The Ontario Teachers’ Pension Plan reported
a net return of 9.4% for the year ended Dec. 31, 2024, outperforming its 1.9%
return in 2023.
According to the pension plan’s latest
annual report, its net assets grew to $266.3 billion, up from $247.5 billion in
2023. It noted investment income of $23.7 billion and member and employer
contributions of $4.3 billion for the year were partially offset by benefits
paid of $8.1 billion and administrative expenses of $1.0 billion.
However, the fund missed its 2024 total benchmark return of 12.9%, resulting in negative value-add of $7.6 billion, which the plan noted was primarily due to assets in private equity (11.7%) and real estate (-0.7%) trailing their respective benchmarks (23.7% and 5.0%) for the year. Notably, real estate did see a marked increase from in 2023 (-5.9%). Returns for its venture growth portfolio also lagged in comparison to its 2024 benchmark (25.8% compared to 29.2%).
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Commodities saw the biggest increase, hitting its current benchmark (25.2%). The plan’s fixed income investments also met the 2024 benchmark at 4.8%. And although the plan’s public equities portfolio outperformed its 2023 results, it still came in just under the 2024 benchmark (23.2% versus 25.8%). Meanwhile credit (17.2% vs 16.8%) and infrastructure (9.1% vs 8.5%) both outperformed their current benchmarks.
Additionally, the report highlighted that
the plan has delivered an annualized total-fund net return of 9.3% since
inception in 1990 and five- and 10-year annualized total-fund net returns of
6.9% and 7.4%, respectively.
"Our teams worked methodically in 2024
to create value in the portfolio, delivering a 9.4% return, significantly above
the outcome for 2023 and more in line with our long-term returns,” said Jo
Taylor, Ontario Teachers’ president and chief executive officer, in a press
release. “We had positive contributions from across the plan, with notable
success in venture growth, credit, inflation-sensitive, and public equity
investments. The resilience of our portfolio, combined with our proactive
approach to creating value, has positioned us strongly in an unpredictable
economic climate.”
