Canada: Putting AIMCo in charge of teachers' pension, WCB assets a 'win win,' Crown CEO says - - PressFrom - Canada
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Canada Putting AIMCo in charge of teachers' pension, WCB assets a 'win win,' Crown CEO says

18:45  02 november  2019
18:45  02 november  2019 Source:   edmontonjournal.com

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a man wearing a suit and tie: Alberta Investment Management Corp. CEO Kevin Uebelein.© Ryan Jackson Alberta Investment Management Corp. CEO Kevin Uebelein.

Transferring management of more than $30 billion in teacher pensions and public investment funds to the Alberta Investment Management Corporation (AIMCO) would be to everyone’s benefit, says the Crown corporation’s CEO.

“This is a rare instance where, if we do this right, there’s no sacrifice,” AIMCo CEO Kevin Uebelein said in a Friday interview. “There’s an opportunity to win on all accounts.”

Alberta teachers in particular have bristled at the news the provincial government intends to introduce legislation to transfer investment management control of three large funds to AIMCo. The government wants AIMCo to manage the Alberta Teachers’ Retirement Fund (ATRF)— pegged at $16.6 billion in 2018 — along with a $10.7 billion Workers’ Compensation Board fund and $2.8-billion worth of Alberta Health Services investments, Uebelein said.

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The latter two funds aren’t pensions — organizations use them for insurance payouts or other expenses.

AIMCo currently manages about $115-billion worth of investments for 31 clients, including the $48-billion Local Authorities Pension Plan (LAPP).

In an update posted to its website Friday, LAPP said the government intends to remove the plan’s option to choose its own fund manager in 2024. LAPP leaders are also seeking a meeting with the finance minister, it said.

Efficiencies of scale

Uebelein said taking on the three new funds and adding $30-billion worth of assets to AIMCo’s $115-billion portfolio would allow the Crown corporation to attract more talented employees, invest in better technology and become more globally competitive.

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AIMCo is non-profit and only manages Alberta investments, he said. No one will get bigger bonuses or more shares or options from the moves, he said.

“All of us are doing this because we’re driven to try and do what’s right for our clients and for Alberta,” Uebelein said.

Government had not provided AIMCo a timeline for the potential transfer of control, he said.

The president of the Alberta Teachers’ Association was critical of the government’s move , saying control of the pension is being “hijacked” without consultation with teachers.

Earlier this week, the ATRF board chairwoman Sandra Johnston wrote to Finance Minister Travis Toews saying the board has “not seen any evidence that the action contemplated in the (provincial) budget will be in the best interest of our members.”

Although Toews has argued the ATRF move will save $41 million a year, Johnston’s letter said ATRF’s investments generated better returns than some of AIMCo’s and its investment choices best reflect the demographics of teachers. As it stands, ATRF  can fire under-performing fund managers, she said. Under AIMCo control, the board would be left with all of the responsibility and limited control, she said. There would also be job losses at ATRF, she said.

Client choices

Uebelein said AIMCo manages each investment according to the client’s needs. It’s near-impossible to compare investments’ performances — especially if their fiscal years don’t align, he said.

“It’s not a ‘We’re good, you’re bad’ (situation),” he said. “It’s that together, we’re much better.”

If AIMCo clients are dissatisfied, they can inform the Crown’s board, and the board can fire him, Uebelein said.

The government will not say when it intends to introduce legislation to enact the changes.

jfrench@postmedia.com

twitter.com/jantafrench

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