Page Content
Buried deep in the text of the budget tabled by Finance
Minister Travis Toews last Thursday is a provision that will have the Alberta
Investment Management Corporation (AIMCo) take over control of $18 billion in
assets of the Alberta Teachers’ Retirement Fund (ATRF).
Ostensibly intended to create a “Made in Alberta” investment
portfolio, the take over will see the ATRF fund, along with those of the Alberta
Health Services and the Workers Compensation Board, placed under the control of the government
crown corporation.
Government’s decision was made without any prior consultation.
The ATRF board was informed only once the budget had been released and the
Alberta Teachers’ Association (ATA), co-sponsor of the plan, has yet to hear
anything from government about the implications of the take-over, what might lie
ahead, or why this is in the interests of teachers.
For now, the ATA is advising its active members and retired
teachers that the change should not immediately affect their pension benefits
or contribution and that they will continue to be served by ATRF staff.
“Why didn’t
they talk to us? Individual teachers
contribute half of the money that funds the plan and now will have no say over
the management of those funds. Making this decision without consulting teachers
at all makes this feel like a hijacking.”
―Jason
Schilling, ATA President
For 80 years, teachers have had joint governance over the
management of the funds held in trust by the ATRF and occupy half of the seats
on the board that governs the plan. The board has directly employed and
supervised the investment professionals who safeguard and grow the
contributions held in trust for teachers, often achieving returns on investment
that have exceeded external benchmarks and AIMCo results. Teachers are
concerned that rolling their investments into AIMCo will mean the plan will be
less able to respond to their needs and concerns, be less accountable, and
force an increase in contribution rates.
“The fact that
the government is having to force public sector pension plans, such as the
Local Authorities Pension Plan, to remain with AIMCo does not inspire
confidence. I have a lot of questions to
ask: Will the portfolio of AIMCo’s investments be prioritized to ensure the
security and sustainability of pensions or will other political considerations
hold sway? How will contribution rates for teachers be affected? Will
government continue to fund its obligations on an ongoing basis? What measures
will AIMCo take to ensure that it is responsive to teachers who would now be its
contributors and clients?”
―Jason Schilling, ATA President
Schilling indicated that the ATA is anticipating that
enabling legislation will be tabled next week. The Association will be
monitoring developments closely and considering all options available in
response.