Looking after $30 billion is a major responsibility – and one that HOOPP takes seriously. Securing the pension promise depends on it. But given that the majority of HOOPP pension benefits are funded from investment earnings, rather than through contributions, we need to protect the money and make it grow.

To help protect the Plan’s assets while earning a reasonable rate of return, we’ve implemented – and continue to develop – a wide range of risk-management strategies and tools. For example, during 2007, we:

• Continued to move toward a liability-driven investment approach. This approach will help to ensure our investment strategy carries a suitable level of risk – one that allows us to both protect and grow the Fund’s assets.
  
  
• Changed the asset mix policy. The new policy supports the Fund’s liability-driven investment approach by reducing exposure to equity markets in favour of historically less volatile bond and real estate markets.
  
  
• Implemented hedging strategies using derivatives to modify the risk profile of the Fund and its equity holdings.
  
  
• Continued with the development and implementation of improved investment technology. This includes an integrated data and performance management system that:
  • synthesizes information from multiple sources to produce value-added data
  • supports investment decision-making
    
    
• Moved forward with a multi-year initiative to build an asset and liability modelling and risk measurement system to further enhance our risk management capabilities.

As part of its ongoing risk management procedures, HOOPP regularly reviews its:

• Statement of Investment Principles (SIP), which defines the Plan’s investment return objectives and risk tolerances based on total Plan liabilities
• Statement of Investment Policies & Procedures (SIP&P), which provides broad investment guidelines for the investment of HOOPP assets
•   Investment Policies & Guidelines (IP&G), which:
  
  
  • sets benchmarks and value-added investment objectives
  • places limits on where money can be invested
  • establishes guidelines for determining the value of different assets