Plan Performance and 2021 Annual Report
Plan Performance and 2021 Annual Report
FUNDED STATUS
The Plan is currently more than fully funded, meaning it has more assets than it owes in current and future pension benefits. While the Plan is currently in a stable position, volatile markets can quickly change the funded status of the Plan. We constantly
adjust our investment strategies to changing market conditions to guard against potential downturns.
For regulatory filing purposes, we report our funded status on a smoothed asset value basis. The asset smoothing approach we use gradually recognizes the Fund’s investment returns over 5 years, only partially recognizing the 2021 return of 11.28%, and deferring the rest to future years.
The following table shows the Plan’s funded status for 2021 and 2020, both
on a net assets basis and on a smoothed asset value basis.
Funded status | 2021 | 2020 | Year-over-year change |
Ratio of net assets to pension obligation | 133% | 130% | 3% |
Ratio of smoothed assets to pension obligation | 120% | 119% | 1% |
In the graph below, the Plan’s net and smoothed assets have been charted against its pension liabilities over time.
Our consistently strong investment returns have kept the Plan fully funded and kept its contribution rates affordable, for both our members and their employers, and thereby sustainable in the long term. HOOPP has been able to maintain the same contribution rates since 2004.
The table below shows investment performance for 2021 and 2020, as well as the 10-year and 20-year performance of the Fund.
| | 2021 | 2020 | 10-year | 20-year |
Total return | 11.28% | 11.42% | 11.06% | 9.52% |
Benchmark* | 8.59% | 9.80% | 8.67% | 7.74% |
Value-added return | 2.69% | 1.62% | 2.39% | 1.78% |
*Benchmarks are established to measure the performance of investment strategies relative to risk taken.
Further contributing to the goal of meeting the pension promise, our investment strategies are implemented in a cost-efficient manner. Our total operating costs were $345 million, or 32 basis points of our average net assets available for benefits, compared to 31 basis points in 2020. Based on publicly available information, HOOPP’s operating costs compare favourably to similar Canadian pension plans.
This document provides a simplified overview of HOOPP's benefits based on the terms of the HOOPP Plan Text at the time of publication. From time to time, HOOPP may amend the HOOPP Plan Text. In cases where the information provided in this document differs from that contained in the HOOPP Plan Text, the HOOPP Plan Text will govern. More details, including the full HOOPP Plan Text and a complete description of the Plan and its benefits, can be found on hoopp.com.
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