2012 Annual Report. Graphs, charts and tables. January 1, 2012, to December 31, MPP AR Graphs Tables

Transcription

1 Annual Report Graphs, charts and tables January 1,, to December 31, MPP AR Graphs Tables

2 Contents Account Investment Asset Mix and Performance Table...3 Active Members Profile by Gender Chart...3 Active Members (Normal Retirement Age 60) Graph Active Members (Normal Retirement Age 65) Graph Active Members by Group Chart...5 Actuarial Valuation Results Table...5 Age Profile of Active Members Chart...5 Average Employer Contribution Rates by Sector Table...5 Average Pension in Pay Graph...6 Average Value of New Regular Pensions Table...6 Contributions Graph....7 Contribution Revenue Chart...7 Member and Employer Contributions Graph...7 Pensions Compared to Contributions...8 Contributions Graph....8 Dollar Value of Pensions Paid Graph...8 Effect of Cost-of-Living Adjustments over 20 Years Graph...9 Employer Contribution Rates Table....9 Five-Year Financial Summary Table Funding of the Total Basic Benefit Liability Growth Rates Graph...11 Investment Holdings Chart...11 Investments Held Table...12 Market Value Rates of Return Table...13 Membership Profile Chart Municipal Pension Plan Employers Chart...14 Net Assets Available for Benefits Graph New Pensions 2003 Table...15 New Regular Pensions (by Age at Retirement: 65) Table...15 New Regular Pensions (by Age at Retirement: 60) Table...15 Percentage of New Regular Pensions Charts...16 New Regular Pensions Charts...16 Number of Members Table Number of Members 2003 Graph...17 Number of Active Members by Sector Table...17 Pensions in Pay 2003 Table Real Estate by Location Chart...18 Ratio of Active Members to Retired Members Graph...18 Total Regular Contributions by Employer Sector Chart...18 Top Ten Holdings Table

3 Account Investment Asset Mix and Performance Target Asset Target Asset Actual Asset Approved Mix Market Mix Market Rate of Performance Asset Class Range (%) Value (%) Value (%) Return (%) Benchmark (%) Fixed income Short Term Mortgages Nominal Bonds Real Return Bonds Equity Canadian Equities Global Developed Equities Emerging Markets Real Estate Private Placements Strategic Investments and Infrastructure Total Basic Asset Mix This table is important because it shows how the Plan directs its assets to be allocated. It is important that a healthy asset mix be maintained. Active Member Profile by Gender Female 129,768 73% Male 48,970 27% This chart shows the gender makeup of the Plan. 3

4 Active Members normal retirement age 60 5,810 5,948 5,969 5,989 6, Female Male This chart shows the number of active members with a normal retirement age of 60, normally police officers and firefighters. This graph clearly shows the majority of members in this segment are male. Active Members normal retirement age , , , , ,981 37,907 39,143 41,668 42,354 42, Female Male This chart shows the number of active members with a normal retirement age of 65. This graph clearly shows the majority of members in this segment are female. 4

5 Active Members by Group Age Profile of Active Members Group 4 (females other than police officers and firefighters) 128,981 72% <40 years 52,804 29% years 51,462 29% Group 1 (males other than police officers and firefighters) 42,927 24% years 31,828 18% Note: There are also three Group 3 females in a special closed group. Group 5 3,552 2% Group 2 (police officers and firefighters) 3,275 2% years 26,924 15% 60 years 15,720 9% This chart shows that groups 1 and 4 make up the majority of all plan members. If a plan s demographic includes a high proportion of older members, this can mean challenges for the plan because more people will be retiring sooner rather than later. Average Employer Contribution Rates by Sector Number of Average Employers Rate (%) Cities, Districts, Towns, Villages and Regional Districts Health Sector School Districts Colleges Group Community Social Services Other Total This table shows the number of employers and average contribution rates by sector. Actuarial Valuation Results ($ Thousands) The actuarial valuation is conducted every three years as a way to assess the financial health of the plan to help ensure the plan remains financially sound Total Assets 32,501,912 26,347,926 20,524,161 Total Liabilities 33,526,101 25,909,552 21,313,202 Surplus (Unfunded Liability) (1,024,189) 438,374 (789,041) Funded Ratio (Assets/Liabilities) * Calculated based on a current contribution basis which assumes that contributions continue at the rate in efffect at the valuation date. This table shows the results of the last three actuarial valuations. Actuarial valuations are conducted every three years in order to ensure the Plan s contribution rates are sufficient to pay promised pension benefits. 5

6 Average Pension in Pay $15,043 $15,573 $15,660 $15,980 $16, This chart shows how the average annual pension has increased since. Average Value of New Regular Pensions Average Annual Average Annual Average Present Total Present Years of Number of Salary Base Pension Value of Pensions Value of Pensions Service New Pensions ($) ($) ($) ($ Millions) < ,000 5,400 77, to ,000 12, , to ,000 17, , to ,000 24, , to ,000 33, , to ,000 43, , and up ,000 47, , Total 3,693 n/a n/a n/a 1,323.8 Average for New Regular Pensions n/a 61,000 22, ,000 n/a This table shows the number of new pensions in, subdivided by years of service. It also shows average pensions and the present value of pensions. 6

7 Contributions ($ Millions) Member Employer Contribution Revenue year ended December 31, ($ Millions) Employer Contributions $ % Member Contributions $ % Transfers from Other Plans $18.7 1% This chart shows that employer and member contributions make up the majority of all contributions to the Plan This shows member and employer contributions have essentially doubled in this period. Employer contributions have increased by 104 per cent, member contributions by 97 per cent. Members and Employer Contributions year ended December 31 ($ Millions) Member Employer This chart shows how member and employer contributions have increased steadily since

8 Pensions Compared to Contributions ($ Millions) 983 1, ,279 1,139 1,521 These graphs show the increase in pensions paid between 2002 and as well as the contributions made during this same period Pension Payments Contributions Contributions ($ Millions) Members Employers Dollar Value of Pension Payments ($ Millions) 1,

9 Effect of Cost-of-Living Adjustments over 20 Years ( ) 10,000 10, % 11,866 1,866 19% 13,176 3,176 32% 14,371 4,371 44% 10,000 10,000 10,000 10,000 10, Basic Annual Pension Cost-of-Living Increases Granted This chart shows how indexing, over time, helps retirees pensions keep up with inflation. Employer Contribution Rates effective July 2011 includes Inflation Adjustment Account contribution rates <45 years 45 years <50 years 50 years Salaries less than or equal to YMPE (%) Group Group Group Group Group Salaries greater than YMPE (%) Group Group Group Group Group This table shows the employer contribution rates by group and age. 9

10 Five-Year Financial Summary ($ Millions) Increase (Decrease) in Assets Investment Income (Loss) $ 2,945 $ 924 $ 2,425 $ 2,396 $ (3,092) Contributions Members Employers Transfers from Other Plans Total Increase (Decrease) in Assets 4,485 2,353 3,718 3,640 (1,964) Decrease in Assets Benefit Payments 1,299 1,187 1,057 1, Transfers to Other Plans Retired Member Group Benefits Investment and Administration Costs* Total Decrease in Assets 1,460 1,333 1,191 1,123 1,042 Increase (Decrease) in Net Assets 3,025 1,020 2,527 2,517 (3,006) Net Assets Available for Benefits at Beginning of Year 28,037 27,017 24,490 21,973 24,979 Net Assets Available for Benefits at End of Year $31,062 $28,037 $27,017 $24,490 $21,973 Investment and Administration Costs as a Percentage of Net Assets* (%) Investment Management* Benefits Administration * External investment management costs incurred in the investment pooled funds by wholly owned corporations of $21.8 million (2011 $14.0 million; $12.0 million: 2009 $10.3 million; $13.0 million) reduce investment income and are not included in investment and administration costs. They are included in investment management costs as a percentage of net assets. This table shows the financial strength of the Plan from to. Funding of the Total Basic Benefit Liability ($ Billions) Valuation Year 2009 Funded Portion Unfunded Liability Surplus This chart shows the difference between the funded portion of the Plan and the unfunded liability or surplus, as determined by the actuarial valuations. 10

11 Membership Growth Rates for the period December 31, 2003 to December 31, 100% 90% 80% 70% 60% 50% 40% Vested 82% Retired 70% Inactive 67% Total 50% Active 39% 30% 20% 10% 0% This graph clearly shows that between 2003 and the number of members in all member groups has increased. Investment Holdings ($ Billions) Global Equities $9.2 30% Canadian Equities $4.9 16% Real Estate $4.8 15% Bonds $4.1 13% Strategic Investments and Infrastructure $2.0 7% Emerging Markets $1.5 5% Private Placements $1.5 5% Real Return Bonds $1.4 4% Mortgages $1.1 3% Short Term $0.6 2% This chart shows the diversity of investment holdings of the Municipal Pension Plan. 11

12 Investments Held Market Value Asset Mix ($ Thousands) Market Value (%) Short Term Money Market $ 164, Bonds (1 5 years) 461, , Mortgages 1,087, Bonds Global Government 288, Universe 3,812, ,100, Real Return Bonds 1,344, Canadian Equities Indexed 2,653, Actively Managed 2,216, ,870, Global Equities U.S. Indexed 3,129, U.S. Actively Managed 1,191, Global Indexed 307, Global Active 1,139, Europe Indexed 361, Europe Active 566, Europe, Australia and Far East Indexed 831, Europe, Australia and Far East Active 140, Asian Indexed 248, Asian Active 1,187, International Hedging 95, ,201, Emerging Markets 1,527, Real Estate 4,787, Private Placements 1,523, Strategic Investments and Infrastructure SIFF Public Equities 266, Domestic Private Placements 139, Foreign Private Placements 1,469, Real Estate 148, ,024, Total Investments $31,091, Comparison $28,044,090 * Asset classifications vary from the financial statements for the purpose of performance reporting on Strategic Investments and Infrastructure. This table is important because it shows how the Plan s assets are invested. 12

13 Market Value Rates of Return Market Value Performance Rates of Benchmark Return* (%) Return (%) Annual Rates* (12.4) (10.1) Five-Year Annualized Rates Ten-Year Annualized Rates Annual Rate by Investment Category Short Term DEX T-Bill 91 day Money Market DEX T-Bill 91 day Bonds DEX Short-Term Government Bond Index Nominal Bonds DEX Universe Bond Index Universe Bonds DEX Universe Bond Index Global Government Bonds JP Morgan Hedged Real Return Bonds DEX Real Return Bond Overall Index Mortgages Combined Benchmark Fixed Term DEX ST Bonds + 1% Construction DEX 1 Year T-Bills + 1% Mezzanine DEX 1 Year T-Bills + 2.5% Canadian Equities S&P/TSX Composite index Active S&P/TSX Capped Equity Active Small Cap 11.9 (3.6) S&P/TSX Small Cap Indexed S&P/TSX Equity Enhanced S&P/TSX Capped Equity Global Developed Equities MSCI World ex-canada Net Global MSCI World ex-canada Net U.S. Active Russell 1000 U.S. Small Cap Russell 2000 U.S. Indexed S&P 500 Total Return Index U.S. Social Indexed MSCI KLD 400 Social Index U.S. Enhanced Russell 1000/S&P 500 Asian Indexed MSCI Pacific Net Asian Active MSCI Asia Pacific ex-japan Net Europe MSCI Europe Net Index Europe, Australia and the Far East MSCI EAFE Net Index Emerging Markets MSCI Emerging Markets Net Index Domestic Real Estate CPI + 4% * Beginning January 1,, bcimc merged the inflation adjustment portfolio and the basic portfolio into one. All returns prior to January 1,, are for the basic portfolio only. Performance Benchmark Indices Abbreviations CPI = Consumer Price Index DEX = PC-Bonds Domestic Exchange Index MSCI = Morgan Stanley Capital International S&P = Standard & Poor s S&P/TSX = Standard & Poor s/toronto Stock Exchange Equity or Capped Equity (Source of annual rates: British Columbia Investment Management Corporation) This table compares the Plan s rate of return with performance benchmarks. 13

14 Membership Profile Municipal Pension Plan Employers Active 178,738 63% Health Sector % Community Social Services % Retired 71,056 25% Cities, Districts, Towns, Villages and Regional Districts % Inactive 32,669 12% This chart shows how many members are in the Plan and their group s percentage of the Plan as a whole. Other % School Districts 60 7% Group % Colleges 22 2% This chart shows the breadth of plan employers. The Municipal Pension Plan includes members in many different sectors throughout the province. Net Assets Available for Benefits ($ Billions) $22.0 $3.9 $24.5 $4.1 $27.0 $4.6 $28.0 $4.4 $31.1 $4.6 $18.1 $20.4 $22.4 $23.6 $ Net Assets Available for Benefits Net Assets Available for Inflation and other Benefits The Plan s net assets have increased steadily since, following the economic downturn of that year. 14

15 New Pensions 2003 year ended December 31 Post-Retirement Pre-Retirement Long-Term Limited Limited Disability to Regular* Member* Member* Disability Survivor Deferred Pension Total 3, , , ,686 3, , , ,782 3, , , , , , , , , , , ,521 * Prior to new limited members were included as part of new regular pensions. This table shows the number and type of new pensions issued each year since New Regular Pensions (by Age at Retirement) Groups 1, 3 and 4 (regular retirement age 65) subdivided by years of service Years of Service Total < to to to to to and up Total , ,528 Average Service Average Age at Retirement 61 This table is important because it shows the largest segment of people in receiving pensions from the Municipal Pension Plan in these groups are those with fewer than 10 years service in the Plan. New Regular Pensions (by Age at Retirement) Groups 2 and 5 (regular retirement age 60) subdivided by years of service Years of Service Total < to to to to to and up Total Average Service Average Age at Retirement 56 This table is important because it shows the largest group of people in receiving pensions from the Municipal Pension Plan in these groups are those with more than 30 years service in the Plan. 15

16 Percentage of New Regular Pensions (Total 165) by age at retirement (regular retirement age 60) year ended December 31, % % Percentage of New Regular Pensions (Total 3,528) by age at retirement (regular retirement age 65) year ended December 31, ,529 43% % % % % This chart shows the age groups of members with a normal retirement age of 60 who retired in % This chart shows the age groups of members with a normal retirement age of 65 who retired in. New Regular Pensions (Total 165) by years of service (regular retirement age 60) year ended December 31, % % % New Regular Pensions (Total 3,528) by years of service (regular retirement age 65) year ended December 31, < % % % % % <10 5 3% % This chart shows that the largest group of members with a normal retirement age of 60 receiving new pensions in had more than 30 years service % % % % This chart shows that the largest group of members with a normal retirement age of 65 receiving new pensions in had fewer than 10 years service. 16

17 Number of Members Inactive, Inactive, Vested and Active Non-Vested Deferred Retired 178,738 14,307 18,362 71, ,990 13,748 17,628 66, ,061 13,747 17,470 63, ,869 13,256 16,973 59, ,394 12,547 16,013 56, ,134 11,714 14,815 53, ,474 10,729 14,153 50, ,376 9,705 13,091 47, ,043 9,339 11,878 44, ,267 8,583 10,065 41,681 This table shows how the Plan is growing in the different member groups. Number of Members ,596 41,681 10,065 8, ,175 44,915 11,878 9, ,823 47,651 13,091 9, ,022 50,666 14,153 10, ,542 53,879 14,815 11, ,923 56,969 16,013 12, ,915 59,817 16,973 13, ,681 63,403 17,470 13, ,335 66,969 17,628 13, ,463 71,056 18,362 14, , , , , , , , , , , Active Vested Inactive Retired This chart shows the growth of the four types of members active, vested, inactive and retired between 2003 and. Number of Active Members by Sector Number of Employers Members Cities, Districts, Towns, Villages and Regional Districts ,494 Health Sector ,666 School Districts 60 23,645 Colleges 22 5,695 Group ,552 Community Social Services 205 9,527 Other 139 5,159 Total ,738 This table shows which sectors members are working in. 17

18 Pensions in Pay 2003 year ended December 31 Basic Cost-of-Living Pension Adjustment Total Pension Total New Pensions Payments Payments Payments Pensions Terminations in Force ($ Millions) ($ Millions) ($ Millions) 5, , , ,686 1,120 66, , , , , , , , , , , , , , , , , , This table is important because it shows that the number of new pensions issued each year has increased since 2003, though the economic downturn in caused a two-year dip in the number of members retiring and receiving a new pension. Total Regular Contributions by Employer Sector year ended December 31, ($ Millions) Ratio of Active Members to Retired Members 2.8 Health Sector $384 52% Cities, Districts, Towns, Villages and Regional Districts $172 23% School Districts $70 10% 2.5 Group 5 $43 6% Community Social Services $27 4% Other $22 3% Colleges $18 2% The health and municipal sectors make up about 80 per cent of contributions from all employers. This chart shows that the number of retired members is slowly catching up to the number of active members. The smaller the ratio gets, the less flexible the Plan s ability to manage poor investment returns. Real Estate by Location Ontario 35.2% BC 16.6% Quebec and Maritimes 6.0% International 5.5% Prairies 36.7% This chart shows the location of the real estate investment as a percentage of the total fair value. 18

19 Top Ten Holdings Total Canadian Equities* Market Value Per Cent of Total Company ($ Thousands) Canadian Equity Royal Bank of Canada $ 277, Toronto-Dominion Bank 259, Bank of Nova Scotia 207, Suncor Energy Incorporated 172, Canadian National Railway Company 129, Bank of Montreal 125, Enbridge Incorporated 111, Potash Corporation of Saskatchewan 106, TransCanada Corporation 104, BCE Incorporated 102, Total Top 10 $1,596, Total Canadian Equities* $4,870, * Excludes strategic infrastructure and investment public equities. Total Global Equities Market Value Per Cent of Total Company ($ Thousands) Global Equity Apple Incorporated $ 164, Chinese State-Controlled Companies** 124, Exxon Mobil Corporation 122, Google Incorporated 84, Microsoft Corporation 83, General Electric Company 77, International Business Machines Corporation 74, Johnson & Johnson 73, Procter & Gamble Company 71, Samsung Electronics Company Limited 71, Total Top 10 $ 947, Total Global Equities $9,201, Total Emerging Markets Equities Market Value Per Cent of Total Company ($ Thousands) Emerging Markets Equity Chinese State-Controlled Companies** $ 112, Housing Development Finance Corporation Limited 42, British American Tobacco Plc. 41, Samsung Electronics Company Limited 37, HDFC Bank Limited 36, Fomento Economico Mexicano SAB de CV 32, Anheuser-Busch InBev SA 29, ITC Limited 27, SAB Miller Plc. 25, Indian State-Controlled Companies** 25, Total Top 10 $ 410, Total Emerging Markets Equities $1,527, ** As of April 1,, company exposures are based on the ultimate parent company exposure regardless of where the security is listed or traded. As a result, the client exposure report shows Chinese state-controlled companies as one of the top exposures because the ultimate parent company for many companies in China is the Chinese government. State-controlled companies in India are treated similarly. The advantage of this change is that the exposure report will aggregate the company risk more accurately. These tables are important because they show the holdings where the Plan has invested the largest amount of its assets. 19