Quebec scraps probe of pension fund loss: report

Wed Mar 4, 2009 2:32pm EST
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OTTAWA (Reuters) - The province of Quebec scrapped plans on Wednesday for a parliamentary investigation into how the country's biggest pension fund lost a record C$39.8 billion ($31 billion) in 2008, public broadcaster Radio-Canada said.

The Liberal provincial government announced the investigation last week, shortly after the Caisse de depot et placement du Quebec revealed the loss. The Caisse, an arm's length agency that manages investments for public and private Quebec pension funds, blamed tumbling stock prices and a weakened Canadian dollar for the loss.

Opposition parties, however, blamed the Liberals, saying the government had insisted the Caisse take on riskier investments to boost its returns.

Radio-Canada quoted provincial Finance Minister Monique Jerome-Forget as saying she had been unable to agree terms for the investigation with the opposition Parti Quebecois.

"I am now in a problem-solving mode. I've gone past this stage," she told reporters. The Parti Quebecois accused her of trying to stifle the probe.

The government has already announced it will replace several of the Caisse's board members and find a new permanent chief executive.

Last month, the fund's new head resigned for medical reasons, after just four months on the job. Interim Chief Executive Fernand Perreault said last Monday he did not want the job on a permanent basis.

($1=$1.28 Canadian)

(Reporting by David Ljunggren; Editing by Peter Galloway)

<p>A man walks out of the Caisse de depot et placement du Quebec head office in Quebec City February 25, 2009. REUTERS/Mathieu Belanger</p>