HOOPP Approves Pension Increases For Active Members
HOOPP is pleased to announce that the Board of Trustees has approved a pension increase for members who are active in the Plan on January 1, 2023. More details can be found here.
HOOPP’s mission is to deliver on the pension promise by providing stable and secure retirement income to the healthcare workers of Ontario, now and for decades to come. As part of this, HOOPP prudently manages the fund to ensure long-term stability while striving to deliver excellent service and benefits to members.
“We know that the last few years have been very challenging for our members,” said President & CEO Jeff Wendling. “We are proud to be able to offer this benefit improvement that will increase active members’ lifetime pension and provide even greater peace of mind in their retirement years.”
For retired and deferred members, the Board previously approved in 2022 a cost-of-living adjustment (COLA) of 4.8% for 2021.
The Board has also approved contribution rates for members and employers; they will remain stable until at least the end of 2024. HOOPP has been able to maintain low and affordable contribution rates, in part, by running very efficiently. Operating costs are just 0.32% of assets, which is among the lowest of Canadian pension plans.
Wendling added: “HOOPP members can continue to feel confident in their future as they belong to one of the strongest pension plans in Canada.”
When people ask me what are the most important things about a pension, I tell them straight out:
- Is your pension plan well funded? Are there enough assets to cover long-dated liabilities?
- Is your pension well managed, do they internalize costs as much as possible?
- Is the governance of the plan solid, placing members interests first?
- Are the risks of plan shared among retired and active members?
By all these measures, HOOPP is an outstanding pension plan.
In 2021, HOOPP gained 11.3% net and achieved a funded status of 120%. Its 10-year annualized performance is 11.06%. I covered these results here.
A fully funded status and outstanding long-term performance is why HOOPP is able to pass those gains on to its members in the form of a cost-of-living adjustment (COLA).
Now, let's delve into the details of what the latest increases mean for HOOPP's members:
As a HOOPP member, you belong to one of Canada’s strongest pension plans. Our sole mission is to fulfil our pension promise by providing secure and reliable retirement income to our members. That’s why we are pleased to share that, supported by the Plan’s strong funded status, HOOPP’s Board of Trustees has approved an increase to your pension.
Here’s what you need to know
Eligible members active in the Plan on or after January 1, 2023, will now receive a larger lifetime pension for each year of contributory service before 2023.* This increase builds on previous improvements announced in 2017 and 2021. That means you’ll get even more from your pension!**
What if you’re about to retire or leave your HOOPP employer?
If you leave your HOOPP employer(s) after June 1, 2022, you’ll receive the improvement effective January 1, 2023, if you meet one of the following criteria:
- You started your pension between July 1, 2022, and January 1, 2023.
- You were eligible to start your pension (age 55 or older) when you left your employer(s) and remain a deferred member as of January 1, 2023.
Note that eligible members will be able to view their updated pension estimates including the benefit improvement, on HOOPP Connect after January 1, 2023.
That’s not all. Based on HOOPP’s Plan strength, the Board has decided to keep contribution rates stable until at least the end of 2024; our contribution rates are some of the lowest when compared to similar pension plans. HOOPP also approved a 2021 COLA of 4.8% for our retired and deferred members.
We recognize the last few years have been challenging, and we are pleased that the Plan is in a position to provide our members with an increased lifetime pension and greater peace of mind in retirement.
If you have any questions, we’re here to help. Contact our Member Services team.
*Eligible members will receive a lifetime pension based on 1.9% of their average earnings up to the average year’s maximum pensionable earnings (AYMPE) for contributory service before 2021 and based on 2% for contributory service in 2021 and 2022.
**Members who retire before age 65 will receive a monthly bridge benefit from HOOPP, along with their lifetime pension. Since eligible members will receive a larger lifetime pension as a result of this improvement, the bridge benefit will be adjusted. This means that when the bridge benefit ends at age 65, members will see less of a change in their overall pension from HOOPP.
†These examples use approximate amounts and assume retirement at age 65 on January 1, 2023.
There is a lot to dissect here but you have to give HOOPP and its Members Services team an A+ for communicating it effectively and clearly.
The most important point is the recently announced increase to benefits builds on previous improvements announced in 2017 and 2021.
Moreover, HOOPP's Board has decided to keep contribution rates stable until at least the end of 2024 and their contribution rates are some of the lowest when compared to similar pension plans. HOOPP also approved a 2021 COLA of 4.8% for its retired and deferred members.
In the example of what this increase translates to they give an example of a member working full-time earning $60,000 with 5, 10 and 20 years of service and it translates into an increase of $865, $1310 and $2200 per year on average.
This is great news for HOOPP's active members and retired and deferred members will enjoy COLA.
And that is really what the value of a good pension is all about, not just for the good times but also for the tough times when the going gets tough and cost of living is squeezing people hard.
Back in March, HOOPP's CEO Jeff Wendling told Institutional Investor they are ready for inflation.
I like what Jeff states in the press release: “HOOPP members can continue to feel confident in their future as they belong to one of the strongest pension plans in Canada.”
There is nothing like knowing you belong to one of the best defined-benefit plans in the world and the healthcare workers of Ontario can rest assured their pension plan is extremely well managed in their best interests. They deserve nothing less.
In other important news, Benefits Canada reports HOOPP just unveiled updated plans to reduce emissions in its real estate portfolio:
The Healthcare of Ontario Pension Plan is planning to reduce the greenhouse gas emissions of its $20 billion real estate portfolio.
According to a new report on the pension fund’s website, the HOOPP is committing to reducing its real estate portfolio’s greenhouse gas emissions entirely by 2050 for assets under its control. To do this, it’s identified three key factors expected to help the organization reach its target.
The first factor is the need to set interim goals in order to reach its overarching goals. As an interim target, it will aim to cut emissions for its real estate assets to 50 per cent of their 2019 levels by 2030. “We selected 2030 as our end-year because it is a medium-term time horizon that provides the right balance of urgency with sufficient time to plan and invest in energy reduction and decarbonization. Setting interim targets is necessary to ensure we are on pace to achieve the fund’s long-term goal of net-zero carbon emissions by 2050.”
The second factor is the pursuit of an engagement strategy aimed at securing the buy-in of multiple stakeholders, including its various independent property managers. So far, this strategy has included the release of a quarterly newsletter on sustainability. Its sustainability committee has also reached out to stakeholders through regular calls with property managers designed to generate support for and an understanding of the HOOPP’s targets.
The third factor is to help each property management team prepare each part of the portfolio for carbon reduction. To do this, the HOOPP has created a custom emissions planning tool to be used by each property management team. “The tool included property baseline emissions and allowed managers to forecast future greenhouse gas reductions based on grid decarbonization and planned investments such as energy efficiency projects, on-site solar installations or purchases of renewable energy credits.”
In 2022, the HOOPP will also pursue four new strategies to further its overall emissions reduction goal. It will implement systems to monitor the execution of carbon reduction plans at individual properties, integrate emissions reductions opportunities into capital planning, establish an emissions reduction strategy for new developments and one for acquisitions.
In response to the new report, Shift Action for Pension Wealth and Planet Health, a charitable organization that tracks the fossil-fuel and climate-related investments of Canadian pension funds, welcomed the new plan and called for the HOOPP’s efforts to reduce emissions to be broadened to apply to the entirety of its $114-billion portfolio.
It also criticized the plan for only applying to buildings over which the HOOPP has operational control, but praised its targets as being “a significant mid-term commitment on the path to net zero.
“While the real estate carbon reduction goal does not take into account scope 3 emissions and covers the emissions from only those buildings over which HOOPP has operational control, the target is a significant mid-term commitment on the path to net zero across the fund’s entire portfolio. It’s a clear demonstration of progress to see HOOPP set an absolute emissions target instead of the emissions intensity targets typical of Canadian pension funds and their real estate subsidiaries.”
Between you and me, the folks at Shift Action for Pension Wealth and Planet Health will not be satisfied unless every large pension in Canada divests from oil & gas and only invests in green energy.
I'm not saying their criticism is always misdirected, but they're acting like the environmental police on Canada's large pensions and that's just plain wrong as they're not equipped to present the full context and facts.
As far as the HOOPP Real Estate Sustainability Report on HOOPP’s sustainability strategy and performance in areas such as energy, waste, water, carbon emissions, as well as engagement with managers, tenants and other stakeholders to stakeholder engagement to foster sustainable business practices for the long term please take the time to read it here.
Below, some highlights from the report:
As a Canada-model defined benefit plan, HOOPP’s mission is to deliver on our pension promise by providing members with secure retirement income for life. HOOPP acts in the best interests of all our members in administering and managing the Plan to fulfil this commitment.
We integrate sustainability principles in our management practices and across our real estate portfolio, which encompasses over 75 million square feet of office, retail, residential and industrial space across Canada, the United States and Europe. Our real estate portfolio includes over 215 properties as well as indirect investments, such as funds. As of December 31, 2021, real estate assets were valued at $20.1 billion, up from $15.5 billion in 2020. This represents 17.5% of the HOOPP Fund’s total net assets.
In this report, learn about the sustainability highlights from 2021 within HOOPP's real estate portfolio, our Pillar Scorecard, which is our primary tool for tracking and reporting portfolio-level sustainability performance, what we're doing to support HOOPP’s net-zero goal and case studies that demonstrate excellence and leadership in sustainability.
I know HOOPP's Real Estate portfolio is in excellent shape and I have full confidence in their ability to carefully reduce the greenhouse gas emissions of this portfolio over time.
They have always been investing in energy efficient buildings because it made a lot of great business sense and now they're taking it a step further to commit to cutting emissions for its real estate assets to 50% of their 2019 levels by 2030.
Alright, let me wrap it up there.
Below, to express their gratitude for healthcare workers and our pride in serving their members, HOOPP employees share their personal stories of how healthcare workers have touched their lives.
I love this, too many people working at our pensions forget to make the link back to their members.
As I keep reminding my readers, pensions are first and foremost about people. Never lose sight of this.
Update: Ten HOOPP property managers were recognized for their sustainability, innovation and leadership:
From creating urban gardens with beehives to developing an app that optimizes HVAC efficiency, the property managers of the buildings within HOOPP’s real estate portfolio once again demonstrated a commitment to innovation and sustainability in 2021. Since 2012, HOOPP has honoured over 110 property managers for their property initiatives and sustainability solutions at the LEAP Awards, all in the spirit of advancing sustainability across our real estate portfolio.
At this year’s LEAP Awards, 10 HOOPP property managers were recognized for their work in the areas of sustainability, innovation, and leadership. In addition to the existing categories, a new award was introduced this year: the Industrial Leader Award, to recognize that all types of properties play a role in the health and vibrancy of communities. The full list of categories is below.
“HOOPP’s real estate management partners continue to surpass our expectations,” said Eric Plesman, Head of Global Real Estate. “Year after year, they continue to help us deliver on the goal of responsible stewardship, which is a key component of both our real estate strategy and HOOPP’s overall Sustainable Investing approach.”
He added: “Being able to engage our partners in this way allows HOOPP to make a positive difference in our global portfolio footprint while also driving positive change in the industry at large.”
Accompanying this year’s awards was the release of HOOPP’s 2021 Real Estate Sustainability Report. HOOPP reports each year on progress in areas such as energy, waste, water and carbon emissions, as well as engagement with our tenants and the communities where our properties are located.
HOOPP is a global leader in sustainable real estate practices and we aim to make a positive difference through our global portfolio footprint – more than 75 million square feet of office, retail, residential and industrial space at more than 215 locations across Canada, the United States and Europe. At the same time, HOOPP’s real estate portfolio continues to outperform its financial benchmarks.
Plesman said: “Sustainable investing and maximizing returns for our members go hand in hand. Being able to fulfil the pension promise to our more than 400,000 members is a driving factor in our decision to prioritize sustainable real estate investing across the portfolio.”
Learn more about HOOPP’s sustainability efforts.
As I stated, HOOPP's Real Estate portfolio is in excellent shape and the organization is a global leader in sustainable real estate practices.