The Alberta Teachers' Retirement Fund (ATRF) was recently named Canada's fourth fastest-growing pension fund, in addition to being ranked 20th out of the country's top 100 pension funds in terms of assets, according to the annual Benefits Canada magazine report.
"Growth has been a key story for us in recent years," said Rod Matheson, ATRF's CEO. "We have experienced very good investment returns over the last several years. These rankings reflect the growth we have experienced, and the steps we've taken to build on our asset portfolio."
Over the past four years, ATRF's investment portfolio earned an annual average return of 11.8 per cent. In particular, non-public assets, including real estate, infrastructure and private equity have contributed to strong investment returns. Over the past four fiscal years, real estate provided a 10.6 per cent return; infrastructure provided 12.1 per cent; and private equity returned 12.7 per cent.
Demographics also play an important role in ATRF's asset growth. While ATRF has a lengthy history – having been established almost 80 years ago – it is also a young pension plan, demographically-speaking. This is because pre-1992 liabilities are the responsibility of the Alberta government.
"It's as if our plan came into existence in 1992. We collect more money in contributions from plan members than we need to pay out in pensions," says Derek Brodersen, ATRF's Chief Investment Officer. "This provides us with a net cash inflow of about $500 million a year. That's a big contributor to our growth in assets. For example, if we had a zero investment return, our plan would still grow by that same $500 million a year."
As ATRF's investment portfolio becomes larger and more complex, it continues to add skilled, expert staff to our investment team. In fact, the investment team has grown from eight people in 2010, to 40 investment professionals today.
"As we continue to grow on the investment side, we will continue to ensure we have the right expertise to support this growth," says Matheson. "By 2020, we forecast our asset value to grow to $20 billion. To put this projected growth in context, ATRF's asset value in 2010 was $5.5 billion."