McMaster's Pension Plan
Last year several members asked the Association to provide information regarding the performance of the McMaster Pension Plan. We complied and are pleased to be able to do so again this year.
The purpose of the report is to inform the University regarding the funded status of the Pension Plan and the contribution requirements for the year following the valuation date and to provide the documentation prescribed by the Pension Commission of Ontario and Revenue Canada.
FINANCIAL POSITION
The results of the valuation as at July 1, 1996 in comparison with those of the previous valuation as at July 1, 1995, are summarized as follows:
| JULY 1, 1996 | JULY 1, 1995 | |
| Actuarial Value of Assets | ||
| (adjusted for in-transit amounts) | $678,594 | $613,754 |
| Actuarial Liability | ||
| present value of accrued benefits for: | ||
| Active Members | $296,302 | $346,221 |
| Pensioners & Survivors | $210,519 | $154,203 |
| Deferred Pensioners | $ 856 | $ 977 |
| Additional Voluntary Contributions | $ 357 | $ 333 |
| Inactive - Status Undecided | $ 9,957 | $ 6,688 |
| Total Liability | $517,991 | $508,422 |
| FUNDING EXCESS | $160,603 | $105,332 |
| JULY 1, 1996 | JULY 1, 1995 | |
| Total Current Service Cost | $20,452 | $23,803 |
| Estimated members' required contributions | $ 5,880 | $ 5,728 |
| Estimated employer's current service cost | $14,572 | $18,075 |
| Employer's current service cost expressed as a % of members' contributions | 248% | 316% |
| JULY 1, 1996 | JULY 1, 1995 | |
| Active Members | 2,819 | 3,011 |
| Pensioners and Beneficiaries | 900 | 786 |
| Deferred Pensioners | 49 | 50 |
| Inactive-Status Undecided | 254 | 237 |
| TOTAL MEMBERSHIP | 4,022 | 4,084 |
| UNIVERSITY | QUARTERS ENDING | ANNUAL RATES | LONGER PERIODS |
|---|
| Sep 1995 | Dec 1995 | Mar 1996 | June 1996 | Year Ending June 96 | Jun92- Jun93 | Jun93 -Jun94 | Jun94- Jun95 | Jun94- Jun96 | Jun93- Jun96 | Jun92- Jun96 | |||
| 2 yrs | 3 yrs | 4yrs | |||||||||||
| Queen's | 2.2 | 4.5 | 3.8 | 3.3 | 14.5 | 11.7 | 5.1 | 12.8 | 13.7 | 10.7 | 11.0 | ||
| York | 2.1 | 4.6 | 3.9 | 2.1 | 13.3 | 14.9 | 4.2 | 13.2 | 13.2 | 10.1 | 11.3 | ||
| McMASTER | 2.4 | 5.5 | 2.4 | 3.2 | 14.2 | 13.7 | 2.9 | 16.2 | 15.2 | 10.9 | 11.6 | ||
| Carleton | 1.6 | 4.9 | 4.1 | 2.0 | 13.2 | 15.7 | 3.6 | 14.3 | 13.7 | 10.2 | 11.6 | ||
| Brock | 1.6 | 4.8 | 2.3 | 3.0 | 12.2 | 18.5 | 2.6 | 12.5 | 12.3 | 9.0 | 11.3 | ||
| Waterloo | 2.2 | 4.9 | 4.5 | 2.2 | 14.5 | 17.6 | 2.2 | 12.6 | 13.5 | 9.6 | 11.6 | ||
| TSE | 0.6 | 4.7 | 6.0 | 2.1 | 14.0 | 20.8 | 4.0 | 15.3 | 14.6 | 11.0 | 13.4 | ||
| S&P500 | 5.6 | 7.9 | 4.9 | 4.7 | 25.1 | 21.6 | 9.4 | 24.1 | 24.6 | 19.3 | 19.9 | ||
| Long TermBonds | 3.6 | 7.5 | (2.6) | 2.4 | 11.1 | 16.6 | (3.4) | 21.3 | 16.1 | 9.2 | 11.0 | ||
| Mid TermBonds | 3.1 | 5.7 | (0.5) | 2.1 | 10.7 | 13.5 | (1.5) | 17.9 | 14.2 | 8.7 | 9.9 |
Prepared by William M. Mercer Limited.
| MARKET | VALUE | POLICY | ASSET | MIX | |||||||
| Jun95 | Sept95 | Dec95 | Mar96 | Jun96 | Min | Bench | Max | ||||
| % | % | % | % | % | % | % | % | ||||
| EQUITIES | |||||||||||
| Canadian (Seg) | 20.2 | 18.8 | 18.5 | 17.7 | 16.8 | ||||||
| Canadian (Pool) | 11.9 | 10.7 | 10.7 | 11.2 | 11.3 | ||||||
| TOTAL Canadian | 32.1 | 29.5* | 29.2 | 28.9 | 28.1 | 25 | 35 | 60 | |||
| U.S. (Seg) | 10.6 | 9.5 | 10.1 | 10.5 | 10.7 | 10 | |||||
| U.S. (Derivative)*** | 5.1 | 5.5 | 5.5 | 5.7 | 5.8 | ||||||
| Non-N.A. | 9.1 | 9.3 | 9.3 | 9.5 | 9.6 | 10 | |||||
| TOTAL Foreign | 24.8 | 24.3 | 24.9 | 25.7 | 26.1 | 10 | 25** | ||||
| TOTAL Equities | 56.9* | 53.8* | 54.1 | 54.6 | 54.2 | 35 | 55 | 75 | |||
| REAL ESTATE | - | - | - | - | - | 0 | 0 | 10 | |||
| FIXED INCOME | |||||||||||
| Bonds (Seg) | 25.0 | 27.5* | 26.7 | 26.6 | 26.5 | ||||||
| Bonds (Pool) | 14.7 | 14.9 | 15.0 | 14.6 | 14.6 | ||||||
| TOTAL Bonds | 39.7 | 42.4* | 41.7 | 41.2 | 41.1 | 25 | 42 | 50 | |||
| Cash | 3.4 | 3.8 | 4.2 | 4.2 | 4.7 | 0 | 3 | 15 | |||
| TOTAL Fixed Income | 43.1 | 46.1* | 45.9 | 45.4 | 45.8 | ||||||
| TOTAL FUND | 100.0 | 100.0 | 100.0 | 100.0 | 100.0 | ||||||
| Foreign Content (by Book Value) | 17.5% | 16.4% | 16.6% | 17.1% | 17.0% |
There was no major change in the asset mix during the latest quarter. The overall equity content was 54.2% at the end of June 1996 which was just below the policy benchmark level of 55%. However, because of the asset mix strategies of Jarislowsky and Lincluden, Canadian equities were underweighted (28.1% vs 35.0%), and U.S. equities overweighted (16.5% vs 10.0%). Finally, the Fund's cash reserve position of 4.7% was above the policy benchmark of 3.0%.
Prepared by James P. Marshall, Inc.