In 2017, the funded ratio increased to 94%, up from 93% in 2016, marking the fifth year in a row of improvement. OMERS 2020 Strategy aims to return the Plan to full funding on a smoothed basis by 2025 and we remain on course.
Contribution rates and benefits are of utmost importance. Contributions were unchanged in 2017, and they remain at current levels in 2018. The current average contribution rate paid by members is 10.7% and is matched equally by employers.
Our target is to reduce the real discount rate to 3.75%. The real discount rate is used to calculate the present value of future pension obligations. In 2017, OMERS reduced the real discount rate by 20 basis points to 4.00%. This step was taken to reduce the risk of future contribution rate increases and to provide greater stability for future benefit levels. OMERS reduces the real discount rate when there is positive Plan experience – when actual results are better than OMERS long-term actuarial assumptions.