CANADA - The Ontario Teachers' Pension Plan added C$13.3bn ($13.9bn) in investment income in 2010, the highest in its history, but continues to face severe funding woes.
The pension fund returned 14.3%, beating its target benchmark of 9.8%. Total assets reached C$107.5bn at the end of 2010.
But chief executive Jim Leech said the pension fund continues to "face serious funding challenges".
The deficit is expected to hit C$17.2bn in 2011 from C$17.1bn, despite record income.
Leech said: "The root cause of the C$17.2 billion preliminary funding shortfall is a combination of factors: member longevity, retirement periods that exceed working years, low real interest rates, which reflect lower economic growth going forward, and the maturity of the plan, which now receives C$1.8 billion less in contributions than it pays out annually."
The plan sponsors, the Ontario Teacher's Federation and the Ontario government, have to file a recovery plan with regulators by 2012 outlining how it plans to solve the deficit problem.
This week's edition of Professional Pensions is out now
Collective defined contribution (CDC) schemes will need clear and transparent governance frameworks, as well as effective communication strategies, to be a success, the Work and Pensions Committee (WPC) has been told.
The aviation sector's constant evaluation of mistakes to improve safety should be applied to defined benefit schemes, as too many are making the same mistakes again and again, latest research shows.
A month of strikes are due to hit 64 universities from tomorrow over major reforms to the Universities Superannuation Scheme (USS).