Member Satisfaction
Average annual pension
for members retiring in 2019
Employer Satisfaction

In 2019, we achieved an 11.9% net investment return, with positive performance across all asset classes. Public equity returns were particularly strong this year. Our 2019 performance exceeds last year’s net return of 2.3%, which was impacted by challenging stock market conditions, and also exceeds our benchmark of 7.5%. Over the past five years, our average net rate of return has been 8.5%.

This strong long-term investment performance, combined with contributions from our members and employers, improved our smoothed funded ratio to 97% – an increase of 1% from last year and the seventh consecutive year of improvement. On a fair value basis (i.e., without smoothing), our funded status is 101%.
1-year 3-year 5-year 10-year 20-year
11.9% 8.5% 8.5% 8.2% 6.5%
We use a discount rate to calculate the value of our pension obligations. In 2019, we reduced our real discount rate by 10 basis points, from 4.00% to 3.90%, reflecting the increasing risks the Plan is facing. We assume annual inflation of 2.00%, so our pension obligations are discounted at an all-in rate of 5.90% at December 31, 2019.

Since we began operating under our 2020 Strategy five years ago, our smoothed funded status has improved by 6%. Over the same period, we’ve reduced our discount rate by 35 basis points, exceeding the 25 basis points target we set in 2015. During that period, we have earned $9.8 billion of net investment income over the amount required to fund our liabilities.

Today, our long-term pension obligations are valued at $106 billion. These obligations are backed by our global portfolio of high-quality, well-diversified assets, with a fair value of $109 billion. As we invest and manage these assets, we apply our sustainable investing practices, which are described in later pages of our Annual Report. For an overview of 2019 investment activity, visit www.omers.com/investing.

Pension Terminology

The “funded ratio” is the ratio of net investment assets to long-term pension obligations. It is an indicator of the long-term financial health of the Plan. It can be calculated on a “smoothed” or “fair value” basis:

“Fair value” uses year-end values of OMERS assets, without any adjustments. Because our investment returns vary each year, this calculation results in a funded ratio that may also vary year over year.

“Smoothed” evens out the variations in annual returns over a five-year period. In this way, contribution rates and benefits are set using a more stable, long-term view of investment performance.

The “discount rate” is the interest rate used to estimate the dollar value of OMERS long-term pension obligations. It includes two components: a “real” rate before inflation and net of a margin for risk, and an inflation estimate. Setting the discount rate is key to managing the Plan and addressing risk. Lowering it increases the dollar value of our pension obligations and therefore decreases our funded ratio but makes the Plan more resilient. Lowering the discount rate also ensures that contribution rates are set to properly fund liabilities.

“Jointly sponsored pension plans” are those in which decision-making and contributions are shared by both members and employers.

Normal Retirement (Age 60) Normal Retirement (Age 65)
On earnings up to $57,400 9.20% 9.00%
On earnings above $57,400 15.80% 14.60%

One of our top priorities for 2019 was to find new ways to improve how we support and provide service to our members and employers. We have made good progress.

We upgraded myOMERS, our online member portal. In addition to accessing your accrued benefit and pension information, new features enable you to update your beneficiary, address and banking information online, as well as connect with our Member Services representatives through secure online communications. Investing in a new member relationship management system is helping us work more efficiently and improves how we stay connected to you. This system's capabilities will continue to increase as we introduce more features and functionality.

This past year we also made efforts to get to know you personally:
  • Our president, Blake Hutcheson, and our Chief Pension Officer, Annesley Wallace, visited five cities across Ontario, met with 700 members and retirees and answered over 100 questions. Plans are already underway for the 2020 President’s Roadshow.

  • 26,000 members participated in our Member Engagement Survey.

  • We talked to recently retired, or about-to-retire members who volunteered to share their expectations, experience and myths about retirement. Their candid thoughts will help us improve the member experience in the years leading up to and following retirement.

For employers, we launched our Employer Monthly newsletter – a collection of timely, plan-related content. We provided personalized training, aimed at enhancing employers' understanding of Plan administration. We listened to feedback on how to improve our employer web portal, which will be a focus area in 2020.

And we implemented a new method for measuring employer satisfaction, providing us more meaningful information about the employer experience. We achieved 92% employer satisfaction in 2019.

You are invited to attend
OMERS Annual Meeting:
April 8, 2020, 9:00 a.m.
Metro Toronto Convention Centre, South Building