ATRF's investment portfolio is structured to deliver the returns necessary to fund pension benefits over the long term. It is diversified by asset type, geography and risk profile in order to control the impact of short-term volatility in investment markets to the extent possible.
In the 2016-17 fiscal year, ATRF's investment portfolio returned 7.7% and the 4-year rate of return was 10.3%.
Over the past 15 years, the funding discount rate of the Plans was reduced to 6% from 8% as forecasts of long-term investment returns have fallen and the Board has reduced the overall funding risk of the Plans. The discount rate has been further reduced to 5.4% starting with the August 31, 2017 actuarial valuation.
As the chart below indicates, over the past 15 years ATRF's investment return of 7.3% has exceeded the average funding discount rate of 6.9%.
15-Year Return vs Long-term Funding Objective
as at August 31, 2017