FAQs About ATRF Asset Management Changes
Frequently asked questions to help members understand what is changing and what those changes will mean for them and their pensions.
Updated: December, 2021
ATRF pension plan members have expressed concerns and asked questions about Alberta’s Bill 22, which amended the Teachers’ Pension Plans Act and legislated transfer of the management of ATRF’s pension assets to the Alberta Investment Management Corporation (AIMCo). The following FAQs address some of the questions we have received from ATRF members.
Will the changes contained in this legislation (Bill 22) have any impact on my contributions or my pension when I retire?
- Your pension remains secure.
- This legislation change does not affect pension benefits.
- This legislation change will not have any immediate impact on your pension contributions.
Does this legislation change who is responsible for paying the plans’ benefits?
- No, there are no changes in this area as a result of the legislation, pension benefits related to post 1992 service continue to be met entirely from contributions and returns on the assets contained in our plans. ATRF’s post 1992 pension benefits are not guaranteed by the Government of Alberta or any other organization or entity.
Does this legislation include any other changes to the plan?
- No, there are no other changes to ATRF or its plans as a result of this legislation.
Does ATRF believe the changes contained in Bill 22 are in plan members' best interests?
- ATRF was not expecting the Government of Alberta to make this change, however, it is now law so ATRF complied with its requirements, while working tirelessly to ensure the best interests of our plans continue to be protected as much as possible. The ATRF Board does not believe this legislation is in the best interests of ATRF plans and its members for the following reasons:
- For 80 years ATRF had the optimal situation – complete control of our own destiny including managing our plans’ assets with a team of investment professionals dedicated to specifically addressing our plans’ unique asset and liability needs. This independence led to tremendous success and a very strong track record of investment results. Moreover, prior to this legislation we had launched a major strategic initiative designed to move ATRF’s approach to investment portfolio management to an even higher level.
- Our goals throughout the asset management transition were therefore to comply with legislation and achieve an outcome that allowed us to remain as close to the previous ideal state as possible.
- In addition, analysis undertaken in 2020 showed ATRF’s net investment returns from December 31, 2012 to December 31, 2019, as compared to what they would have been had AIMCo managed the assets. ATRF’s investment track record is superior. Based on this simulation, ATRF’s current asset value would be approximately $1.3 billion lower as of December 31, 2019 had our assets been under AIMCo management during that time.
|ATRF Actual Total Fund Net Return||14.42%||2.40%||11.01%||5.65%||8.98%||12.08%||17.40%|
|Simulated ATRF Total Fund Net Returns under AIMCo management||11.11%||2.26%||9.24%||5.29%||6.86%||11.79%||14.85%|
Note: Calendar year-by-year comparison of ATRF actual total fund net returns with simulated ATRF total fund returns under AIMCo management. Net investment returns are those realized after paying all investment-related expenses, including internal investment operating expenses and all fees, including performance fees, paid to any third-party managers. In short, net investment returns are the actual profits investors earn after accounting for all costs incurred to create those returns. AIMCo returns are computed using asset class returns reported by Local Authorities Pension Plan, AIMCo’s largest client.
What control will ATRF retain now that the assets are managed by AIMCo?
- Government has repeatedly said ATRF will retain “strategic control” of the plans’ assets. That means ATRF will continue to be responsible for strategic aspects of pension management including funding, investments strategy and policy, and setting the strategic asset allocation for assets.
- Further details regarding how AIMCo will manage plan assets have been set out in an investment management agreement (IMA) negotiated by ATRF and AIMCo. We ensured this agreement preserves ATRF’s full strategic control and ability to set the strategic direction of our plans’ investments.
- ATRF will maintain a small team of investment strategy and risk professionals to ensure the board is supported in carrying out its fiduciary duty to the extent possible while complying with the legal requirements of the legislation. This team will enable ATRF to preserve our ability to establish the strategic investment portfolio that best matches our unique pension liabilities while balancing our unique risk framework at the same time.