Public and private equity and real assets contributed to the Plan’s performance
The CAAT Pension Plan reported a 10-year annualized net return of 9.6 per cent in its 2025 Annual Report, released Thursday. The Plan's one-year net return for 2025 was 8.4 per cent.
According to the report, the 10-year figure outperformed both CAAT's policy benchmark and the discount rate used to measure the long-term return needed to sustain the Plan.
"CAAT's investment program continues to deliver long-term returns that promote Plan health," said Kevin Fahey, acting CEO and plan manager and chief investment officer in a press release. "Our 2025 results only add to my confidence in the Fund."
According to its report, the Plan’s portfolio consists of 30 per cent of public equity, 25 per cent of real assets, 17 per cent of private equity, 12 per cent of nominal bonds, 8 per cent allocated to credit, 5 per cent allocated to inflation-linked bonds and 3 per cent in commodities.
“The Plan also invests in hedge funds, which are paired with passive investments in other asset classes - primarily public equities - to add value and improve the portfolio’s diversification characteristics,” CAAT said in the report.
In 2025, the Plan’s Canadian holdings made up of 23.9 per cent of assets in investments in equities, bonds and real assets.
As of January 1, 2026, the Plan held $25.4 billion in assets, up from $23.3 billion one year earlier. Its funding reserve rose to $6.7 billion from $6.1 billion over the same period. CAAT reported a funded ratio of 124 per cent, meaning the Plan holds $1.24 in assets for every dollar of pension obligations.
In 2025, CAAT paid more than $760 million to pensioners. The Plan is structured to provide beneficiaries with predictable lifetime retirement income. CAAT also made several adjustments to member benefits during the year.
Notably, CAAT extended conditional inflation protection for eligible members through 2028, a measure it has applied annually since 2007. The extension is designed to help offset the impact of inflation on pension payments over time.
CAAT also revised its survivor benefits in two ways. The minimum payment guarantee was increased from 60 times to 180 times a member's first monthly pension amount, and a 100% survivor pension option was introduced.
Additionally, two previously announced structural changes took effect. The annual pension factor for DBplus members was increased, enabling faster accumulation of retirement income without higher contributions. For DBprime members, the contribution rate was reduced while benefit entitlements remained unchanged.
Fahey acknowledged that several macroeconomic conditions that defined the past five decades - including globalization, declining interest rates, and low inflation - may no longer hold.
"The resilience of CAAT's investment program enables the Fund to withstand periods of volatility and adapt to market conditions in the short-term to manage risk and take advantage of opportunities,” noted Fahey.
He added that broader economic or sector-specific disruptions and challenges don’t affect the Plan's ability to meet its pension obligations.
Governance review nearing completion
In a separate statement, CAAT disclosed that its independent governance review is in its final stages. The Board indicated it has engaged with stakeholders including the Financial Services Regulatory Authority of Ontario (FSRA) throughout the process.
“The Board is confident that a comprehensive action plan will further strengthen governance at CAAT, reinforce accountability, and ensure continued alignment with best practices in the interests of beneficiaries,” said CAAT in a statement.
No timeline was provided for the release of the review's findings.
