Thread by @yomeeks

This is your daily pension announcement: The Pension War Room™️ is in "I told you so" mode. Much to our chagrin. Take a look at the quote below from the inquest into the VOLTS debacle at AIMCO. This is what @ChristinaNDP and @SPhillipsAB were getting at... #ABLeg

That quote is from the scope of the inquest saying compensation needs to be looked at as being a cause of the VOLTS losses.

Yet in all the recommendations, compensation is never mentioned. Never in the positive ("AIMCO's bonus structure is fine") ...#ABLeg

and never in the negative ("AIMCO's bonus structure incentivized dangerous risk taking by individuals hoping to earn their next big bonus.")

And, to be clear, we got no clear answer from AIMCO in the Standing Committee meeting. #ABLeg #wherewaskevin

The institutional investment industry grapples with this issue. Huge bonuses are paid out for above average performance. This can cause normally cautious managers to throw caution to the wind....

See the failures of Lehman Brothers and Barrings Bank for current examples. #AbLeg

I thought I would also bring you some gems from the Bill 203 Committee Hearing from last June. Where we heard such canards as:

“I would like to be very clear that AIMCo has a consistent record of outperforming their mandated benchmarks.”

#ABLeg #thatsagoodone

The truth is, even leaving out the VOLTS losses....

Between AIMCo’s inception and December 31, 2019, the LAPP portfolio returned an annualized 6.63% versus a LAPP policy benchmark return of 6.92%.

#ABLeg Who is meeting benchmark? #idiot

If a potty mouthed War Room wanted to include the Volts losses then.....

Between AIMCo’s inception and May 31, 2020, the LAPP portfolio returned an annualized 6.18% versus a LAPP policy benchmark return of 6.76%.

#ABLeg Oh that sucks! No wonder Kevin stayed away.

To quote an (unnamed) industry exec....
Although one can selectively choose interim time periods since AIMCo’s inception where AIMCo has exceed benchmarks, doing so is disingenuous as it does not provide a complete picture of AIMCo’s entire body of work as a legislated monopoly.

Do you remember when Athana (Deputy Minister of TBF) said...

“I think it’s important to understand the nature of the stretch goals before commenting on the extent to which AIMCo has or has not met them.”

That is misleading. #ABLeg

Value add expectations should be met over suitable time periods. If they can't be met the AMCO Board needs to lay everyone off and index the lot. #ABLeg

I can't remember who said this last June...
“Bill 22 was developed to forestall the possibility that each of the pension funds could or would develop unique pension management....elimination of existing economies of scale and potentially outsourcing outside of Alberta …” #ABLeg

When the reality is ....
AIMCo retains offices in Toronto, London, and Luxembourg, and has also been exploring the opening of an office in Asia. AIMCo already outsources outside of Alberta – numerous external managers domiciled outside of Alberta.
#ABLeg

Was it Athana that said...
"Essentially, what we were envisioning is kind of like another AIMCo being developed as a component of ATRF. Our conclusion was that the expertise – and AIMCo does have an excellent reputation – existed already in Edmonton." #ABLeg

Don't get me started. Excellent reputation? Do you want to walk that back now? In light of events? The government is not serious about fostering diversification of industry outside of oil and gas – it’s wrong to presume that Edmonton can only have one investment manager. #ABLeg

And one more from Athana, your Deputy Minister of TBF:
"It’s why I’m so distressed when we hear the suggestion that Bill 22 reversed joint governance. I think that that is unfortunate, that that is one of the claims that’s been made about Bill 22. It’s totally false" #ABLeg

Disingenuous...
The façade of joint governance may remain but the inability for pension clients to exercise choice in its service providers should its service providers fail, severely limits the pension plans’ ability to exercise their fiduciary responsibilities. #ABLeg