Posted on Sep 15, 2020
UCP PUSH AHEAD WITH ALBERTA PENSION PLAN DESPITE NEW LOSSES AT AIMCO
EDMONTON -- The UCP are pressing ahead on their agenda to create an Alberta Pension Plan, despite devastating new information revealing additional and significant underperformance at the Alberta Investment Management Corporation (AIMCo).
The First Quarter Report of the Alberta Heritage Savings Trust Fund reveals that AIMCo experienced real losses over the past five years, relative to their own benchmarks.
“First, the UCP broke the law by withholding the annual report from the Heritage Savings Trust Fund. Now they’re trying to bury the fact that AIMCo is underperforming while telling Albertans to trust their retirement with Jason Kenney and the UCP” said Shannon Phillips, NDP Finance Critic.
AIMCo is engineered to deliver returns above the passive benchmark by 100 basis points, but they are operating 40 below that benchmark, and 140 below target, over the past five years for the Alberta Heritage Savings Trust Fund.
If the five year losses were prorated over the entire AIMCo investment portfolio, the organization would have lost more than $2 billion, and underperformed its goal by over $8 billion.
Last February, AIMCo came under fire when their volatility-based strategy lost $2.1 billion due to the economic impacts of the COVID-19 pandemic.
The UCP government has stated AIMCo is the leading candidate to act as the investment arm for an Alberta Pension Plan, despite the recent relative losses and poor performance.
The UCP government has already issued a request for proposals for a study examining how to create an Alberta pension plan. The RFP was issued on September 10th and asks for the analysis to be submitted by early 2021. The report is required to include figures regarding the contribution rate, level of benefits to be expected, and the amount of assets and liabilities Albertans would be transferred. The report is also expected to examine “how to ensure a smooth transition from CPP to an Alberta Pension Plan for pensioners and contributors, including businesses.”
“Albertans have been clear that they don’t want Jason Kenney anywhere near their retirement savings.” said Christina Gray, NDP Labour Critic. “The government's own Fair Deal Panel report showed a clear majority of Albertans did not support withdrawing from the CPP, and since then tens of thousands more Albertans have signed the handsoffmycpp.ca petition.”
In June, a government briefing note obtained by the NDP Official Opposition showed that pulling out of the Canadian Pension Plan would lead to a $133.1 billion unfunded liability that would have to be covered by Albertans.
“The UCP didn’t get the answers they wanted from the Ministry of Treasury Board and Finance, so now they’re going to spend more of Albertans' money to buy a report that delivers the answers they want,” said Gray.
“Rather than wasting more money, Jason Kenney needs to listen to the tens of thousands of Albertans who have told him to keep his hands off their CPP.”