2019 PENSION PLAN REPORT
As of October 2019 there are 1,511 members receiving pensions from the Local 213 Electrical Workers Pension Plan. The total paid out for our past year was $10,725,919.78.
On the investment front, Trustees of the pension plan continue to diversify the portfolio to mitigate risk, protect plan assets and to meet our investment return objectives. At the writing of this report the pension plan is in the process of adding a new infrastructure investment in the Leith Wheeler Infrastructure Fund. The plan also made an additional investment in the Concert Real Estate Corporation (CREC) Commercial Fund. The CREC Commercial Fund returned 15% last year and 20% the year prior.
The investment return for the plan for the fiscal year ending June 30, 2019 was 7.5%, outperforming our 6.5% expected rate of return (discount rate), a relatively good result for a period of global tension surrounding trade wars originating south of the border and extremely volatile markets. According to a September 2019 Canadian Press report, “Canada’s domestic economy has been resilient even as trade wars inject significant uncertainty into the slowing global economy. Many forecasters have been expecting the Bank of Canada to cut its overnight lending rate before the end of the year.”
Although inflation in Canada seems to be in check, which is generally good for retirees, low interest rates create a challenge for pension plans to meet pension funding objectives. A well-diversified portfolio such as ours is designed to perform reasonably well in nearly all circumstances. Over time, that kind of performance should lead to a secure pension for plan members.