Federal pension fund hurt by writedowns
The pension fund that invests the money intended to provide for the retirement of federal employees, the military and RCMP, has taken a $920-million charge to account for faltering financial investments in the 2008 financial year.
The Public Sector Pension Investment Board's annual report released Tuesday said the writedowns caused it to report a negative return for the year ended March 31, 2008.
The fund said it wrote down $450 million of its $1.97 billion in asset-backed commercial paper, and $470 million of its $1.4 billion in collateralized debt obligations, a financial asset based on a portfolio of fixed income investments.
But the report said "the possibility of recovering the nominal investment value in a subsequent period is probable if general credit conditions improve."
The effect of the writedowns was to reduce the return for the year by 2.4 percentage points, to -0.3 per cent.
The fund was worth $39 billion at March 31, up from $35 billion at the end of fiscal 2007.
It gets about $4 billion a year in contributions from members and the federal government.
There is a plan working its way through the Ontario courts that is intended to enable smaller investors to recover the full value of their asset-backed commercial paper, and bigger investors to get replacement investments.
0 comments:
Post a Comment