Ontario Teacher’s Pension Plan Board: Value At Risk Harvard Case Solution & Analysis

The Ontario teacher pension plan board is the pension fund program for public school teachers in Ontario, Canada. It was established in 1989. The initial investment to run this pension plan was $100 billion CAD. It was the bulk investment to make the organization noticeable in Canada. The plan was intended to benefit the 114000 retirees and administering the pension fund to school staff and approximately 175000 teachers. The organization is liable to maintain and invest in the equity, alternative investment portfolio and fixed income. The organization also invest in the derivatives, government and corporate bonds, debentures and money market securities to utilize the utter return strategies for the fixed income portfolios. It also assesses the alternative investment strategies in terms of real estate, private businesses and infrastructure assets. The additional head office located in central HongKong, London, United Kingdom, and New York.
It is a pension program with the net assets approximately $175.6 billion. The program was designed to build a reputation worldwide for leadership and ownership in member services and investment management.The main domain of the plan is to build status for innovation and revolution.
The criteria of the OTPP is to give the entire benefits to the pensioners and eligible members to make their lives easier so that they could find their survival comfortable and relaxed. The OTPP provides and assist the eligible members if they died, leave their job, become disabled and permanently leave teaching before retirement. The optimum goal of the organization is to get the return by minimizing the appropriate level of threats and risks (otpp, 2017).
Ontario Teacher’s Pension Plan Board Value At Risk Harvard Case Solution & Analysis
What are the risks facing the OTPPB?
The risks are always associated with high profits and returns. The firm that is intended to face the risk has the ability to minimize it by designing a strategy and plans to prevent itself from them and to enjoy the ultimate profit. There are various risk associated with the organization which are as follows;
Investment risk: the investment risk of pension funds comes with three main and foremost sources; the risk in which the fund declines in value, the risk of not getting the accurate returns and profits due to the inflation factor because it impacts on the returns of the organization, last but not the least the risk which unable and hinder the growth and performance of the business because the provision of the funds does not fine enough to keep rapidity with the progress in the budget of providing the benefits to the staff, teacher and eligible members.
The management of the organization has to make sure that the funds do not get undervalued with the passage of time.
Liquidity risk:the liquidity risks are associated with the provision of funds to the teachers. The promise of pension represents the liquidity risk at the time of retirement of the teacher. The liquidity risk usuallydepends on measuring the time period of such risk. In the time period of employment, assets are collected and accumulated in the pension fund,so the risk of liquidity is relatively low............

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