Investments and Funding
In a year of global market volatility, we produced solid results for our members. Our Investments team delivered a return of 8.1%1, which contributed to maintaining a strong estimated funded status of 97% as of December 31, 2016.
In 2016, we expanded in-house management capabilities, which will continue to reduce investment costs in the years ahead, while also providing us with greater control over the assets we invest in and increased transparency.
We also moved to strengthen our investment and risk reporting, enhancing our ability to respond to market conditions and to make informed, timely investment decisions to manage the risk-adjusted return of the fund. Additionally, we developed and implemented diversification benefit reporting to help us monitor and mitigate risk across a wide range of asset classes.
Lowered the discount rate from 5.95% to 5.70% to reflect our expectations of investment returns going forward
Conducted an asset/liability (A/L) study to help optimize the Strategic Asset Allocation for liabilities/benefit structure of the Plan
Confirmed AA+ by Standard & Poor’s Rating Service and AA (high) by Dominion Bond Rating Service
Added $250 million to our bond program through a private bond financing in 2016
Brought proxy voting in-house, increasing our ability to positively influence companies we invest in
Hired a Director of Responsible Investing, improving our capacity to assess and mitigate long-term environmental, social and governance risk