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  • Year in Review
  • MD&A
  • Financials
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Management's Discussion and Analysis of Operations (MD&A)

At a Glance

Funding management - HOOPP posted strong returns in 2009, allowing the Plan to achieve fully funded status. As of December 31, 2009, the Plan was 102 per cent funded, up from 97 per cent funded at the end of 2008. This has allowed HOOPP to:

  • keep a commitment to hold contribution rates and benefits stable until at least the end of 2011, and
  • provide a cost of living adjustment for all pensioners on April 1, 2010

Investment management - HOOPP's conservative asset mix - developed following a strategic decision in 2007 - put the Plan in a good position to weather the major weakness in financial markets in 2008 and early 2009. In the latter stages of the market sell-off, asset mix decisions to increase the weighting in equities and credit allowed the Plan to take advantage of the recovery in the markets after March 2009 - one of the biggest rallies in history, which followed one of the biggest sell-offs in history.

Investment performance - In 2009, the steady recovery of the financial markets, after the March lows, led to strong returns in HOOPP's equities and fixed income portfolios, as well as positive growth in the private equity portfolio. HOOPP experienced double-digit gains of 15.18 per cent, more than offsetting a loss of 11.96 per cent in 2008. HOOPP beat its investment benchmark of 9.77 per cent by 541 basis points.

Contributions vs. pension benefits - Total Plan contributions climbed to $1,634 million in 2009, up 5.22 per cent or $81 million from 2008. At the same time, the total of pension-related payments for the year grew to $1,159 million - a year-over-year increase of 1.4 per cent or $16 million. For the first time in HOOPP's history, the pensions paid to retirees - on an annualized basis - exceeded the $1 billion mark.

Risk management - During 2009, HOOPP continued to work towards full integration of its funding policy and investment strategy. This multi-year initiative is designed to minimize market and operational risks through improved technology to better meet the Plan's long-term funding requirements.