March 01, 2010 11:00 ET

OMERS Releases 2009 Results

Rebounds to Positive Results Following 2008 Downturn

TORONTO, ONTARIO--(Marketwire - March 1, 2010) -Today, OMERS announced a 10.6 per cent total rate of return for the year ended December 31, 2009, compared with a negative 15.3 per cent total rate of return in 2008. The average rate of return for the past five years now stands at 6.6 per cent, above the five-year average benchmark return of 5.8 per cent.

Net investment income for 2009 totalled $4,310 million, compared to a net loss of $8,013 million in 2008 resulting from the global credit crisis and the subsequent meltdown of the global equity markets.

"In early 2009, we took a prudent and disciplined approach to investing in public equities as the global equity markets remained volatile and, in our view, presented undue risk to the Plan", said Michael Nobrega, OMERS President and CEO. "This approach ensured that we retained the flexibility to preserve capital while providing the opportunity to participate in a rebound that occurred in the equity markets later in the year. The performance of our private equity and infrastructure investments also provided very strong returns, reinforcing our decision to continue to expand our holdings in the private market asset classes."

OMERS remains on course with its five-year strategy introduced in 2008 which includes; (i) increasing the portion of the Plan's assets that are internally managed; (ii) increasing the size of the OMERS Plan; (iii) managing the investments of other domestic and international funds, and (iv) establishing investment alliances with third-party investors. The implementation of this strategy will grow OMERS assets under management and will allow for further participation in larger-scale investments with strong cash flows which will help to address the growth in pension obligations.

"Like the majority of the large plans, pension obligations have been increasing at a greater pace than contributions," said Patrick Crowley, OMERS Chief Financial Officer. "The downturn in the economy in 2008 reduced the value of our net assets, and changes in certain actuarial assumptions increased our pension obligations. This resulted in a Plan deficit of $1,519 million in 2009, with an additional $4,950 million of net losses from 2008 that will impact the deficit over the next four years. Enhanced investment returns in 2009 and in subsequent years will be one component in addressing this deficit."

OMERS is one of Canada's largest pension funds and was awarded Pension Fund of the Year Canada, 2010 by U.K. based World Finance Magazine. With an established track record of strong and steady performance and with investments in a wide range of businesses and assets around the world, OMERS provides retirement benefits to over 400,000 members from the municipal government sector in the province of Ontario, Canada.

For a more detailed breakdown of OMERS financial results, see the attached fact sheet.

This news release contains the year end financial results of the OMERS Administration Corporation. The 2009 Annual Report will be available through in the spring of 2010 and will include the financial statements of both the OMERS Administration Corporation and the OMERS Sponsors Corporation. Forward-looking statements are subject to inherent risks and uncertainties, general and specific, which may cause actual results to differ from the expectations expressed in these statements.

OMERS 2009 Returns

OMERS Pension Plan Fact Sheet*

OMERS Primary Pension Plan rate of return over one, five, ten and twenty years

1 Year   5 Years**   10 Years**   20 Years**
Rate of
Benchmark   Rate of
Benchmark   Rate of
Benchmark   Rate of Return Benchmark
10.6% 12.1%   6.6% 5.8%   5.2% 4.5%   8.1% 7.4%

Investment returns - OMERS Primary Pension Plan by Investment Entity for 2009 and 2008

Returns and Benchmarks          
  2009   2008
  Rate of
Benchmark   Rate of
OMERS Capital Markets 11.0% 13.5%   -19.5% -19.5%
OMERS Private Equity 13.9% 6.7%   -13.7% 13.5%
Borealis Infrastructure 10.9% 9.0%   11.5% 9.8%
Oxford Properties 1.3% 6.7%   6.0% 8.3%
OMERS Strategic Investments -1.2% 10.7%   N/A N/A
Total Plan 10.6% 12.1%   -15.3% -13.2%

Deficit Based on Fair Value vs Actuarial Value of Net Assets

  2009   2008  
Fair Value of net assets of the Plan $47,784   $43,438  
Accrued pension benefit obligation 54,253   50,080  
Plan deficit based on
fair value of net assets
(6,469 ) (6,642 )
Actuarial value adjustment 4,950   6,363  
Plan deficit based on
actuarial value of net assets
($1,519 ) ($279 )

* excluding Retirement Compensation Arrangement
** represents average annual rate of return

Contact Information

  • Media Contact:
    OMERS Administration Corporation
    John Pierce
    Vice President, Corporate Communications
    (416) 350-6784