Thread by @yomeeks

This is your daily pension announcement: Emergent lies edition! @jkenney @EmmaLGraney @CGriwkowsky

Just so you know most of what @jkenney just said about the AIMCo losses was false.

DM me if you want more. But, this is remarkable because it is not normal market volatility.

The losses reported were in ADDITION to market volatility losses not INSTEAD.

Mercer's says through COVID the average Canadian pension fund has lost 8.1%. The G&M yesterday (and LAPP confirmed) said that AIMCo lost $4 billion (~4%) ON TOP of normal market volatility. #ABLeg

For example, that would be -12.1% for AIMCo and -8.1% for the average pension fund.

The $4 billion has just evaporated. It is not like your stocks have gone down in price and you can wait for them to recover post-COVID. This money is gone. #ABLeg

Kenney says AIMCO has a good track record. Read what Institutional Investor magazine had to say about them yesterday. As LAPP will tell you AIMCo has never, in all of its 11 years, met their return expectation of 0.85% over benchmark.

Leo de Bever was the first CEO of AIMCo. He got the job by promising 1.00% return over benchmark. (Go see back issues of II for the quote.) Never has that happened.

BTW, in 2019 AIMCo could not even return the benchmark. They came in 0.5% below the benchmark. #ABLeg #fail

Generate better returns by the increasing the scale of assets managed by AIMCo? Doubtful. Above $80 billion economies of scale become dis-economies of scale in this industry. #ABLeg #handsoffmypension

@jkenney says there seems to be a misconception that ATRF is a defined contribution plan.

This is a deflection strategy. No one suffers from that misconception.

Whether it is DC or DB it still matters if you lose $4 billion dollars. #ABLeg #handsoffmypension

For every $1 paid in pension $0.75 comes from investment earnings.

And, apparently, AIMCo has already concluded this loss was non-criminal. So it was not a rogue trader. #ABLeg That lets you know how unique this situation is.

Now about that canard of "saving money" by forcing the teachers' to use AIMCO as investment manager: No one has studied this. AIMCo estimated they could save 0.25% (they can't; more detailed info are in my previous tweets).
#ABLeg #handsoffmypension

Then if you just flushed 4% of your fund down the toilet it would take 16 years to make back your "savings" to be even. This is a burning tire fire if I have ever seen one.

BTW AIMCo will not invest ATRF assets and earn a higher rate of return. No risk adjusted comparison

What everyone here seems to admit is that the AIMCo executives were using a derivative investment strategy that they did not understand.

Where is the AIMCo Board?

Teachers have $4 billion more reasons to want to hire their own investment manager.

#ABLeg #handsoffmypension