The headline is what most of us read and it looks bad, “Teacher’s pension fund reports gain, but misses benchmark.” If you only read the headlines you might be worried about the long-term stability of the pension plan.
The story is not that bad, but you have to
look for the good news about the fund. At one point the author says “All
told, Teachers says it underperformed its 10.7-per-cent benchmark by more than
two full percentage points. The fund’s four-year return of 7.8 percent is
slightly less than its 7.9-per-cent benchmark.
“We have beaten the benchmark eight of
the last 10 years, so I think that overall that’s a solid performance from
us,” Mr. Taylor said.”
The report also says, “That asset
allocation helped Teachers outpace other large Canadian pensions that had put
their money elsewhere. The Ontario Municipal Employees Retirement System –
which entered the year with 5.5 percent of its portfolio in bonds, posted a
2.7-per-cent loss in 2020 because it didn’t have a counterweight to real estate
and private-investment losses.”
The report does overall present a positive
take on how well the pension has done, but from the headline you would think
that the fund was not doing well at all. The bottom line is that the fund
missed its own benchmark by .01 of a percent. The investment board of the
Teachers' Pension Plan of Ontario is still doing a very good job of making sure
that they are protecting the plan and investing wisely. Bottom line, read the
story, not just the headline.
