THE CONTRIBUTORY PENSION PLAN FUND FOR EMPLOYEES OF TRANSIT WINDSOR

(Registration Number 353821)

Notes to Financial Statements (continued)
(in thousands of dollars unless otherwise stated)

Year ended December 31, 2019 

8. Capital risk management: 

The main objective of the Plan is to sustain a certain level of net assets in order to meet the pension obligations of the Sponsor, which are not presented or discussed in these specified purpose financial statements. The Plan's assets are invested primarily with the Ontario Municipal Employees Retirement Board COMERS"). The OMERS Fund is subject to the regulations of the Ontario Municipal Employees Retirement System Act and the Pension Benefits Act (Ontario). The OMERS Fund includes investments in a variety of different asset classes including interest bearing investments, Canadian and non-Canadian equity investments and real estate investments. Increases in net assets are a direct result of investment income generated by investments held by the Plan and contributions into the Plan by the Sponsor. Employer contributions are based on the results of actuarial valuations for the Plan filed with the Office of the Superintendent of Financial Institutions Canada and the Canada Revenue Agency. The main use of net assets is for benefit payments to eligible Plan members. The Plan is required to file financial statements with the Office of the Superintendent of Financial Institutions Canada annually. 

The funding requirements of the Plan are set out in the most recently filed funding valuation report that was prepared as at December 31, 2018. That valuation revealed an excess on a going-concern basis of $5,253 (December 31, 2017 valuation - $5,883), resulting in a going-concern funding ratio of 120% (December 31, 2017 valuation - 121%). On a solvency basis, the valuation revealed an excess of $640 (December 31, 2017 valuation — deficit of $442) or a ratio of 101.7% (December 31, 2017 valuation - 98.9%). As a result of changes to federal pension regulations in 2010, solvency funding requirements are based on 3 year average solvency ratios. Further changes to federal pension regulations in 2012 expanded the ability to use letters of credit to secure solvency deficiencies as an alternative to cash contributions. The effective date of the next required actuarial valuation to be performed by Mercer (Canada) Limited, the Plan's actuary, is December 31, 2019. 

9. Financial instruments: 

(a) Fair values: 

The fair values of investments and derivatives are as described in notes 3(d). The fair values of other financial assets and liabilities, being contributions receivable and accrued liabilities, if any, approximate their carrying values due to the short-term nature of these financial instruments.