CANADA - Alberta has become the first province to allow its pension funds the permanent right to use letters of credit (LOC) to fund solvency deficiencies.
It should also be dated and issued by an approved bank.
Watson Wyatt warned pension funds these instruments could not be used to determine a scheme's solvency or funded ratio, but money committed to schemes through an LOC could be considered as assets to establish its solvency deficiency.
Alberta followed the federal government and Quebec in allowing LOC financing, but these two front runners only introduced it in 2006 as a temporary measure.
Quebec is set to make the legislation permanent in 2010.
This week's edition of Professional Pensions is out now.
Industry Voice: Sponsored by Eaton Vance
BNY Mellon has launched a range of reporting tools to help institutional investor clients track and evaluate portfolio investments based on environmental, social and governance (ESG) issues.
PP speaks to BESTrustees director Heather McGuire about her views on the CMA's review into the investment consultant and fiduciary management markets.