Queen’s Pension Plan Annual General Meeting December 5, 2014.

Queen’s Pension PlanAnnual General Meeting

December 5, 2014

Agenda

• Members of Queen’s Pension Committee• Summary of Pension Plan Membership• True vs. Paid Pensions• Financial Position of Queen’s Pension Plan – Going Concern Basis• Financial Position of Queen’s Pension Plan – Wind-Up/ Solvency

Basis• Pension Plan Asset Reconciliation• Summary of Plan Assets at August 31, 2014• Returns Compared to Benchmark and BNY Mellon’s Universe• Returns Compared to Other Canadian University Pension Plans• Manager Presentation: Orbis Investment Advisory (Canada)• Questions

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Members of Queen’s Pension Committee

• Appointed by Memberso James MacKinnono Bill Cannono Peggy Hauschildto Alison Morgano John Gordono Kelly Sedore

• Appointed by Board of Trusteeso David Graceo Don Raymondo Peter Copestakeo Kathryn Busho Jill Wagman

• Ex Officioo Daniel Woolfo Barbara Palko Caroline Daviso Al Ortho Jim Leech

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Summary of Pension Plan Membership

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Active Deferred

Pensioners and

Survivors

Total

At August 31, 2013 3,644 1,638 2,049 7,331New entrantsReturn to active statusMarriage breakdowns

3548 (3)

1 

35451

Terminations        o Transfers/lump

sum(44) (48) (92)

o Deferred pensions (134) 134  Deaths (5) (3) (64) (72)Retirements        o Pension option (98) (29) 127  o Lump sum (3) (13) (16)New beneficiaries   2 19 21Other (10) (4) (14)At August 31, 2014 3,722 1,668 2,128 7,518

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True vs. Paid Pensions

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Base monthly pension through Aug31/07: $2,934.66

Current year return (as at August 31, 2014): 17.7093% Going forward: 6%

Plan Year Fund return Excess interest (EI) True pension + EI

2007-08 -4.3700% 2.2266%$3,000.00

2008-09 -7.8877% -4.2469%$2,872.60 95.8% of $3,000 (paid) pension

2009-10 6.8470% -4.7409%$2,736.41 91.2% of $3,000 (paid) pension

2010-11 6.3370% -5.9794%$2,572.79 85.8% of $3,000 (paid) pension

2011-12 5.5286% -3.4859%$2,483.10 82.8% of $3,000 (paid) pension

2012-13 14.5535% 2.2571%$2,539.15 84.6% of $3,000 (paid) pension

2013-14 17.7093% 4.9094%$2,663.81 88.8% of $3,000 (paid) pension

2014-15 6.0000% 4.8214%$2,792.24 93.1% of $3,000 (paid) pension

2015-16 6.0000% 4.9450%$2,930.32 97.7% of $3,000 (paid) pension

2016-17 6.0000% 2.8133%$3,012.76 100.4% of $3,000 (paid) pension

True pension

Paid pension

Financial Position of Queen’s Pension Plan:Going Concern Basis ($000’s)

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August 31, 2011August 31, 2013 (est.)AssetsMarket value of assets $1,315,319 $1,527,573 Smoothing adjustment $19,686 ($43,815)Net assets at market value $1,335,005 $1,483,758

LiabilitiesMarket value of:

-  DC accounts $593,045 $676,481 -  Past service accounts $24,908 $24,879 -  Voluntary accounts $37,047 $38,940

Present value of accrued benefits:-   Active members $55,646 $70,901 -   Pensioners/survivors $750,770 $817,169

Total liabilities $1,461,416 $1,628,370

Surplus (deficit) ($126,411) ($144,612)

Financial Position of Queen’s Pension Plan:Solvency Basis ($000’s)

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August 31, 2011 August 31, 2013 (est.)Assets Market value of assets $1,315,319 $1,527,573 Termination expense ($2,000) ($2,000)Net assets at market value $1,313,319 $1,525,573

Liabilities Market value of:

-         DC accounts $593,045 $676,481 -         Past service accounts $24,908 $24,879 -         Voluntary accounts $37,047 $38,940

Present value of accrued benefits:

-         Active members $112,509 $123,042 -         Pensioners/survivors $878,079 $954,017

Total liabilities $1,645,588 $1,817,359

Surplus (deficit) ($332,269) ($291,786)

Pension Plan Asset Reconciliation ($000’s)

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September 1, 2013 $ 1,527,573

PLUSMembers’ DC contributions 21,754 University’s DC contributions 18,599 University’s Minimum Guarantee contributions 4,930 University’s Past Service contributions 15,122 Voluntary contributions 1,309 Past Service contributions 82 Transfers from other plans 1,262 Investment return 277,106

LESSPensions paid (80,297)Lump-sums paid (12,690)Administration fees (8,627)

August 31, 2014 $ 1,766,123

Gross rate of return 18.33%Rate of return net of expenses 17.71%

Summary of Pension Plan Assets at October 31, 2014

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Canadian Equity

Global Equity

Fixed

Income

Real Estate

Infra-structu

reTotal Assets

Percent of Total Assets

Burgundy$166,75

4$166,75

4 9.4%Guardian $82,347 $82,347 4.8%Connor, Clark, & Lunn $84,841 $84,841 4.9%TD Asset Management $3,704 $3,704 0.2%

Letko, Brosseau $56,414 $83,692 $73,486 $213,59

2 12.4%

Manning & Napier $166,106 $166,10

6 9.6%

Orbis $183,758 $183,75

8 10.6%State Street Global Advisors $175,039

$175,039 10.1%

Beutel Goodman$176,36

4 $176,36

4 10.2%

PIMCO$208,48

0 $208,48

0 12.1%Integrated Private Debt

$101,114

$101,114 5.9%

Real Estate – Oxford $82,162 $82,162 4.8%Infrastructure - Borealis $84,490 $84,490 4.9%

Total Assets$394,06

0$608,59

5$559,4

44 $82,162$84,49

0$1,728,

751 100.0%% of Total Assets 22.6% 35.2% 32.5% 4.8% 4.9% 100% 100.0%

QPP Returns Compared to Benchmark &BNY Mellon’s Universe of Canadian Pension Plans

• At September 30th, 2014:

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3 Months 1 Year 4 Years 10 Years

Queen’s 0.3% 14.3% 10.1% 7.6%

Benchmark 1.7% 15.4% 8.6% 6.8%

BNY 1st quartile 1.7% 16.2% 10.5% 7.7%

BNY Median 1.3% 15.0% 9.6% 7.2%

BNY 3rd quartile 0.8% 13.6% 8.8% 6.9%

QPP Returns Compared to Other Canadian University Pension Plans

• CAUBO survey results, as at December 31, 2013:

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1 year2

years4

years10

years

Queen’s 19.4% 14.9% 9.6% 7.3%

Assets > $500M 15.2% 12.6% 9.2% 7.0%

Assets $150M-$500M 15.1% 12.3% 8.6% 6.9%

Assets $30M-$150M 16.0% 12.3% 8.4% 6.6%

All Equally Weighted 15.1% 12.2% 8.8% 6.9%

All Dollar Weighted 15.1% 12.4% 8.8% 6.3%

Questions?

Thank You

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