase the Plan’s net assets to $12 billion at year-end, up by $1 billion from the end of 2008. Given the Plan’s funding requirements, however, this one year of growth was not enough on its own to make up for our $2.4 billion investment loss in 2008. In fact, our analysis has determined that the Plan would need to achieve a return of at least 15% in 2010 to be able to avoid the third 1% increase in contribution rates. Due to the continued volatility in global investment markets, however, OPTrust’s investment return for the first six months of 2010 was below the Plan’s 6.75% funding target return on an annualized basis. As a result, unless there is a very significant rebound in capital markets for the latter half of 2010, eliminating the third contribution increase is not an option. While the approved 3% contribution increase and the Plan’s 2009 investment return have significantly reduced the Plan’s funding deficit and smoothed losses, the Plan’s current gains are not enough to avoid the full 3% contribution increase – particularly in light of the continuing high levels of investment market volatility. In the meantime, OPTrust’s Board of Trustees, our senior management and our external actuarial consultants will continue to monitor the Plan’s funding status. Look for more funding updates – and how we are working to ensure the security of your OPTrust pension – in future issues of Pension Connection. For more information on the OPTrust’s deficit management strategy and the Plan’s funded status, see the 2009 Annual Highlights Report included with this issue of Pension Connection.  The phased contribution increase approved by the Plan’s sponsors in 2009 reduced the 2008 funding deficit by $1.2 billion. The remaining deficit of $606 million is being eliminated through payments from the Plan’s rate stabilization funds over 15 years. In 2009, strong investment returns helped reduce the deficit to $393 million and the net smoothed investment loss to $294 million. Return to top of page

Facts About...Your pension beneficiaries

As an OPTrust pensioner you can count on a pension payable for your lifetime. You can also count on your pension to provide benefits for your eligible survivors after you die. That is why it is a good idea to confirm that the beneficiary information you have provided to OPTrust is up-to-date. You can start by checking your Online Services account or your Personal Information Change Statement (PICS). If the information on your statement is incorrect, you can update your records by completing OPTrust’s Pension Beneficiaries form. You should update your information when you: have an eligible spouse or end a spousal relationship have a child want to add or change your other beneficiaries Need to update your records? Simply log on to your secure Online Services account and click the “Manage My Beneficiaries” button. From there you can change or update your records in three easy steps. If you have a new spouse, you will need to contact OPTrust to update your record. The change cannot be made online. Who qualifies for survivor benefits? More information on naming your beneficiaries, eligibility requirements and how survivor benefits are paid is in our fact sheet Your pension beneficiaries   Return to top of page