Posted on Jan 27, 2021
NDP CALLS FOR THIRD-PARTY REVIEW OF AIMCO’S STRATEGY IN WAKE OF STAGGERING LOSSES
EDMONTON - Alberta’s NDP is calling for a comprehensive third-party review of Alberta Investment Management Corporation’s (AIMCo) investment strategy in the wake of highly paid investment managers losing more than half a billion dollars of Albertans’ money.
Christina Gray, NDP Critic for Labour, will call for the review at this afternoon’s meeting of the Alberta Heritage Savings Trust Fund Committee.
“Finance Minister Toews has hijacked Albertans pensions and is threatening to pull Albertans retirement savings out of CPP and hand those funds over to AIMCo,” Gray said. “He’s taking these actions despite horrendous returns at AIMCo.”
Over the past five years, the Heritage Fund has drastically underperformed and not met performance targets set by AIMCo. The targets are set relative to what investments would typically make if they were invested in a standard exchange traded fund (ETF) - known as the passive benchmark.
Over this period, AIMCo lost $522.6 million relative to the passive benchmark. At the same time, Albertans have paid out more than $57 million in compensation and bonuses to AIMCo’s most senior executive.
“Albertans would have been half a billion dollars better off if AIMCo didn’t exist and we had just given it to a bank to invest,” said Shannon Phillips, NDP Critic for Finance. “AIMCo is literally in crisis, both in terms of their financial bets and their governance decisions. It’s time to get to the bottom of this.”
Yesterday, the Alberta Teachers Association announced it was taking legal action against the Kenney government after Toews broke his promise and unilaterally gave AIMCo full control over teachers’ pensions. The new agreement fundamentally alters the governance relationships at AIMCo, and gives AIMCo a veto on all investment decisions.
During the coming legislation session, Phillips’s Alberta Investment Management Corporation Amendment Act will be debated, which would reform AIMCo’s governance structure and prevent Albertan’s CPP from being transferred to AIMCo without a public referendum.
“The UCP have proven they can’t be trusted with Albertans’ retirement savings,” said Phillips. “We need to create as much distance as we can between the UCP and Albertans’ money.”