February 16, 2021

AIMCo Walked Away from Negotiations with ATRF in November

The Alberta Investment Management Corporation (AIMCo) pulled out of negotiations with the Alberta Teachers’ Retirement Fund (ATRF) in the weeks before the finance minister signed a ministerial order giving AIMCo the veto it was seeking in negotiations.

A new posting on the ATRF website says that, “in mid-November AIMCo advised the ATRF in writing that it was ceasing negotiations.”

The ATRF and AIMCo had spent several months trying to negotiate an investment management agreement (IMA) as required by Bill 22, the law which forces the ATRF to use AIMCo as its exclusive investment manager. Although the extended deadline for negotiations passed on October 31, the ATRF reported that they believed a negotiated agreement was within reach in November. The website update says that the ATRF reached out to AIMCo and the finance ministry to try to bring AIMCo back to the table, but negotiations did not resume and have not resumed since the finance minister imposed his IMA.

“The ATRF welcomes the opportunity to resume discussions with AIMCo to resolve the outstanding items where we were unable to reach agreement,” says the ATRF posting. “However, the ATRF continues to believe that the plans are best served when the investment manager has clear accountability for implementing the investment policy and strategy established by the Board.”

This revelation is very concerning for ATA president Jason Schilling because ATA members have been hearing from MLAs that the ministerial order is only temporary until an IMA can be reached between the parties.

“AIMCo appears to have no interest and clearly no incentive to negotiate an agreement that gives the ATRF its appropriate control over investment decisions,” says Schilling. “The whole arrangement is a stacked deck built on deception designed to remove the control that teachers have over how their own money is invested.”

Schilling says the government claims that the move was about reducing costs, which has been exposed as uncertain. In the face of dissent, MLAs then vowed that the ATRF would retain control over investment decisions, a promise now broken by the imposed IMA. Now, says Schilling, MLAs are saying that the ATRF and AIMCo should negotiate an IMA to replace the minister’s order.

“Why would AIMCo negotiate now when they weren’t willing to do so before and the minister has already given them exactly what they want through regulation?” asked Schilling. “MLAs and the government need to stop with the deception and start listening to teachers. Our concerns are very legitimate, and nothing the government has said or written has adequately addressed them.”

Elsewhere on their website, the ATRF confirms that management of the first batch of assets has now been transferred to AIMCo. Infrastructure assets, which make up eight per cent of the plan’s asset mix, were transferred at the start of February with further transfers to occur in stages over the coming months.

The ATA has announced that it will be filing an application in court to overturn the ministerial order that imposes the IMA on the ATRF and AIMCo. The court application is expected to be filed in the coming weeks.