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Infrastructure Supports OTPP Portfolio Returns
The $117 billion Ontario Teachers’ Pension Plan (OTPP) infrastructure portfolio returned 7.7 percent, one of the top performers in a portfolio that, overall, gained 11.2 percent for the year. Infrastructure is included in a real assets allocation, which also includes real estate and timberland.
The plan said its net asset base reached an “all-time high” in 2011, with its 11.2 percent rate of return adding to its managed capital. The OTPP pointed out its strong performance staved off the “crisis of confidence and market volatility” resulting from the debt crisis in Europe.
Despite the positive returns, the plan sponsor has raised contribution rates and lowered benefits to balance the fund as persistent low real interest rates and changing demographic trends continue to affect the plan.