OMERS, the defined benefit pension plan for municipal sector employees in Ontario, generated a 2022 investment return of 4.2%, net of expenses, despite one of the worst market environments since 2008.
The addition of $4.9 billion of investment income to the Plan brought 2022 net assets to $124.2 billion, according to Yahoo Finance.
During 2022, investors faced extreme challenges as central banks raised interest rates to help tamp down inflation. The Russian invasion of Ukraine, COVID-19 effects, and other factors led to declines in the global stock and bonds market.
“Our investment strategy that emphasizes high-quality assets, diversification, active management, and a disciplined, long-term perspective, served the Plan and our members well in 2022, producing positive returns in a year where broad market indices and the vast majority of investors experienced losses,” Blake Hutcheson, OMERS President and Chief Executive Officer, told Yahoo Finance.
Over 10 years, OMERS has earned an average net return of 7.5%, adding $64.4 billion to the Plan, Hutcheson said.
Allocations to private investments and a focus on short-term credit over long-term bonds protected OMERS from market losses, the Plan’s Chief Financial and Strategy Officer, Jonathan Simmons, told Yahoo Finance.
“At the same time, investing sustainably continues to be a priority and we have successfully lowered the carbon intensity of our portfolio by 32% since 2019, exceeding our 2025 carbon reduction target,” he said.
OMERS has 1,000 participating employers and more than 500,000 active, deferred, and retired members, including union and non-union employees of municipalities, school boards, local boards, transit systems, electrical utilities, emergency services, and children’s aid societies across Ontario.