Thread by @yomeeks

This is your daily pension announcement: If you want details on the mechanics of evaporating $2.1 billion dollars (so far) read Pension Pulse below. If you just want the highlights stick with my tweets. #ABLeg

pensionpulse.blogspot.com/2020/05/aimcos…

Leo does an excellent job of rounding up what you do if you lose big bucks on a financial instrument that you don't understand.
1. Don't let Kevin make the announcement, that job belongs to the Board Chair J. Richard Bird. A man we have yet to hear from. #ABLeg #handsoffmypension

2. The Board Chair needs to immediately hire a third party firm to investigate the entire volatility strategy.

3. Make that public in a short statement and set a three month time frame to publish an in-depth report which also needs to be public. #ABLeg #AIMCOfail

It seems straightforward, but in Leo's words:

"Governance lapse 101: You don't have the CEO and senior managers responsible for billions in losses come out with a public statement and investigate their own losses." @ABLeg #aimcofail @jkenney

4. If the Board does not conduct a full and independent inquiry, then the Minister of Finance, Travis needs to conduct a full, independent review even if he is an AIMCO fanboy.

#handsoffmypension #ABLeg #fail

Kevin did not reveal anything about the program itself. Again, as Leo points out, he needs to be careful not to incriminate himself.

It is in this current atmosphere, that Travis needs to reverse the pension portions of Bill 22. He has a fiduciary duty as trustee. #ABLeg

Now remember that highly conflicted business case that AIMCO put out to support taking over teachers' pension investments?
One of the reasons proffered was that AIMCO did more investment management internally, therefore at a lower cost. #ABLeg

Well, here is the downside of "more internal management" at a lower cost. If the fund returns less it actually costs you money and doesn't save a thing.

(BTW ATRF about 50% of assets are managed external, AIMCO 20%)

IF YOU NEED CERTAIN, VERY SPECIFIC, INVESTMENT STRATEGY YOU SHOULD GO AND HIRE AN EXTERNAL MANAGER THAT IS A DEMONSTRATED EXPERT IN THAT STRATEGY.

Be very careful and intentional about what strategies you bring in house. #ABLeg #AIMCOfail

And finally our last action item from Leo:

5. "If I was siting on AIMCo's Board, while waiting for results of an internal audit, I'd seriously consider farming out this volatility strategy to an outside firm which has successfully managed such a strategy for years." #ABLeg

So Travis said getting rid of external managers will cut costs and save teachers $20 million per year. I have spent the last 6 months of my life trying to show him the error in his argument to no avail. #ABLeg This horrible loss is no comfort to me.

Canada's DB pension system is very successful in general and envied around the world. In Alberta we need to pause operations and take a serious look at the accountability and governance structure of AIMCO. #ABLeg