The CEO of Alberta Investment Management Corporation is leaving the company by the end of June 2021 in the wake of huge investment losses by AIMCo earlier this year.
Kevin Ubeline, who has held the top AIMCo position since 2014, agreed with the board to “begin the process of CEO transfer now”, AIMCo spokeswoman Denise Nemeth said in an email on Tuesday.
“AIMCo is in very effective hands as Kevin continues in power until that date and he has the full support of the board and management as he carries forward many priorities before us,” Nemeth wrote.
According to AIMCo’s annual reports, Ubilin was paid $ 8 2.8 million in 2019 and 4 3.4 million in 2018.
AIMCo, a provincial corporation, manages a number of regional government-funded investments Heritage Savings Trust Fund. It invests money in the pension funds of over 300,000 Alberta public sector workers.
AIMCo has been under scrutiny since the spring when investment managers lost $ 1.1 billion on a risky investment strategy known as the Volts. The Heritage Fund will spend on this strategy 11 411 million, And the Alberta nest egg has touched its lowest value in eight years this spring.
These losses prompted AIMCo’s board to order an external review and the corporation pledged to improve.
In June, reviewers found that investment challenges, risk controls, cooperation and internal challenges to the company’s culture of risk were “unsatisfactory”.
Senior leaders at AIMCo do not have enough information about the risks to their investments, which is fast enough, the reviewers concluded. They said AIMCo needs a change of culture to prevent future losses.
AIMCo can manage future regional pension plan
The corporation has been under additional public and political scrutiny since the United Conservative Party government passed the bill in 2019, seeking to use the Alberta Teachers Retirement Fund AIMCo as its investment manager. The change will affect about 83,000 current and retired teachers, and is expected to be completed by 2021.
Bill 22 requires the three major public sector pension plans to use AIMCo only as their investment manager. This gave the government the right to reject potential nominees for pension plan boards.
Finance Minister Travis Toves said the move would allow AIMCo to significantly add to the $ 119 billion in assets it manages, which will bring economies. He said teachers and taxpayers would save on investment management fees if AIMCo takes on investment responsibilities.
The government is also exploring the option of formulating a regionally running government pension plan and excluding Alberta from the Canada Pension Plan (CPP). The pension plan run by Alberta can be managed by AIMCo.
The government issued a request in September for proposals to the contractor to study the risks, benefits and requirements of setting up a regional pension plan. The government has said it will question the regional referendum in 2021 if the benefits outweigh the risks.
These measures created a pushback from the people and sparked campaigns suggesting that the government should stay away from pensions. Introduced by NDP Labor and Immigration Critic Christina Gray a Private Members’ Bill Attempts were made to stop these actions earlier this year, but the government dismissed it.
On Tuesday, Gray said the Ubelin exit raises questions about AIMCo’s advice to the government on consolidating more assets under AIMCo control.
In July, Gray and her Caucus colleagues handed over to the Premier Office a list of 36,000 names who had signed petitions to stop the pension changes.
“Albertans’ retirement security, about forcing AIMCo to use it, and about the steps this government has taken to abandon the Canada Pension Plan, the government has stated, will include AIMCo,” Gray said.
Gray said AIMCo should be more transparent about the causes and consequences of the $ 2.1 billion investment loss.
The future of AIMCo
Nemeth said the AIMCo board will soon begin an international search for a new CEO, looking at candidates inside and outside the company.
Nemeth said it was the board’s decision that Ubelin’s departure was his decision.
“His natural term end date is not too far off and he hopes the board will start searching for his successors accordingly,” he wrote.
He did not provide information on the expiration date of his tenure or any detachable payments.
He said Ubelin did not indicate his future plans.
There have been other changes in AIMCo’s executive team since the losses were first exposed in April. Two other senior leaders left the company in June, and the names of three other executives disappeared from AIMCo’s senior team page on its website. Earlier this month, the corporation announced the promotion of a new Chief Financial Officer, a new Chief Risk Officer and a responsible Vice President of Investment.