Actuarial Valuation of the Pension Plan as at July 1, 1998
Actuarial Valuation of the Pension Plan as at July 1, 1998
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.
When conducting a valuation on a going-concern basis, the relationship is determined between the respective values of assets and accumulated benefits, assuming the Plan will be maintained indefinitely.
FINANCIAL POSITION
The results of the valuation as at July 1, 1998, in comparison with those of the previous valuation as
at July 1, 1997, are summarized as follows:
| JULY 1, 1998 | JULY 1, 1997 | |
| Actuarial Value of Assets | ||
| (adjusted for in-transit amounts) | $836,931 | $732,280 |
| Actuarial Liability | ||
| present value of accrued benefits for: | ||
| Active Members | $321,504 | $307,506 |
| Pensioners & Survivors | $244,203 | $234,265 |
| Deferred Pensioners | $1,701 | $1,264 |
| Additional Voluntary Contributions | $90 | $100 |
| Inactive - Status Undecided | $10,832 | $8,540 |
| Total Liability | $578,330 | $551,675 |
| FUNDING EXCESS | $258,601 | $180,605 |
The estimated value of the benefits that will accrue on behalf of the active members during 1998/99, in comparison with the corresponding value determined in the previous valuation as at July 1, 1997, is summarized on the next page.
| JULY 1, 1998 | JULY 1, 1997 | |
| Total Current Service Cost | $20,988 | $20,647 |
| Estimated members' required contributions | $5,570 | $ 5,605 |
| Estimated employer's current service cost | $15,418 | $15,042 |
| Employer's current service cost expressed as a % of members' contributions | 277% | 268% |
MEMBERSHIP DATA: Plan membership data is summarized below.
| JULY 1, 1998 | JULY 1, 1997 | |
| Active Members | 2,736 | 2,731 |
| Pensioners and Beneficiaries | 994 | 970 |
| Deferred Pensioners | 60 | 54 |
| Inactive-Status Undecided | 279 | 251 |
| TOTAL MEMBERSHIP | 4,069 | 4,006 |
| UNIVERSITY | QUARTERS ENDING | ANNUAL RATES | LONGER PERIODS |
|---|
| Sep 1997 | Dec 1997 | Mar1998 | June 1998 | Year Ending June 98 | Jun94- Jun95 | Jun95 -Jun96 | Jun96-Jun97 | Jun96- Jun98 | Jun95-Jun98 | Jun94-Jun98 | |||
| 2 yrs | 3 yrs | 4yrs | |||||||||||
| Queen's | 6.4 | (2.4) | 7.7 | 0.9 | 12.8 | 12.8 | 13.7 | 22.1 | 17.4 | 16.1 | 15.3 | ||
| York | 5.7 | (2.2) | 8.4 | (0.0) | 12.0 | 13.2 | 13.3 | 19.2 | 15.6 | 14.8 | 14.4 | ||
| McMASTER | 5.6 | 0.1 | 8.0 | 1.1 | 15.4 | 16.2 | 14.2 | 21.7 | 18.5 | 17.1 | 16.8 | ||
| Carleton | 6.3 | (2.6) | 7.7 | 0.6 | 12.1 | 14.3 | 13.2 | 20.9 | 16.4 | 15.3 | 15.1 | ||
| Brock | 5.3 | (0.4) | 8.3 | 0.8 | 14.4 | 12.5 | 12.2 | 18.6 | 16.5 | 15.1 | 14.4 | ||
| Waterloo | 6.4 | (2.1) | 7.9 | 0.4 | 12.9 | 12.6 | 14.5 | 22.3 | 17.5 | 16.5 | 15.5 | ||
| Windsor | 4.7 | (2.4) | 7.1 | (0.4) | 9.0 | 13.3 | 13.2 | 19.9 | 14.3 | 14.0 | 13.8 | ||
| TSE | 9.8 | (4.4) | 13.3 | (2.2) | 16.3 | 15.3 | 14.0 | 30.2 | 23.1 | 20.0 | 18.8 | ||
| S&P500 | 7.5 | 6.5 | 13.1 | 6.8 | 38.3 | 24.1 | 25.1 | 36.5 | 37.4 | 33.2 | 30.8 | ||
| Long TermBonds | 7.6 | 4.2 | 4.1 | 3.2 | 20.5 | 21.3 | 11.1 | 21.0 | 20.7 | 17.4 | 18.4 | ||
| Mid TermBonds | 4.7 | 1.2 | 2.9 | 1.1 | 10.2 | 17.9 | 10.7 | 14.8 | 12.5 | 11.9 | 13.4 |
Prepared by William M. Mercer Limited.
| MARKET | VALUE | POLICY | ASSET | MIX | |||||||
| Jun97 | Sept97 | Dec97 | Mar98 | Jun98 | Min | Bench | Max | ||||
| % | % | % | % | % | % | % | % | ||||
| EQUITIES | |||||||||||
| Canadian (JF/Linc) | 17.4 | 17.2 | 16.2 | 16.5 | 16.7 | ||||||
| Canadian (Index) | 12.3 | 12.9 | 11.7 | 12.4 | 12.1 | ||||||
| TOTAL Canadian | 29.7 | 30.1 | 27.9* | 28.9 | 28.8 | 25 | 35 | 60 | |||
| U.S. (JF/Linc) | 10.6 | 10.5 | 11.3 | 11.7 | 11.4 | 10 | |||||
| U.S. (Derivative)*** | 6.4 | 6.6 | 5.1 | 5.4 | 5.5 | ||||||
| Non-N.A. | 9.8 | 9.6 | 9.3 | 9.8 | 10.1 | 10 | |||||
| TOTAL Foreign | 26.8 | 26.7 | 25.7 | 26.9 | 27.0 | 10 | 20 | 25** | |||
| TOTAL Equities | 56.5 | 56.8 | 53.6* | 56.8* | 55.8 | 35 | 55 | 75 | |||
| FIXED INCOME | |||||||||||
| Bonds (JF/Linc) | 24.6 | 25.6 | 25.2 | 25.7 | 25.1 | ||||||
| Bonds (Index) | 14.2 | 14.1 | 14.5 | 13.9 | 14.1 | ||||||
| TOTAL Bonds | 38.8* | 39.7 | 39.7 | 39.6 | 39.2 | 25 | 42 | 50 | |||
| Cash | 4.7 | 3.5 | 6.7* | 4.6* | 5.0 | 0 | 3 | 15 | |||
| TOTAL Fixed Income | 43.5 | 43.2 | 46.4* | 44.2* | 44.2 | 25 | 45 | 65 | |||
| TOTAL FUND | 100.0 | 100.0 | 100.0 | 100.0 | 100.0 |
The market value of the Fund increased from $895.3 million on March 31 to $898.8 million on June 30, 1998 after accounting for net cash withdrawals of $6.6 million. Lincluden's portfolio declined as a percentage of the Fund in the second quarter, while Jarislowsky's portfolio increased, primarily because Jarislowsky had better performance than Lincluden.The above table provides the breakdown of the Fund by asset class. The foreign content, at 27.0%, remains above the Policy maximum of 25.0%, due mostly to the superior performance of US and non-North American equities last quarter compared to Canadian stocks and bonds.
Prepared by James P. Marshall, Inc.