Benchmark Performance

We measure the ongoing effectiveness of our investment strategies by comparing the actual performance of the investment portfolio to the return on the fund’s benchmark. Benchmarks for each asset class are selected by the Board and Investment Committee. The total-fund benchmark is calculated by aggregating the asset-class benchmark indices, which are weighted to reflect the fund’s policy asset mix.

The past year was a volatile one in financial markets, with economic conditions and expectations for future growth changing over the course of the year. In this relatively uncertain environment, we maintained an asset mix that was close to but slightly more conservative than policy. Overall, the total fund return exceeded the benchmark return for the year, with our Canadian equity portfolios having the largest positive impact.

The return on both the Teachers’ Pension Plan and the Private School Teachers’ Pension Plan exceeded the benchmark by 0.5% in the 2010-11 fiscal year. While the return of the two plans is the same over the past year, returns differ over longer time periods due to the influence of the loan, as noted above.

Over the five years ended August 31, 2011, the Teachers’ Pension Plan return is 0.2% below the benchmark, while over 10 years the return exceeds the benchmark by 0.2%. The Private School Teachers’ Pension Plan return is 0.2% below the benchmark over 5 years, while it is 0.1% above benchmark over 10 years.