OMERS has a strong and growing balance sheet, currently with more than $60 billion in net assets. In 2012, OMERS collected $3.2 billion in contributions and paid out $2.7 billion in benefits, clearly demonstrating its ability to meet its pension obligation in the short and medium term.
Annually the Plan makes a projection regarding its ability to pay pensions over the long-term. At the end of 2012, the total pension entitlements earned to date by all Plan members exceeded OMERS actuarial net assets by $10 billion, resulting in a funding deficit. This projected, long-term deficit is mainly the result of increasing liabilities and the impact of investment losses incurred as a result of the 2008 global financial crisis.
In 2010 OMERS implemented a plan aimed at eliminating the deficit over time through measures that include a contribution increase phased in over three years assuming a 6.5% net investment return on an annual basis.
"This deficit is based on a long-term projection going out several decades and in no way reflects our ability to pay pensions in the short term. Solid investment returns which have averaged 8.9% per year in the four years since the financial crisis, and 8.24% over the past 10 years, combined with contribution increases, are already having a positive impact on reducing the deficit. Sustained returns at this level could bring the Plan back to fully funded status earlier than anticipated," said Patrick Crowley, OMERS Chief Financial Officer.
In 2012 OMERS marked its fifth time as one of Aon Hewitt's 50 Best Employers in Canada, third year as Pension Fund of the Year: Canada (World Finance Magazine), and was named one of Canada's Passion Capitalists.
OMERS 50th Anniversary
A critical component of Canada's retirement system, the OMERS defined benefit plan was created to provide financial security to municipal workers in Ontario and their families when they retire. Before OMERS, many municipal employers across the province did not participate in a pension plan to support their employees' retirement. By bringing municipalities and local boards together, OMERS brought strength in numbers through a stable pooled investment fund with secure benefits. Since the first plan members enrolled in 1963, OMERS has grown into one of the country's largest pension plans. Today, as OMERS enters its 50th year, Plan membership is at a new high of 429,000. For the 124,000 current retired members and survivors, the average annual pension being paid is approximately $18,600.
In 2013, OMERS marks 50 years of providing a stable and secure defined benefit pension plan for Ontario workers and is now one of Canada's largest pension funds with $60.8 billion in net assets. OMERS provides first-class pension administration and innovative products and services to 429,000 members. OMERS members and their employers contribute to the Plan in equal amounts through their contributions. Nearly one in every 20 employees working in the province of Ontario is an OMERS member. Through the OMERS Worldwide brand, our team of investment professionals uses a direct drive, active management investment strategy to invest in public and private market assets, including publicly-traded equities, fixed income, infrastructure, private equity and real estate. For more information, please visit www.omers.com, or www.omersworldwide.com.
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