The Provident10 Investment Team is responsible for assisting the Board of Directors (the Board) in developing the investment strategy as set out in our Statement of Investment Policies and Procedures (SIP&P). The overall objective of the investment strategy is to invest Public Service Pension Plan (the Plan) assets in a manner that maximizes returns within an acceptable level of risk to meet our pension obligations. The goal of the investment strategy is to produce a well diversified portfolio of both public and private market investments which will ultimately support benefit security.
The key step in achieving our investment objective is to set the appropriate asset mix for the Plan. The Plan’s strategic asset mix policy was established based on an asset-liability analysis that took into consideration the Plan’s liabilities, the Board’s risk tolerance, and the long-term return requirements. The Sponsor Body approved the Board’s recommended strategic asset mix policy in January 2019. The new strategic asset mix reflects many changes from our previous policy, including increased allocations to non-traditional asset classes.
The new policy includes four broad asset class categories: Equities, Fixed Income, Real Assets, and Absolute Return.
As the asset mix policy contains allocations to asset classes with restricted liquidity that take several years to implement, the current asset mix allocation reflects a transition policy. The following chart reflects the strategic and current asset mix of the Plan as of June 30, 2019.
The Investment Team oversees the strategy and selects investment management firms that meet the Board’s criteria to implement specific mandates.
As the Board continues its multi-year journey to achieve long-term financial sustainability for the Plan, the Investment Team will continue to work on implementing an investment portfolio designed to maximize returns at low volatility levels.