Parkland Institute’s latest report Can AIMCo Be Fixed? demonstrates how the UCP government’s changes to the Alberta Investment Management Company’s (AIMCo) governance and its poor performance has eroded trust in the agency.
Report author Dr. Robert Ascah, former director of the Institute for Public Economics and a former Alberta Treasury official, says, “AIMCo now has a government-granted monopoly to manage the investments for nearly half a million Albertans who need to trust in the investment decisions of their pensions. AIMCo’s recent poor investment performance demonstrates that major policy changes to improve its governance and performance are required if we are going to fix AIMCo.”
The report examines the investment performance of AIMCo and shows how, particularly in recent years, AIMCo was not a top performer compared to other major public pension fund managers based in British Columbia, Ontario and Québec. An Alberta Teachers’ Retirement Fund (ATRF) report found that if AIMCo had managed ATRF’s investments over the past seven years, $1.3 billion of value would have been lost.
Jason Schilling, president of the Alberta Teachers’ Association says, “Teachers contribute more than half of the money into the teachers’ pension plan. We expect that teachers would have authority then over how those funds are invested and the best way to achieve that is through a joint governance body, like the ATRF, having full control over the plans. While the recent agreement between the ATRF and AIMCo addresses many concerns, further governance improvements should be made to AIMCo and this report provides clear and strong recommendations on what those should be.”
In the report Ascah notes, “Trust in the governance of pension plans and in the investment management done on behalf of pension plan members and beneficiaries is critical to the pension bargain. Unfortunately, this trust has been seriously eroded through legislative and regulatory actions taken by the United Conservative Party (UCP) government.”
“Pension funds like the ones managed by AIMCo are not piggy banks for whatever government’s pet projects. They are workers’ livelihoods,” says AUPE Vice-President Mike Dempsey. “We have a responsibility as workers who own these funds, to make sure we have strong pensions for our future and for our children and grandchildren.”
The report's five recommendations identify improvements including: remove the Alberta government as sole owner of AIMCo with majority board membership appointed by pension boards, increase board diversity, and eliminate AIMCo's monopoly.
Parkland Institute is a non-partisan public policy research institute in the Faculty of Arts at the University of Alberta. Can AIMCo Be Fixed? is available for download on the Parkland Institute website.
Executive Director, Parkland Institute