The ATRF Annual Report and Asset Management Transition

April 5, 2022

In a recent article we focused on some of the best news in our 2021 annual report; the contribution rate reduction that will come into effect in September 2022 and result in $37 million in savings for teachers and plan sponsors. As it is every year, this is an area of interest for many members, but new to this year’s annual report are details about the asset management transition ATRF completed last year.

In 2019 the Government of Alberta introduced legislation that required  ATRF to transfer its asset management function to AIMCo, while assigning ATRF continued responsibility for the investment strategy that guides the management of those assets. The transfer of asset management was completed by the legislated December 31, 2021 deadline, and our annual report looked in some detail at several parts of that work.

In total, ATRF transferred over $21 billion in assets, and many members are curious about the costs and savings as a result of that transition.

With a project as massive and complex as this it is difficult to provide simple answers, especially at this early stage in our new relationship with AIMCo. What we can say with absolute certainty is that this work was completed efficiently and at the lowest possible cost – and all the while ensuring the best interests of our plans were protected.

We have presented preliminary information on transition costs as of the end of the fiscal year in our annual report, including $4.9 million in costs to ATRF related to the transfer of the first third of the assets (completed in February of 2021).

Remaining to be finalized are costs incurred by AIMCo which will be charged to ATRF, as well as the costs of transitioning the final two thirds of ATRF’s assets.

Members are also curious about cost savings as a result of the transition. We can say we are committed to working with AIMCo to realize cost savings wherever possible, but it is too early for us to even speculate as to what cost savings may be realized as a result of the transition.

What we can say is that at this time we have not seen any savings as a result of the transition, and also that it will be important to continue focusing on potential cost savings in conjunction with investment returns to ensure we are clear on the full picture.

We understand how important it is to keep members and other stakeholders informed about this transition, and we committed long ago to do just that. We will continue working hard to make this new relationship with AIMCo successful, and we will also continue to provide updates to ensure that members and sponsors can understand and evaluate the results of that work.