The plan’s portfolio includes a mix of public and private investments
One of Canada’s largest defined benefit pension plans ended 2024 on a high, exceeding both its benchmark for the year and its 10-year return average.
OMERS saw the assets it manages to provide retirement income to almost 640,000 of Ontario’s public workers grow to $138.2 billion and reported a smoothed funded status of 98%, up from 97% in 2023. The plan paid $6.5 billion total pension benefits last year.
The plan achieved a full-year return of 8.3% or $10.6 billion net of expenses, above the 7.5% benchmark for the year and the 7.1% long-term average. Assets have grown more than $70 billion over the past decade.
More than half of the plan’s assets are in the US (53%), while 19% are in Canada, 11% in Europe, and 11% in Asia Pacific and the rest of the world. Infrastructure together with private and public equities are the largest asset classes.
Jonathan Simmons, OMERS chief financial and strategy officer, said that the plan was well positioned in 2024 due to the team’s actions to diversify its global portfolio.
“OMERS public equity investments delivered double-digit performance supported by strong contributions from private credit and infrastructure,” he noted. “Our net investment results benefitted from our active strategy to maintain currency exposure to the US dollar. Our real estate assets continue to generate strong operating income, but returns were held back due to lower valuations. Our asset mix continued to shift toward a higher exposure to fixed income, where return opportunities remain attractive. We expanded our overall use of leverage as we continued to use debt prudently to enhance our investment returns.”
A strong portfolio requires a strong team managing it and Blake Hutcheson, OMERS president and CEO paid tribute to both.
“Our strong result in 2024 reflects the quality of our people and portfolio, our active strategic decisions, and our steady progress as a long-term investor,” he said. “Since becoming CEO of OMERS, I have been incredibly proud of the work of our leaders and their teams, as well as the forward-thinking strategies we have implemented over the last four years as we emerged from the pandemic. This combination has generated an average annual net return of 8.1% during that period. As we look to the future, we are steadfast in our view that quality will see us through an unpredictable global landscape and the cycles ahead.”
Among OMERS’ activities last year were a deepened partnership with CPPIB in Indian roads infrastructure and an Asia Pacific focused private credit investing partnership with Goldman Sachs Asset Management that was announced in 2023.
In its results, OMERS reported a 58% reduction in the portfolio carbon emissions intensity, relative to 2019 and green investments totaling $23 billion.
