Message from the Chief Executive of the TTC Pension Fund Society12 August, 2020
The TTC Pension Fund Society has been delivering our pension promise for 80 years and we are committed to continue to deliver on that promise well into the future. When we manage our plans assets, we need to employ a long-term approach, keeping in mind that the contributions that we receive from a TTC Operator today, while they are in their 20s or 30s, will be used to deliver pension payments to that person as a pensioner while they are in their 80s and 90s.
We put you, the Member, first in everything that we do, beginning with a financially strong Plan that allows us to provide our Members with a solid foundation for their retirement. In 2019, our net assets grew to $7.3 billion, representing an investment return of 13.6%, one of our strongest years on record. The strength of 2019’s performance is a continuation of a consistent long-term track record, over the past 10 years, the Fund earned 8.5%, which has exceeded the return of our Plan benchmark by 0.5%. Over that time period our asset values have more than doubled.
While this performance is strong, we fully expect, and are prepared for, periods that are characterized by challenging short-term performance as a result of external factors, such as the COVID-19 pandemic. While the pandemic specifically is a phenomenon that we have not yet encountered in our 80-year history, we have successfully navigated through rough waters in the past, and our thoughtful Plan features and strong governance were developed so that we can weather the storms that come our way.
The strong position was based on long-term investment portfolio returns and strong cost control features with a risk management focus. The positive results of our investment portfolio have allowed the Board to keep our base period fully up to date and provide a 1.96% pensioner increase. Active Members and 2020 retirees will now have their pensionable earnings and credited service up to December 31, 2019 included in the base period for the calculation of their pension benefit.
The Board is confident in our approach; we entered into 2019 in a solid position, however the COVID-19 pandemic gave us reason to pause and to re-confirm our view that benefit updates remain prudent for current and future pensioners. As you know, on an annual basis, the Board assesses affordability of benefit improvements, including pension indexing, and grants them at their discretion. Future enhancements are not guaranteed.
Particularly in challenging times, we reiterate our commitment that the Plan continues to run smoothly, and you can rest assured that pension that you have earned will continue. We remain dedicated to serving our Members, and supporting the health and safety of our staff. During this extraordinary time, our offices are closed to protect our Members, staff and broader community, however our people are fully engaged and continue our work from home. Our response times to calls and e-mails may be slower, but we continue to work diligently on providing our high standard of service to our members.
Chief Executive Officer
TTC Pension Fund Society
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