Since Ontario Teachers' inception in 1990, almost 80% 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 of our strategy – 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. The investment strategy includes a Liability Driven Investment (LDI) program, which is designed to help manage funding ratio volatility by mitigating risk associated with changes to the discount rate of the plan's pension liabilities.
Ontario Teachers' investment funding strategy is focused on diversifying the sources of investment funding, reducing costs in support of managing portfolio risk and reducing pension liability risk. The investment funding program serves to manage the maturity profile of the plan's financial liabilities, and supports the management of the overall currency exposure of the global investment program. While Ontario Teachers' Finance Trust (OTFT) is an independent entity, it plays an important role in Ontario Teachers' overall investment funding strategy.
In addition to OTFT, Ontario Teachers' Cadillac Fairview Properties Trust (OT-CFPT) was established in 2017 to provide further investment funding diversity. 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/