The Canadian Press

The Ontario public-sector pension manager known as OMERS says it booked a $4.3-billion net gain on its investments for 2009, with a 10.6% rate of return on its assets that marked its move back into positive returns after a dismal performance a year earlier.

The Ontario Municipal Employees Retirement System, which is responsible for pensions for 400,000 current and former employees of local governments in Ontario, posted a net loss of $8 billion in 2008 or a 15.3% negative rate of return.

OMERS chief executive Michael Nobrega said Monday the fund took a “prudent and disciplined” investment approach last year as markets remained volatile.

“This approach ensured that we retained the flexibility to preserve capital while providing the opportunity to participate in a rebound that occurred in the equity markets later in the year,” he said.

“The performance of our private equity and infrastructure investments also provided very strong returns, reinforcing our decision to continue to expand our holdings in the private market asset classes.”

OMERS says the average rate of return for the past five years now stands at 6.6%. That’s above the five-year average benchmark return of 5.8%.

Chief financial officer Patrick Crowley said OMERS has been impacted by the downturn in the economy, which reduced the value of its net assets.

“Like the majority of the large plans, pension obligations have been increasing at a greater pace than contributions.”

Crowley said that has pulled its deficit to a deeper $1.5 billion for the year ended Dec. 31, down from a comparable $279 million the previous year.

He added that another $4.95 billion in net losses from 2008 will continue to affect its overall deficit for the next four years.

OMERS’ stock-market holdings returned 11% in the year, up from a 19.5% loss in 2008.

Investments in infrastructure were up 10.9%, private equity rose 13.9%, and real estate returned a weaker 1.3%.

The recently formed OMERS Strategic Investments division reported a 1.2% loss for the year.