1. Carleton University Retirement Plan Update Carleton University Retirees Association February 2, Betsy Springer Director, Pension Fund Management

2. Agenda Pension Fund Returns New Investment Managers
Update on Financial Position
Expected Changes to Ontario Regulation
Responsible Investing

3. Pension Fund Investment Returns
Market value of assets
June 30, ,102.8
June 30, ,219.2
January 31, ,268.1
Investment returns, years ending June 30 %

4. New Investment Managers
Emerging Markets Equity – William Blair
Based in Chicago
Initial Mandate of C$50 million
Global Small Cap Equity – Brandes Investment Partners
Based in San Diego
Initial Mandate of C$60 million

5. Asset Class Allocation, January 2018
Percent
Asset Class
of Total
Canadian Equities 30
Canadian Fixed Income 20
Global Equities:
Large cap
Emerging Markets 5
Small cap
US High Yield Debt 4
Global Infrastructure 6
100

6. Solvency funding relief
Approved for stage 3 relief, October 2016
Special payments will be $12.6 million annually for three years.
Without Stage 3, special payments would be $34.3 million annually.

7. Expected Changes to Ontario Regulations
New framework for funding of pension plans
Eliminates solvency funding for plans that are at least 85% funded
However, a new “provision for adverse deviations” will be required and must be funded
For Carleton, this could be about 10% of pension plan liabilities (i.e. accrued benefits)
Expect large special payments to continue.

8. University Sector Plan
Exploratory work on this continues
First draft suggests that a sector plan would be expensive for Carleton (both members and university)
Governance implications are a concern

9. Responsible Investing
Carleton has had a policy in place for many years
Posted on Pension Fund Management website
Based on best practices (United Nations Principles for Responsible Investing)
Policy does not include divestment
Policy requires investment managers to incorporate analysis of environmental, social and governance (“ESG”) issues into the investment decision-making process.

10. Questions?