2020 FUNDED STATUS REPORT

PLAN SUSTAINABILITY

This year has certainly been a time for “taking care.”

From the Board’s perspective, our overarching fiduciary duty is to act in the best interests of the Plan’s beneficiaries. In that sense, we oversee the Plan’s management and the way they discharge the responsibility to ensure we are taking care of members.

Plan sustainability is always a top-of-mind issue because it relates to the long-term nature of defined benefit pensions. We last conducted a sustainability study in 2016 and in 2020 began a new sustainability study, which is in progress, to understand the impact of adverse circumstances related to pension risks and how they can be addressed.

2020 presented many challenges for everyone. Throughout the year, the OPTrust team performed efficiently and at a high capacity. The Member Experience team, for example, has radically changed the way they deliver their services. During the pandemic, they have been thoughtful and seamless in terms of moving online from in-person appointments. That journey will continue to evolve.

Taking care of members requires a great deal of hard work. The environment today is much different than when the Plan was created 25 years ago and OPTrust is navigating these changes successfully because of the efforts of the OPTrust team.

OPTrust is a mature Plan. Member- Driven Investing is a strategy that takes care of investments on behalf of members — something that is particularly important when markets are volatile. OPTrust is able to deliver on its mission — to pay pensions today, preserve pensions for tomorrow — not only through hard work, but also through smart work. The team has helped the Plan through the short-term market volatility in the early days of the COVID-19 pandemic, found solutions to difficult challenges and made the right decisions to benefit members’ long-term interests.

OPTrust Select continues to grow. It is a significant victory for people who would never have had an opportunity to belong to a defined benefit plan. It is making life better for people not only last year, this year and next year, but decades down the road. It will provide a modest, regular stream of income as working people become seniors. While so many others are retrenching from creating retirement income security, OPTrust is building new opportunity.

BOARD COMPOSITION

Michael Grimaldi was the board chair through most of 2020 and we thank him for his service in this capacity. We are enthusiastic about the efforts undertaken by the team and Board to promote diversity and inclusion within the organization — something the Board reflects in its own composition. In fact, for the first time, women occupy both the chair and vice chair positions.

THE OPTRUST TEAM

Our fellow Trustees put thought and effort into the decisions we make, but those decisions only produce results when the team works on members’ behalf to implement them. We thank the entire OPTrust team for its continued commitment to taking care of our members each day throughout this year’s exceptional and challenging circumstances.

Sharon Pel
Chair

Lindsey Burzese
Vice Chair

 

TAKING CARE

Every day, the team at OPTrust takes care of members and their financial future in retirement. We do this by using a prudent investment strategy designed for the long term. It is structured to weather market turbulence, and provide the returns we seek to deliver on our pension promise.

And while it’s what we do each day, in many respects, taking care was the theme for 2020.

It was the year we experienced the most significant public health crisis in over a century with the emergence of the COVID-19 pandemic. We witnessed tremendous sacrifice and courage, and sadly, significant loss for many around the globe.

It was a year of taking care of not only the Plan, but also each other; our communities, our team and our obligations to our members as we continued to deliver on our mission of paying pensions today, preserving pensions for tomorrow, while working from home.

The year also gave rise to a global social justice movement that demands an end to the discrimination of marginalized people the world over, and an acknowledgment of the changes required to end systemic racism. It is clear we all have a role to play in promoting fairness, equality and acceptance so that we can achieve an end to discrimination of all kinds.

CHANGE AND ACHIEVEMENT

2020 marked OPTrust’s 25th year of proudly serving our members and was my first full year as President and CEO. While the pandemic presented challenges, we remained fully funded for the 12th consecutive year and continued to provide stability and security to our more than 98,000 members, with the team providing the same high quality and level of service that members have come to expect from us. The funded status is the measure that matters when it comes to long-term sustainability.

We reprioritized our strategic plan to increase our focus on our members and the experience they receive when interacting with us. We continue to have gender parity on the executive team and identified diversity and inclusion as an organizational priority.

Recognizing how critical a strong corporate culture is to organizational success, we are working as a team to identify our key values, the qualities that define us and our vision for the future. We strive to offer an exceptional workplace — one which team members are proud to identify as their place of employment.

A RESPONSE TO CLIMATE CHANGE

The pandemic demonstrated just how truly connected we really are. And while combatting the virus required a global effort, it is clearly not the only challenge of this scale we face.

The United Nations identified climate change as the defining issue of our time. OPTrust’s sustainable investing program is a key component of its long-term investing horizon because it ensures environmental considerations are integrated into OPTrust’s decisionmaking processes. This is important for the sustainability of the Plan and the planet.

With our 2018 Climate Change Action Plan serving as a foundation, we brought renewed focus in 2020 to how we address climate change with the launch of a new Sustainable Investing and Innovation team, whose mandate is to identify new investment opportunities at the intersection of sustainability and innovation. This year has proven the critical importance of a long-term strategy, with sustainable investing providing the ultimate long-term investing approach.

PROVIDING RETIREMENT INCOME

Pensions play a critical role in providing the ability to retire. Now, more than ever, our members look to us to be there for them when they transition from the workplace to retirement. In 2020, our newest defined benefit offering, OPTrust Select, reached a significant milestone and now has more than 43 employers and almost 1,400 members across the province in the broader public and nonprofit sectors. These workers fulfill some of the most essential services in our communities and their well-being in retirement is essential to us.

The effectiveness of our Member- Driven Investing strategy was evident in the way the portfolio remained resilient against market volatility. While the Plan continues to face a number of challenges, including a continued low interest rate environment and plan maturity, we have a high level of liquidity to help take advantage of opportunities that may arise.

I would like to thank the Executive Team for serving members through their diversity of thought and leadership as they met the challenges of this unprecedented year. My thanks also go to the entire OPTrust team for their resilience and unwavering commitment to serving our members.

Peter Lindley
President and Chief Executive Officer