Thread by @yomeeks

This is your daily pension announcement! The other shoe has dropped edition. The ATA put out this release today. Loyal Tweeps, you know that the ATRF and AIMCO have been negotiating an Investment Management Agreement (IMA) for the last year. #ABLeg #AIMCO

teachers.ab.ca/News%20Room/Is…

Apparently, negotiations have failed and Travis has imposed an IMA by Ministerial Order on Dec 23.

Merry F***ing Christmas! @schill_dawg essentially calls Kevin a bitch! Read it and see. #ABLeg #AIMCOfail #Christmascameearly

You wouldn't know that it had become law as it isn't listed with all the other Ministerial Orders on the QP website. I didn't think that was legal, to sign an MO and then keep it hidden from people like me. But, oh well. Nobody has ever accused Travis of being a genius. #ABLeg

The ATA has provided all of us with a scan of the MO, thank God. (See link in the release.) Otherwise we wouldn't know what the law in Alberta was. #AbLeg

Remember this isn't a level playing field. The GOA is the sole owner of AIMCO and Travis is a Minister of the Crown. He is imposing an agreement on ATRF that is jointly run by GOA and teachers. ATRF is the trustee of the assets. Travis is conflicted. #ABLeg

I will take a couple of days to unpack the contents of this order. So far it is the embodiment of the good, the bad, and the really ugly.

The Good: the IMA includes a recognition that the ATRF board will establish the investment policy to direct how plan assets are managed.

The Bad: Page 16 AIMCO costs "such costs should be lower than the market standard fees charged by comparable for-profit providers of investment management services to their clients" #ABLeg #thatsnotwhatyousaidbefore

Really? Travis' one line through this whole debacle is this would save money by in-sourcing from for-profit advisors. Now all AIMCO has to do on costs is less than the private sector? How about 30% less than the private sector? Or how about at a cost less than ATRF currently?

This provision is in direct opposition to what Travis said. #AbLeg AIMCO costs have gone up every year of its exsistence.

The Fugly: AIMCO has some veto power over ATRF investment decisions. To quote: “Specifically, AIMCo is not required to implement ATRF’s Investment Policy if, in the sole opinion of AIMCo, it would threaten to compromise AIMCo’s economies of scale or operational efficiencies,”

Ask @premiamanagement what he thinks of that clause. No appeal. As a former Board Member, I would tell you that ATRF would never voluntarily enter into a management agreement with this clause. #ABLeg

I suspect because of the role that million-dollar bonuses played in the whole VOLTS debacle, AIMCO is directed to consult with its clients on its compensation system (section 8.5). #ABLeg

This is important because, in this business, more than any other, compensation drives behavior and risk-taking. A bad compensation system will drive bad behavior. #AbLeg

Pension benefits do not change. Contributions do not change. But joint governance (since 1938) takes a real hit. #ABLeg

@premiamgmt

I tried to tell Kevin (back in the day) that he really didn't want 80,000 clients that hate him. But he didn't listen. #ABLeg