OMERS lifts funded status to 99% on diversification, hedging, and real estate gains
OMERS pushed its funded status to 99 percent in 2025 while adding $8.2bn in net investment income, edging closer to its target of being more than fully funded by 2030.
OMERS, the defined benefit pension plan for Ontario’s broader municipal sector employees, reported a 2025 investment return of 6 percent, or $8.2bn, net of expenses.
Net assets rose from $138.2bn at December 31, 2024 to $145.2bn at December 31, 2025.
Over the past 10 years, the plan has averaged an annual investment return of 7.1 percent, net of expenses, adding $73.9bn and supporting a steady improvement in funded status.
Jonathan Simmons, OMERS chief financial and strategy officer, said the improvement in OMERS’ smoothed funded status to 99 percent “was attained while at the same time strengthening provisions to pay pensions by an additional $2.2bn to reflect longer life expectancies.”
He added that “Canadians—including our members—are living longer and the Plan is ready to meet their retirement needs in the decades ahead.”
Blake Hutcheson, OMERS President and CEO, framed 2025 as proof of the plan’s resilience in difficult markets.
He said OMERS’ 2025 performance showed the plan’s resilience in a turbulent market and praised his team’s disciplined investment approach, noting a 7.7 percent average annual net return over the past five years.
He added that the 2030 strategy positions the plan for further success, with a goal of $200bn in net assets by 2030 and a funding level above 100 percent.
The portfolio’s diversification across asset classes and geographies underpinned those results.
Simmons said OMERS’ portfolio delivered steady performance in 2025 despite political and economic uncertainty, with six of seven asset classes posting gains, led by a third straight year of double-digit returns from public equities and another strong year for private credit.
He added that the team continues to navigate a persistently challenging private equity market.
Real estate also turned a corner.
“We are pleased to see a recovery in our real estate portfolio, with good performance in office and retail, as the industry emerges from several difficult years,” remarked Hutcheson.
Currency volatility remained a headwind, particularly linked to the US dollar, but hedging moves softened the blow.
He said active decisions to hedge currencies added 70 basis points to returns and limited the foreign exchange drag to negative 1.3 percent, mainly because of the sharp drop in the US dollar.
Management signalled an appetite to deploy more capital domestically, subject to return and risk thresholds.
Hutcheson said OMERS, a Canadian pension plan with a long history of investing in its home market, is seeking “near-term opportunities in Canada” that align with its objectives, and that any transactions must meet its standards for managing the plan on behalf of members.
On the sustainability front, OMERS reported a 65 percent reduction in its portfolio carbon emissions intensity relative to its 2019 baseline, and grew its green investments (as defined in the OMERS Climate Action Plan) to $26bn.
A study by the Canadian Centre for Economic Analysis found that OMERS 2025 activities in Ontario generated $15.3bn in provincial GDP, supported more than 135,000 jobs and positively affected 1 in 11 households.
Hutcheson said OMERS’ role is to provide a stable source of retirement income for its members in an increasingly complex environment. He added that the plan is designed to withstand market cycles and long-term change, and that OMERS has paid pensions as promised for almost 65 years.
OMERS remains highly rated by independent credit rating agencies, with ‘AAA’ ratings from S&P, Fitch, and DBRS.
