When will Canada’s $12.5 billion pension fund pay its employees?
The Canadian Pension Plan Investment Board is looking to increase its share of the company’s portfolio.
The board has been in discussions with its U.S. counterpart, the American Public Investment Company, about buying the pension fund and using the proceeds to repay its creditors, according to people familiar with the matter.
It is not clear how much the Canadian pension fund would be required to pay to buy the company, the people said.
In a statement, PPIB said that it had not yet begun discussions with the pension plan.
The company, which has more than $1 trillion in assets under management, said last month it would close the retirement funds of more than 3,000 pension plans.
The U.K. firm said in a report this month that it would be considering a sale.
PPIBs assets are worth about $4.6 billion.
But the PPIs board, which is comprised of the CEOs of private companies, is largely owned by government and is in line with most international pension plans, which allow the managers of pension funds to hold control over the companies they manage.
That means the boards decisions on how to invest in companies are subject to the advice of outside advisers.
The PPI’s decision-making is influenced by how much money is being put into the pension funds and the risk that the companies will default on their promises, according a person familiar with PPI board matters.
A PPI report last year said it had concerns about the value of the Canadian company’s pension fund holdings and that the Canadian government’s decision to hold onto the money could be hurting the fund’s ability to meet its obligations.
That was the first time that PPI has said it has considered selling the pension plans of other large Canadian companies.
The Canadian government announced in July that it was delaying a decision on a sale of its pension fund.
A separate PPI review of the P&P’s assets this year showed that it may need to raise additional capital to maintain the fund at current levels, the person familiar said.