Endowment Payout Rate for fiscal 2013, to be distributed in April, 2013

PDAD&C# 48, 2012-13

To:  Principals, Deans, Academic Directors and Chairs
Divisional Business Officers via AMS listserv
Divisional Financial Officers via DFO listserv
From:     Sheila Brown, Chief Financial Officer
Date:  March 21, 2013
Re:  Endowment Payout Rate for fiscal 2013, to be distributed in April, 2013 

The endowment payout rate for 2013 will be $7.56 per unit, which is the same as the payout per unit that was made last year. This is the rate that was projected in the Budget Report for 2013-14. This payout represents 4.67% of the opening market value of the endowments, close to the upper end of the 3% to 5% corridor that is in place, and the distribution will provide a total of about $69.2 million to beneficiaries.

Although investment returns thus far this year are better than those for 2012 (which totaled 1% for that year), endowments have not yet recovered from the losses that occurred in 2008-09. The inflation protection reserve for endowments collectively is still well short of the amount needed to provide full inflation protection and the majority of individual endowment funds continue to report market values that are less than the funds originally contributed to those endowments. As a result, a study will be undertaken during this year to assess the continued financial prudence of the current payout amount and its underlying methodology.

More information on endowments is available in the endowment annual financial report, which is accessible at http://www.finance.utoronto.ca/alerts/endowrpts.htm. If you have any questions about the payout for this year, please contact Helen Choy, Manager Accounting Services, at 416-978-2981. The annual payout for 2013 will be distributed by Friday April 19, 2013.