Alberta teachers association reaches pension agreement with AIMCo, ending lawsuit against province

The Alberta Teachers' Association has reached an agreement with the provincial government-owned investment manager that it says will give teachers a final say over investment decisions affecting their pensions.

The agreement replaces a ministerial order that had allowed government-owned Alberta Investment Management Corporation (AIMCo) to reject any changes proposed by the Alberta Teachers' Retirement Fund (ATRF).

"This is a huge victory for teachers and the Association," said ATA president Jason Schilling in a release on Wednesday.

"Teachers mounted a strong, wide-reaching, relentless campaign in defence of their pensions, which provided the ATRF with the backing they needed to negotiate an effective agreement that protects the interests of teachers."

Teachers repeatedly expressed concerns following the passing of Bill 22 in 2019, which transferred their pension investments under AIMCo's management.

The pension fund's previous CEO left last year after the fund reported more than $2 billion in investment losses. Some union leaders had also expressed concerns the investment manager was making decisions to prop up oil companies.

In fall 2020, AIMCo pulled out of negotiations with the ATRF when the two groups were unable to agree on key terms, and shortly after, Finance Minister Travis Toews passed a ministerial order that allowed AIMCo to veto the teachers' fund investment directions and said AIMCo would be the arbiter of disputes between the parties.

The ATA sued over the order, arguing it not only broke the law but contradicted previous assurances made by Toews that teachers would retain control of their pensions. 

The new agreement, which will replace Toews' order, removes AIMCO's veto, which in turn prompted the ATA to drop its lawsuit against the government. 

The court challenge had been heard in Court of Queen's Bench the previous week, and Schilling said in a release that he believed the timing was no coincidence, "noting that the judge remarked at one point that she was not buying the Government of Alberta's arguments related to certain sections of the [agreement.]"

Finance minister glad to see agreement

Sandra Johnston, ATRF board chair, said in a statement that the negotiated agreement "respects the role of ATRF."

She said it has the right accountability mechanisms, including protections and remedies ATRF will use if needed.

Opposition NDP Labour Critic Christina Gray said teachers and other public servants should have the right to choose who manages their retirement savings. "Until that time, the UCP has created a forced monopoly that gives AIMCo 'hostage' clients, regardless of their performance. This isn't fair," she said in an emailed release. 

The finance minister said in an emailed statement that he's pleased to see an agreement was reached.

"Having AIMCo manage the investments of the ATRF eliminates duplication and reduces the cost of investment services for Albertans and teachers. This was our ultimate goal," Toews said. 

AIMCo's new CEO Evan Siddall said he and his colleagues will now devote their attention to smoothly transitioning ATRF's assets. 

"Today's agreement marks a point of departure for AIMCo as a multi-client investment manager," said Siddall.

The agreement takes place immediately, and the pension fund's assets are set to be transferred by the end of December.