April 22, 2020
There have been a number of recent media articles regarding the performance of the PSPP fund’s legislated investment manager, Alberta Investment Management Corporation (AIMCo). PSPP Corporation is aware of AIMCo’s performance as we receive regular reporting and communicate frequently with AIMCo.
The recent investment performance will not impact your pension benefit. Your defined benefit pension is based on a formula that reflects your salary and the number of years you contribute to the PSPP. That is the benefit of a defined benefit pension plan, such as PSPP. There are no changes to contribution rates being contemplated. Contribution rates are based on long-term funding requirements and are not directly affected by short-term market performance.
There has been an extreme decline in global investment markets arising from the global outbreak of the COVID-19 virus and the drastic drop in oil prices, that has affected all investors. AIMCo’s volatility trading strategy, which suffered losses, was one of the strategies within the diversified PSPP fund. The PSPP fund is invested globally in a wide variety of asset classes in accordance with the long-term investment policies and guidelines approved by the PSPP Corporation Board of Directors. Quarterly PSPP investment performance summaries are published on our website once results are received from AIMCo. Investment performance summaries from the last four quarters can be found under Funding & Investment Publications.
While the PSPP fund has suffered losses in the short term, it is well positioned to meet the long-term return objectives to ensure plan benefits are funded in compliance with the legislated funding structure. PSPP is secure for the long term.
Our main priority is delivering on the pension promise. We will continue to carefully monitor the impact of the markets on the PSPP fund throughout the COVID-19 pandemic.