Finance minister appointed interim director after AIMCo board turfed
By Al Beeber - Lethbridge Herald on November 8, 2024.
LETHBRIDGE HERALDabeeber@lethbridgeherald.com
The provincial government on Thursday has appointed Minister of Finance and Treasury Board President Nate Horner to right the flailing ship of AIMCo, Alberta’s investment agency.
Horner will serve as interim sole director and chair of AIMCo effectively immediately. All AIMCo board appointments have been rescinded and a new board will be established after a permanent chair is established. That board chair will be appointed within the next 30 days.
The province said Thursday that AIMCo has for years consistently failed to meet its mandated benchmark returns and changes are being made to restore confidence in the agency.
AIMCo has experienced significant increases in operating costs, management fees and staffing without a corresponding return on investment, says the province.
There has been an increase of 96 per cent in AIMCo’s third party management fees from 2019 to 2023, a time period in which the number of employees also rose by 29 per cent and salary and benefit costs increased by 71 per cent.
The government says these increases occurred while AIMCo managed a smaller percentage of funds internally.
“AIMCo’s work has direct consequences for Albertans. While they have achieved returns for their clients, we are acting to bring a renewed focus on the best possible returns and low operating costs,” said Horner in a release.
Horner won’t be making any investment decisions or be compensated in his roles with AIMCo which the province says from 2019 to 2023 had an average 7.62 per cent annual total fund return.
In 2023, AIMCo’s operating costs were $222.3 million, up 71.38 per cent from 2019 when those costs were $129.7 million.
Last year, there were 600 employees, up from 465 in 2019 while per cent of funds managed internally dropped to 67 per cent last year from 82 per cent in 2019.
In a late-afternoon press release, NDP Finance Shadow Minister Court Ellingson responded to the government’s move to fire the AIMCo board.
“Today, they could have put in place a new interim board and CEO, rather than this drastic, earth-shaking move. They chose not to. This is supposed to be a non-partisan, arms-length organization. Appointing a UCP politician the head of it sends entirely the wrong signal to Albertans and the investment community,” he said.
“The Premier herself appointed some of these AIMCo directors. The Finance Minister himself said this spring that AIMCo was doing a good job. To suggest this is about AIMCo salaries, when this government passed legislation to remove the caps on salaries for board members, is ludicrous,” said Ellingson.
“AIMCo’s poor returns are a clear reflection of the UCP’s incompetence. We have raised concerns about their poor returns for years, and we’ve noted AIMCo’s returns have been below that of the Canada Pension Plan. Until now, the UCP even proposed using AIMCo to manage the proposed Alberta Pension Plan. Any such APP scheme should now be completely off the table,” he said.
“This government must immediately pull the finance minister from governing AIMCo and put in place a non-partisan interim board and CEO. Anything less is reckless.”
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Unfortunately, the Smith/Parker UCP/TBA cannot be trusted with regard to pension plans. We have long suspected that they wish to dip their fingers in an Alberta Pension Plan re: getting control of our CPP monies. This, AIMCo, for many of us, is no different. This, ‘stuff’, again, just cannot be made up. What will the untrustworthy UCP/TBA pull off next?
Here are some things we should know.
For the fiscal year 2023, CPP, 570 billion in assets, net income 8 billion, net return 1.3 %, say it again 1.3%. Percentage value-added above reference portfolios, one year 1.3%, 0.8% over five years. Some zoo animals could have done better, An article from 2021 from Andrew Coyne on the problem with the CPP investment board is telling.
https://financesofthenation.ca/2021/05/29/andrew-coyne-the-problem-with-the-cpp-investment-board/
I googled the salaries of AIMCo executives and employees and it was an eye opener. Millions and hundreds of thousands of dollars per year to mismanage billions of dollars. This is the third board the UCP has fired so the cost of wages plus severance is got to be in the millions. That’s pension fund money that will never go to the employees it was intended for. Yeah let’s give the UCP our CPP cash to manage 😂😂😂.
Agree. See the link from Andrew Coyne above. It to is an eye opener. Seems no one is looking after any pension plan. Here is a stunner.
What is the average rate of return on CPP?
The study finds that anyone born after 1955 (retiring in 2021 or later) will receive a modest return on their contributions of 3.0% or less. Any CPP-eligible Canadian born after 1971 (retiring in 2037 or later) who worked full-time will receive an annual return of just 2.1% in retirement.
“Firing of AIMCo CEO and entire board another sign UCP is determined to control everything, everywhere, all at once. And if you’re an Albertan, that includes your retirement savings in the Canada Pension Plan Investment Fund.”
http://www.albertapolitics.ca
Why now? Read on…also why, the reasons for any issues with AIMCo rest with the UCP, again, who are not to be trusted.
Actually they are doing what they should be doing. Trudeau should be doing the same with the CPP feeders. All of this is disgusting. Firing those not performing. But then that would put the government in good light and defeat the purpose of the AUPE.