CANADA - Staff at the Healthcare of Ontario Pension Plan (HOOPP) could soon be compensated for how well they match liabilities.
In an interview with Global Pensions, HOOPP president and chief executive John Crocker said two months ago, the board of the C$36bn ($36.5bn) pension fund started to discuss how they can better compensate investment staff for matching assets to liabilities.
"If you're running a 60/40 asset mix, the more you beat the S&P, we'll incent you more. As you move to LDI, our key objective is not to beat the S&P or other pension plans...Our objective is to beat our liabilities," said Crocker. He said the board is working through "how you describe success and how you reward success".
HOOPP started moving assets more heavily into fixed income as part of an LDI approach back in late 2007. According to the most recent annual report available on HOOPP's website, as of 31 December 2009, the pension fund invested 54.3% in fixed income, 11% in real estate, 5% in private equity and the rest mainly in domestic and international equities.
He said he hopes HOOPP will settle on some new type of compensation structure for staff involved with LDI by the end of the year.
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