Queen’s Pension PlanAnnual General Meeting

December 4, 2015

Agenda

• Members of Queen’s Pension Committee• Summary of Pension Plan Membership• True vs. Paid Pensions• Financial Position of Queen’s Pension Plan – Going Concern Basis• Financial Position of Queen’s Pension Plan – Wind-Up/ Solvency Basis• Historical Employee and Employer Contributions• Pension Plan Asset Reconciliation• University Pension Project Update• Summary of Plan Assets at August 31, 2015• Returns Compared to Benchmark and BNY Mellon’s Universe• Returns Compared to Other Canadian University Pension Plans• Manager Presentation: Burgundy Asset Management • Questions

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Members of Queen’s Pension Committee

• Appointed by Memberso James MacKinnono Bill Cannono Peggy Hauschildto Alison Morgano Lewis Johnsono Kelly Sedore

• Appointed by Board of Trusteeso David Graceo Don Raymondo Peter Copestakeo Kathryn Busho Jill Wagman

• Ex Officioo Daniel Woolfo Barbara Palko Caroline Daviso Al Ortho Jim Leech

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Summary of Pension Plan Membership

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Active Deferred

Pensioners and

Survivors

Total

At August 31, 2014 3,722 1,668 2,128 7,518New entrantsReturn to active statusMarriage breakdowns

22311

3 

22311

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Terminations        o Transfers/lump

sum(45) (52) (97)

o Deferred pensions (146) 146 - Deaths (9) - (67) (76)Retirements        o Pension option (98) (24) 122 - o Lump sum (8) - - (8)New beneficiaries  Other - - - -At August 31, 2015 3,650 1,738 2,186 7,574

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True vs. Paid Pensions (projecting at 6%)

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Base monthly pension through Aug31/07: $2,934.66

Current year return (as at August 31, 2015): 2.7682% Going forward: 6%

Plan Year Fund return Excess interest (EI) True pension + EI

2007-08 -4.3700% 2.2266% $3,000.00

2008-09 -7.8877% -4.2469% $2,872.60 95.8% of $3,000 (paid) pension

2009-10 6.8470% -4.7409% $2,736.41 91.2% of $3,000 (paid) pension

2010-11 6.3370% -5.9794% $2,572.79 85.8% of $3,000 (paid) pension

2011-12 5.5286% -3.4859% $2,483.10 82.8% of $3,000 (paid) pension

2012-13 14.5535% 2.2571% $2,539.15 84.6% of $3,000 (paid) pension

2013-14 17.7093% 4.9094% $2,663.81 88.8% of $3,000 (paid) pension

2014-15 2.7682% 3.9669% $2,769.48 92.3% of $3,000 (paid) pension

2015-16 6.0000% 4.0895% $2,882.74 96.1% of $3,000 (paid) pension

2016-17 6.0000% 1.9743% $2,939.65 98.0% of $3,000 (paid) pension

2017-18 6.0000% -0.8174% $2,915.62 97.2% of $3,000 (paid) pension

2018-19 6.0000% 0.0000% $2,915.62 97.2% of $3,000 (paid) pension

True pension

Paid pension

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True vs. Paid Pensions (projecting at 8%)

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Base monthly pension through Aug31/07: $2,934.66

Current year return (as at August 31, 2015): 2.7682% Going forward: 8%

Plan Year Fund return Excess interest (EI) True pension + EI

2007-08 -4.3700% 2.2266% $3,000.00

2008-09 -7.8877% -4.2469% $2,872.60 95.8% of $3,000 (paid) pension

2009-10 6.8470% -4.7409% $2,736.41 91.2% of $3,000 (paid) pension

2010-11 6.3370% -5.9794% $2,572.79 85.8% of $3,000 (paid) pension

2011-12 5.5286% -3.4859% $2,483.10 82.8% of $3,000 (paid) pension

2012-13 14.5535% 2.2571% $2,539.15 84.6% of $3,000 (paid) pension

2013-14 17.7093% 4.9094% $2,663.81 88.8% of $3,000 (paid) pension

2014-15 2.7682% 3.9669% $2,769.48 92.3% of $3,000 (paid) pension

2015-16 8.0000% 4.6052% $2,897.02 96.6% of $3,000 (paid) pension

2016-17 8.0000% 2.9881% $2,983.58 99.5% of $3,000 (paid) pension

2017-18 8.0000% 0.6676% $3,003.50 100.0% of $3,003.50 (paid) pension

2018-19 8.0000% 2.0000% $3,063.57 100.0% of $3,063.57 (paid) pension

True pension

Paid pension

Financial Position of Queen’s Pension Plan:Going Concern Basis ($000’s)

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August 31, 2011 August 31, 2014AssetsMarket value of assets $1,315,319 $1,765,373 Smoothing adjustment $19,686 ($98,609)Net assets at market value $1,335,005 $1,666,764

LiabilitiesMarket value of:

-  DC accounts $593,045 $778,794 -  Past service accounts $24,908 $25,874 -  Voluntary accounts $37,047 $41,532

Present value of accrued benefits:-   Active members $55,646 $66,263 -   Pensioners/survivors $750,770 $873,151 -   Non-Reduction Reserve $56,755

Total liabilities $1,461,416 $1,842,369

Surplus (deficit) ($126,411) ($175,605)

Financial Position of Queen’s Pension Plan:Solvency Basis ($000’s)

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August 31, 2011 August 31, 2014Assets Market value of assets $1,315,319 $1,765,373 Termination expense ($2,000) ($2,000)Net assets at market value $1,313,319 $1,763,373

Liabilities Market value of:

-         DC accounts $593,045 $778,794 -         Past service accounts $24,908 $25,874 -         Voluntary accounts $37,047 $41,532

Present value of accrued benefits:

-         Active members $112,509 $129,182 -         Pensioners/survivors $878,079 $1,073,366 - Deferred Indexing Reserve $20,436

Total liabilities $1,645,588 $2,069,184

Surplus (deficit) ($332,269) ($305,811)

Historical Employee and Employer Contributions

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Plan-year ending Employee Money

Purchase Contributions

Employer Money Purchase Contributions + Current Service Cost (Minimum

Guarantee)

Employer Special Payments

(Going Concern)

August 31, 2016 $23,218,000 $24,760,000 $20,716,000 Est.August 31, 2015 $22,372,532 $23,929,160 $15,048,990August 31, 2014 $21,754,562 $23,528,441 $15,122,154August 31, 2013 $18,689,080 $23,005,776 $14,577,212August 31, 2012 $15,062,572 $23,168,013 $12,567,901August 31, 2011 $13,557,562 $22,112,862 $5,610,469August 31, 2010 $13,883,399 $21,863,095 $5,610,469August 31, 2009 $12,975,638 $24,404,559 $2,434,387August 31, 2008 $12,423,090 $23,838,676 $0August 31, 2007 $11,489,632 $20,662,343 $0August 31, 2006 $10,710,705 $17,458,416 $0August 31, 2005 $10,049,206 $18,072,437 $0August 31, 2004 $9,393,765 $12,016,807 $0

Pension Plan Asset Reconciliation ($000’s)

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September 1, 2014 $ 1,766,123

PLUSMembers’ DC contributions 22,373 University’s DC contributions 18,707 University’s Minimum Guarantee contributions 5,637 University’s Past Service contributions 14,634 Voluntary contributions 1,297 Past Service contributions 7 Transfers from other plans 1,593 Investment return 53,883

LESSPensions paid (83,406)Lump-sums paid (11,576)Administration fees (5,254)

August 31, 2015 $ 1,784,018

Gross rate of return 3.25%Rate of return net of expenses 2.77%

University Pension Project Update

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• Sector Jointly Sponsored Pension Plan• Solvency Funding Exemption• Mediated Governance and Design

Sessions

Summary of Pension Plan Assets (‘000)at October 31, 2015

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Canadian Equity

Global Equity

Fixed

Income

Real Estate

Infra-structu

reTotal Assets

Percent of Total Assets

Burgundy$149,12

4$149,12

4 8.3%Guardian $78,628 $78,628 4.4%Connor, Clark, & Lunn $83,768 $83,768 4.7%TD Asset Management $3,534 $3,534 0.2%

Letko, Brosseau $51,648 $88,350 $71,595 $211,59

3 11.8%

Manning & Napier $180,331 $180,33

1 10.0%

Orbis $196,572 $196,57

2 10.9%

State Street $187,786 $187,78

6 10.4%Connor, Clark, & Lunn

$131,355

$131,355 7.3%

PIMCO$144,39

9 $144,39

9 8.0%TD Asset Management

$135,406

$135,406 7.5%

Integrated Private Debt

$103,188

$103,188 5.7%

Real Estate – Oxford $89,369 $89,369 5.0%Infrastructure - Borealis $94,409 $94,409 5.2%Cash/FX Hedging $9,002 0.5%

Total Assets$336,70

2$653,23

7$585,9

43 $89,369$94,40

9$1,798,

660 100.0%% of Total Assets 20.4% 36.3% 32.6% 5.0% 5.2% 100% 100.0%

QPP Returns Compared to Benchmark &BNY Mellon’s Universe of Canadian Pension Plans

• At September 30th, 2015:

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3 Months 1 Year 4 Years 10 Years

Queen’s -3.7% 2.6% 10.9% 6.1%

Benchmark -2.7% 6.3% 9.9% 5.8%

BNY 1st quartile -1.0% 7.8% 11.7% 6.8%

BNY Median -2.0% 5.9% 10.8% 6.3%

BNY 3rd quartile -2.7% 4.0% 9.9% 5.9%

QPP Returns Compared to Other Canadian University Pension Plans

• CAUBO survey results, as at December 31, 2014:

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1 year 2 years

4 years

10 years

Queen’s 8.5% 13.8% 9.2% 7.0%Assets > $500M* 11.5% 13.4% 9.5% 7.1%

Assets $150M-$500M* 10.1% 12.6% 8.7% 6.8%

Assets $30M-$150M* 10.4% 12.8% 8.5% 6.9%

All Plans Equally Weighted 10.8% 12.9% 9.0% 6.9%

All Plans Dollar Weighted 11.8% 13.5% 9.1% 6.5%

* Equally weighted average

Questions?Thank You

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