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Weekly OPTrust Operational and Investments Update During COVID-19 Crisis: Update to Sponsors

OPTrust
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Background

Last week, we provided you with an update regarding our ability to service our members, measures we are taking to protect the health and safety of our team, and how the Plan is faring.

This memo provides the latest available information.  Please do not hesitate to contact me if you have any questions.

Members

We are seeing an overall decrease in requests for pension administration services across all channels:

  • Telephone counselling – approximately 20%
  • New transaction requests – 25-30%, depending on transaction type.
  • We are conducting no in-person counselling or information sessions.

Telephone calls from members have largely been about business-as-usual matters, with occasional inquiries about our funding position and COVID19 concerns.

Tomorrow we will be sending an email to all members with an update.  It is attached as an appendix to this note.  In it, we also note that starting next week we will not be collecting mail at the office for the foreseeable future.

Team

Last week we told you that 95% of OPTrust employees were working from home – the exceptions being 14 individuals collecting mail, answering the main switchboard, and some IT support.  The employees from IT were in the office to help clear up some technology backlog issues that had been hampering the abilities of some employees as they worked from home.  This week, 98% of OPTrust employees are working from home and the technology backlog continues to shrink, therefore increasing our overall effectiveness. 

We are taking further steps to protect the health of employees and by the end of this week, March 27, none of our employees will be coming into our offices.  This means we will no longer be collecting mail, a fact that has been communicated to members.  Phone software has been installed on laptops for the receptionists who answer the main switchboard and they are now connected from their homes enabling them to function seamlessly.

Investments

Although the markets are changing quickly due to the impacts of coronavirus, OPTrust is a long-term investor and its overall investment strategy has not changed.  This strategy is focused on managing the risk in the portfolio while earning the long-term returns we need to pay pensions.

OPTrust is fully funded.  We employ a Management Funded Ratio (MFR) for the internal measure of the financial health of the plan between year-end valuations.  It is used specifically to monitor market fluctuations of interest rates and actual and expected returns on assets.  All our investments are marked to market, with the exception of our Private Equity, Real Estate and Infrastructure investments.  Using the most recent data available, as of 1:30 this afternoon, our MFR was 101.8%, and YTD return was -2.9%. 

As you know, defined benefit pension plans are designed to weigh long-term investments against long-term liabilities.  Present circumstances are exactly why we are focused on our Plan’s funded status rather than annual returns.