The CAAT Pension Plan has shown strong growth and solid funding in its latest financial report. For 2024, the plan had an annual net return of 15.2% and a funded status of 124%. It also has $6 billion in funding reserves to protect against market and demographic changes.
Asif Haque, CAAT’s Chief Investment Officer, and Evan Howard, Chief Pension Officer, say the success is due to long-term thinking and operational discipline. “The CAAT Pension Plan is resilient,” said Haque. “There’s $6 billion of reserves to help us weather the storm that we’re in right now or potential storms in the future.”
Over the past 10 years, the plan has had a net return of 9.6% per year.
“Our active management program was quite successful. We’ve outperformed our policy benchmark by over one and a half percent per year over those last 10 years,” noted Haque. Howard says that while annual results like those in 2024 are important, CAAT’s safeguards and steady membership growth are key to its continued success.
Membership increased by 17.5% in 2024. In 2024, the plan’s public equities returned over 20%. The private equity portfolio had a return of 16%, while commodities and credit allocations had returns of 10% and 11%.
Haque and Howard say these results are part of a long-term strategy, not impulsive moves. CAAT has started to shift more toward real assets, aiming for a 25% allocation.
Caat’s long-term investment strategy
Haque explained that real assets, like real estate and infrastructure, provide stability and long-term value. “It’s the combination of private assets where value is recognized over the long term, and our owners and operators can have a long-term view and not shift based on the winds of the market at any given moment,” said Haque. He added that these assets have built-in inflation protection, which is helpful given recent economic changes.
CAAT’s strategy also includes expanding its network of external partners, using both fund investments and co-investments. This approach is used in both private equity and real assets. “We’ve had that sort of external partnership model in our portfolio for a long time now.
The results have been positive and we’re quite happy with that model,” said Haque. Despite the strong performance, CAAT remains aware of potential risks. Trade disputes, especially between the US and China, are creating uncertainties in markets.
While acknowledging these factors, Haque remains focused on the long term, building a portfolio that improves plan health over many years. “Yes, we’re concerned about what’s happening with tariffs and their impact on markets,” he said. “But our focus really is looking out to the long term, building a portfolio of assets that will enhance plan health over the very long term.” He emphasized the importance of staying alert to find opportunities amid economic turmoil.
In summary, CAAT’s success is deeply rooted in disciplined, long-term investment strategies and proactive management. This ensures the plan’s resilience and growth even in challenging economic times.
Image Credits: Photo by Gabrielle Henderson on Unsplash
