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Alberta Premier Jason Kenney takes his mask off at a news conference in Calgary on Sept. 3.

Todd Korol/The Canadian Press

Alberta’s teachers have won the right to maintain final say over investments made for their $19.3-billion pension plan in a deal that pre-empts a move by Premier Jason Kenney’s government to hand control over to the province’s fund manager.

Alberta Investment Management Corp., known as AIMCo, ended months of lawsuits, court hearings and often bitter negotiations with the Alberta Teachers’ Association, or ATA, with an agreement that ensures the teachers’ long-standing retirement fund has oversight on how AIMCo invests the retirement savings of 46,000 teachers.

Alberta’s AIMCo fiasco is just part of the province’s pension-plan problem

AIMCo’s risky strategy led to higher losses than most pension plans

The accord was a cause for celebration at both the teachers’ association and AIMCo, which manages more than $123-billion for 32 provincial pension plans and endowments, including the Alberta Heritage Savings Trust Fund. Many long-time AIMCo clients have little or no say in how their funds are invested. The agreement is also expected to defuse a major source of tension between Mr. Kenney and the province’s well-organized teachers.

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AIMCo’s chief executive officer welcomed the agreement as a new model for managing clients’ money. “Today’s agreement marks a point of departure for AIMCo as a multiclient investment manager,” said Evan Siddall, who became CEO in July. “Our top priority is helping our clients to secure long-term prosperity for the people of Alberta they represent.”

In 2019, Mr. Kenney’s United Conservative Party government passed legislation to put the previously independent teachers’ pensions under the umbrella of AIMCo. The ATA has been staunchly against the move, arguing that its current manager, the Alberta Teachers’ Retirement Fund, has provided above-average returns for its retirees for decades and gives members a say in investment strategies.

After AIMCo suffered major investment losses in 2020, tied to its failed bet on market volatility during the early stages of the COVID-19 pandemic, opposition to the switchover intensified as the teachers’ union questioned the fund manager’s ability to manage its members’ retirement funds responsibly.

AIMCo’s top executives were replaced after an investigation into the investment losses, with former Canada Pension Plan Investment Board CEO Mark Wiseman appointed chairman at AIMCo, and Mr. Siddall, formerly the head of Canada Mortgage and Housing Corp., named as CEO after the early departure of Kevin Uebelein.

“With the new CEO, AIMCo appeared to realize that they needed to be more responsive to their client, and that they will be held accountable for their duty, and teachers will be holding them to account in terms of the work they do with investment management,” said Jason Schilling, ATA’s president.

The former head of the teachers’ pension plan, Alberta Teachers’ Retirement Fund board chair Sandra Johnston, said the new agreement with AIMCo “respects the role of ATRF and enshrines its fiduciary responsibilities to the plans. It has the right mechanisms for accountability within our new legal framework, and includes protections and remedies.”

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