Pension funds have the ability to replicate the ongoing tax-free economics of income trusts through a “carve out,” which allows them to hold private trusts in their private equity portfolios, the organization says.
The Public Sector Pension Investment Board will make good use of this exception in its recently announced purchase of Telesat Canada from BCE, says CAITI.
“Telesat will be the financial equivalent of an income trust and will be held in the pension plan’s growing private equity portfolio,” the organization writes in a press release. “PSP’s investment in Telesat will not be taxed in the manner that [Finance Minster Jim] Flaherty would tax such an investment in an individual’s RRSP.”
For a previous story on CAITI, click here.
To read PSPIB buys stake in Telesat from BCE, click here.
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