The $51.6-billion Healthcare of Ontario Pension Plan (HOOPP) bested its peers with a funding ratio of 114 per cent at the end of 2013. But even with that success, HOOPP’s chief executive isn’t expecting other plans to adopt his investing methods.
HOOPP is well known for its liability-driven investment (LDI) pension management strategy, which aligns the plan’s assets with its future liabilities to limit volatility. This involves holding a lot of long-term bonds. In the past few years, the focus on bonds has been highly profitable for HOOPP, leading to double-digit investment returns in 2011 and 2012, and keeping the plan more than fully funded.