Ontario Teachers' Pension Plan funding shortfall grows - Action News
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Ontario Teachers' Pension Plan funding shortfall grows

Teachers' Pension Plan reports $10.8B in investment income in 2004, but funding shortfall grows

The massive Ontario Teachers' Pension Plan said Tuesday its investment income for last year came in at $10.8 billion, down from $11.4 billion a year earlier, and its funding shortfall continued to widen.

The plan, which administers the pensions of Ontario's 158,000 elementary and secondary school teachers and 97,000 retired teachers, saw its net assets rise to $84.3 billion last year from $75.7 billion in 2003.

Despite strong investment returns, the plan said its funding shortfall continued to grow.

"Low interest rates may be good for your mortgage or car loan, but they are hard on pension plans," said Claude Lamoureux, the fund's president and CEO.

"Low rates mean this pension plan must have more money in the fund today to be prepared to pay pensions 70 years from now," he added.

An actuarial valuation at Jan. 1, 2005, showed that the plan's future pension benefits were 84 per cent funded, down from 94 per cent a year earlier.

In 2003, the pension plan was 102 per cent funded.

The valuation, conducted by Mercer Human Resource Consulting, was done to determine whether the plan's current benefit and contribution levels can fully cover the cost of future pension benefits for all current plan members.