Investment Management - Introduction

For HOOPP, like other defined benefit pension plans, the underlying objective is to preserve the pension promise. Given the importance of that promise, HOOPP needs to ensure the Plan's investment strategy aligns with funding and cash flow requirements.

To that end, HOOPP uses a liability driven investing (LDI) approach which uses the Plan's liabilities as the primary reference point in assessing risk and return objectives of a particular investment.

While HOOPP still measures investment manager performance against industry benchmarks the most important measure of success is meeting the Plan's pension obligations.

To meet the Plan's estimated pension obligations, HOOPP must - over the long term - achieve a nominal return of at least 6.5 per cent (or a real rate of return of 4.25 per cent after adjustment for an assumed inflation rate of 2.25 per cent. HOOPP exceeded that target in 2009, producing a return of 15.18 per cent.