How big an impact has the credit crunch had on Canadian pension funds?
Most readers will identify the credit crunch with non-bank sponsored asset backed commercial paper(NBABCP). Investors in NBABCP were under the belief that they could convert it to cash or another similar product at the end of 30 or 60 days but instead found that they couldn’t. This caused cash flow difficulties for some investors. These investors, in conjunction with their suppliers, are working together to form a solution. The newspapers have identified certain pension plans and other investors who have been affected by non-bank sponsored asset backed commercial paper(NBABCP). Is this a widespread problem? No. But it is an issue for those investors who invested in NBABCP. In general, all pension plans have been impacted by the widening of credit spreads. Credit spread widening was expected since spreads were extremely low. Pension plan investors continually look for ways to improve returns and reduce risk in all types of environments. The Mission of PIAC is “to promote sound investmen
