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Teacher Newsmagazine Volume 19, Number 6, April 2007

Teachers' pension plan

Where’s the money?

Trustees of the Teachers’ Pension Board of Trustees have a duty to ensure that all investments remain prudent investments in the plan. The board’s Statement of Investment Policies and Procedures outlines the board’s position on investments. As well, the board evaluates fund performance at every board meeting.

On December 31, 2006, the total unaudited Teachers’ Pension Plan assets totalled $12.9 billion, with another $2.9 billion earmarked for indexing. Fund earnings for last year, net of investment costs, were 15.1% for the Basic Account and 15.0% for the Inflation Adjustment Account (IAA).

Where was the money, and how did it do so well?

Where invested % of Fund Return Rate %
Short-term bonds 2.8 3.9
Gvt and Corp. bonds 17.0 3.8
Index-linked bonds 4.6 -2.6
Mortgages 3.9 5.1
Canadian equity 16.2 18.2
US equity 17.2 15.2
Foreign equity 21.3 25.9
Real estate 12.4 26.0
Private placements 3.4 n/a
Total 100% 15.1%

The top 10 equity holdings, as a % of the total equity holdings:

Canada % of Cdn Total % of Total Equity
Royal Bank of Canada 4.8 1.3
Manulife Financial 4.5 3.8
Suncor Energy Inc 4.2 1.2
Bank of Nova Scotia 4.0 1.2
TD Bank 3.8 1.1
Encana Corporation 3.6 1.0
Bank of Montreal 2.4 0.7
CIBC 2.3 0.7
CN Railway 2.1 0.6
Petro Canada 2.0 0.6
USA % of US Total % of Total Equity
General Electric 2.7 0.8
Exxon Mobil Corp 2.5 0.8
Citigroup Inc. 2.2 0.7
Microsoft Corp. 1.9 0.6
Bank of America 1.9 0.6
AT & T Incorporated 1.8 0.5
JP Morgan Chase 1.4 0.4
Proctor & Gamble 1.3 0.4
Altria Group 1.3 0.4
Pfizer Incorporated 1.3 0.4
Non-North American Equity % of NNA Total % of Total Equity
Total 1.7 0.7
Royal Dutch Shell 1.4 0.6
HSBC Holdings 1.2 0.5
BP PLC 1.2 0.5
ENI 1.1 0.4
Vodafone Group 1.1 0.4
Roche Holdings Ag 1.1 0.4
Nestle SA 1.0 0.4
Novartis AG 1.0 0.4
Toyota Motor Corp. 1.0 0.4

The estimated $16 billion in the Plan’s Basic and Inflation Adjustment Accounts is a lot of money, but it is spread around various asset classes and among various opportunities within each asset class such that the total pension fund is not over-exposed to any one bond, stock, or other form of asset-property.

Tax deducting the cost of purchase of service

For information about reinstatement of service and the tax implications, go to www.bctf.ca/SalaryAndBenefits.aspx?ed=4790, click on Pensions, then click on Tax deducting purchase of service.


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