Since Ontario Teachers' inception in 1990, 78% of the plan's pension funding sources have come from investment returns, with the remainder from member and government/designated employer contributions.
We aim to deliver on the three objectives – stable total-fund returns, value-add above our benchmarks, and volatility management of the funding status. Proactive risk management underpins our investment strategies, including our asset-mix selection, active management of our portfolio to add value, diversification and balance, and our approach to liquidity management including our investment funding strategy.
Ontario Teachers' investment funding strategy is focused on diversifying the sources of investment funding, managing the cost and maturity profile of the plan's financial liabilities, maintaining a presence in key funding markets, and supporting the overall management of the plan's currency exposure of the global investment program.
The investment funding strategy contains both short-term and long-term funding sources which collectively diversify and mitigate risk in the financial liabilities. Examples of short-term funding include bond repurchase agreements, commercial paper and securities lending agreements, while long-term funding includes unsecured term-debt issuance (as described below).
Ontario Teachers' Finance Trust (OTFT) issues commercial paper and term-debt that is fully, unconditionally and irrevocably guaranteed by Ontario Teachers'.
In addition to OTFT, Ontario Teachers' Cadillac Fairview Properties Trust (OT-CFPT) provides further investment funding diversity through its issuance of term-debt. OT-CFPT is backed by high-quality Canadian retail and office properties in the real estate portfolio and is non-recourse to Ontario Teachers'. For further information please visit https://www.cadillacfairview.com/