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The CEO of Alberta Investment Management Corporation will leave the organization by the end of June 2021 in the wake of AIMCo’s heavy investment losses earlier this year.
Kevin Uebelein, who has held the position of AIMCo since 2014, has agreed with the board to “begin the CEO leadership transfer process now,” AIMCo spokesperson Denes Nemeth said in an email Tuesday.
“AIMCo remains in very capable hands with Kevin continuing at the helm to that date and has the full support of the board and management as he continues to advance the many priorities ahead of us,” Nemeth wrote.
Uebelein received $ 2.8 million in compensation in 2019 and $ 3.4 million in 2018, according to AIMCo’s annual reports.
AIMCo, a provincial corporation, manages the investments of several provincial government funds, including the Heritage Savings Trust Fund. It also 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 $ 2.1 billion to a risky investment strategy known as VOLTS. The strategy cost the Heritage fund $ 411 million and was partly responsible for Alberta’s nest egg reaching its lowest value in eight years this spring.
The losses prompted AIMCo’s board of directors to order an external review, and the company is committed to improving.
In June, the auditors found that internal challenges to investment decisions, risk controls, collaboration and risk culture within the organization were “unsatisfactory.”
AIMCo’s senior executives did not have enough information, fast enough, on the potential risk to their investments, the auditors concluded. They said AIMCo needed a cultural change to prevent future losses.
AIMCo could manage the future provincial pension plan
The company has come under further public and political scrutiny since the United Conservative Party government passed a bill in 2019 that required the Alberta Teachers’ Retirement Fund to use AIMCo as an investment manager. About 83,000 current and retired teachers are affected by the change, which is expected to be completed in 2021.
Bill 22 also required three large public sector pension plans to use only AIMCo as an investment manager. It also gave the government the right to reject potential candidates for board of directors of the pension plan.
Finance Minister Travis Toews said the moves would allow AIMCo to substantially increase the $ 119 billion assets it manages, which would lead to economies of scale. He said teachers and taxpayers would save investment management fees if AIMCo took responsibility for the investments.
The government is also considering creating a provincial-managed public pension plan and withdrawing Alberta from Canada Pension Plan (CPP). An Alberta-managed pension plan could be managed by AIMCo.
In September, the government issued a call for proposals for a contractor to study the potential risks, benefits and requirements for setting up a provincial pension plan. If the benefits outweigh the risks, the government has said it will submit the matter to a provincial referendum in 2021.
The moves generated backlash from the public and triggered campaigns calling for the government to stay away from pensions. NDP labor and immigration critic Christina Gray earlier this year tabled a private members bill that tried to stop the moves but was rejected by the government.
On Tuesday, Gray said Uebelein’s departure raises doubts about the advice AIMCo has given the government about consolidating more assets under AIMCo’s control.
In July, Gray and his colleagues in the caucus delivered a list of 36,000 names signed on petitions calling for an end to pension changes to the premier’s office.
“The Albertans are so concerned about retirement security, about being forced to use AIMCo, and about this government’s move to exit Canada Pension Plan, which has been declared by the government, involves 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 AIMCo’s board of directors is immediately starting an international search for a new CEO and will consider candidates inside and outside the organization.
Nemeth said Uebelein’s departure was her decision, not the council’s.
“The end date of his natural term is in the not too distant future, and as a result he believes the board should start looking for his successors now,” he wrote.
He did not provide a date for the end of his term or information on any severance payments.
Uebelein did not indicate his future plans, he said.
There have been other changes to AIMCo’s executive team since the leaks were first made public in April. Two other senior executives left the company in June and the names of three other executives have disappeared from AIMCo’s senior team page on its website. This month, the company announced a new chief financial officer, a new chief risk officer, and the promotion of a vice president for responsible investment.
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