We are pleased to inform you that HOOPP’s in-house investment team delivered a positive return for 2015, despite a difficult year in the global economy and for investors.
Most importantly however, despite these challenging times, our funded status remained strong, rising to 122% from 115% in 2014.
That means we have more than enough assets to cover what we owe in pension benefits. In other words, for every $1 we currently owe in benefits to every retired and active member, the Fund has $1.22 in assets.
This surplus serves as a cushion, allowing the Plan to withstand the challenges that we saw in financial markets last year.
In the first half of 2015, Canada’s economy slipped into what was technically a recession, for approximately six months. Oil prices, half of what they were in previous years, remained lower for far longer than analysts predicted, and stock markets stalled.
The Bank of Canada lowered its key interest rate in January and again in July in an attempt to jumpstart the economy and financial markets.
But the impact was muted as growth faltered in the U.S. and China, two of the world’s largest economies.
HOOPP’s overall return for 2015 was 5.12%, bringing our net assets under management to $63.9 billion. While this result was more modest than the strong return we reported for 2014, we are pleased to end the year with a strong fully funded status.
In these volatile times, we continue to keep a long-term perspective. Our Plan has a very long time horizon of up to 70 years to invest contributions to help fund your retirement. It is inevitable that there will be ups and downs over that time, but those fluctuations won’t affect the pension you receive in retirement.
In a defined benefit (DB) plan such as HOOPP, pension payouts are not determined by investment returns; they are based on a formula that takes into account your earnings and how many years you contributed to the Plan.
Our investment team remains cautiously optimistic. It’s clear the world economy is still struggling in the aftermath of the Great Recession of 2008, but this does not distract us from our main objective as an organization: keeping our pension promise. That means paying benefits to you, our members who are currently retired.
It also means making sure that the Fund is stable and secure, so that we can be confident that we will have the funds available to pay retired members in the future.
If you have any questions, please visit our annual results page, There, you’ll find our 2015 Annual Report and video, our 2015 Year in Review, and FAQ.
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HOOPP President & CEO