Auditor general recruits MLAs for help in dispute with N.B.'s pension body

New Brunswick's auditor general took a dispute over her authority to dig into the books of the body in charge of billions of dollars in New Brunswick government employee pension funds directly to MLAs Tuesday, a forum that has worked well for her in the past.

Kim Adair-MacPherson told MLAs in her report to the legislature's public accounts committee she has been refused full access to the financial records of Vestcor to review its pay and performance, and requested their intervention to avoid a court fight with the body.

"In our view, the Auditor General Act, as it stands, grants the Auditor General authority to audit Vestcor," said Adair-MacPherson in her report.

"To prevent future disagreements over access, however, we propose a regulation be added to the Auditor General Act to explicitly list Vestcor as an auditable entity."

Vestcor is the Fredericton-based organization set up to manage what is now $18 billion in New Brunswick government pensions and other funds. 

It's jointly owned by the province's two largest public pension funds serving civil servants and teachers, but also oversees the retirement plans of hospital workers, nurses, Crown corporation employees, provincial court judges, MLAs and other groups. 

Vestcor also manages other investment accounts, including University of New Brunswick endowment funds and nuclear waste and decommissioning funds for NB Power.

It used to be a Crown agency but was given its independence in 2016, in part, so it could market its expertise and manage funds for other out-of-province public bodies.

So far none have signed on, something the auditor general suggested should also be looked into.

She said she also has an interest in reviewing other issues, like how six-figure bonus payments to Vestcor executives are earned and calculated and how its investment strategy is performing.

In 2019, Vestcor paid its top three executives a combined $2.63 million, most of that in bonus and incentive pay.

In a statement posted on its website Vestcor disputed the Auditor General's contention she has the authority to review the body's operations. 

"Our analysis and advice have indicated that the Auditor General should be much more limited with respect to access to Vestcor related information than what had been requested, " read the statement. 

"We therefore have had to respectfully decline these requests to ensure we can continue to fulfill our contractual and other commitments to our clients."

In addition to wanting the province to order Vestcor to accept the authority of her office, Adair-MacPherson encouraged MLAs to call the body before the public accounts committee to ask their own questions about its operations.

"We're now five years later and some of the things [MLAs] were told have not panned out the way that they were led to believe," Adair-MacPherson told reporters.

"Decision makers have to agree that they want this entity subject to audit."

In her report, Adair-MacPherson reproduced letters back and forth between her office and Vestcor trying to arrange a review of materials the body claimed it is not required to disclose.

She said the effort dragged on for weeks and stalled the audit of the province's books until she could trust the valuation of pension assets the province was reporting in its own financial statements.

She said New Brunswick's comptroller had to hire an outside auditor for $30,000 to deal with the matter.

"It was in my view ridiculous the hurdles we had to go through to get to the point to finalize the statements," she said.

Vestcor recently upgraded its accommodations by moving its operations into two floors of a new office tower on Carleton Street, Fredericton's so called "sexiest building."

People's Alliance Leader Kris Austin made a motion to summon the body to answer questions. The committee is scheduled to vote on the matter Wednesday.

It's not the first time Adair-MacPherson has used her appearance in front of MLAs to ask for help.

'It's a simple fix,' says AG

In 2018, she told MLAs her office was underfunded and required a $1-million budget increase to properly do its job. It was a plea political parties immediately added to their election platforms that year and which the Higgs government delivered in its first post-election budget.

On Tuesday, she said she hoped taking her dispute with Vestcor to MLAs would generate support and another swift response.

"It's a simple fix. It's an easy clarification of the Auditor General Act," she said.

"It's my attempt to resolve the issue once and for all."