The chair of the CAAT Pension Plan board has been ousted by the Ontario Public Service Employees Union (OPSEU) as scrutiny intensifies over alleged governance issues within the $23 billion pension fund. Don Smith’s removal follows a series of suspensions and investigations that have raised serious concerns about the plan’s leadership and management practices.
Governance Crisis Unfolds
Don Smith’s suspension as chair was initially enacted by OPSEU, the union responsible for appointing several board members. Despite CAAT’s assertion that Smith remained in his role until a formal removal was executed, the union’s representatives on the sponsors’ committee acted swiftly to revoke his appointment. This committee, comprised of eight members who advocate for the interests of both employers and plan members, has been pivotal in managing the ongoing turmoil.
CAAT, which serves Ontario’s colleges and over 800 public and private sector employers, boasts a membership of approximately 125,000 individuals. Darryl Bedford, co-chair of the sponsors’ committee, confirmed Smith’s dismissal but refrained from providing additional comments. A representative from CAAT also verified that OPSEU’s committee members have officially removed Smith from his trustee position.
Investigations into Leadership Conduct
The governance issues at CAAT have emerged from troubling allegations concerning a substantial $1.6 million vacation payout awarded to CEO Derek Dobson, alongside concerns about a personal relationship he has been maintaining with a CAAT employee. The situation escalated when three senior executives abruptly departed the organisation in January, exacerbating the crisis and leading to calls for more extensive oversight.
Kareen Stangherlin, the vice-chair of CAAT’s board, is also facing scrutiny. Appointed by the College Employer Council (CEC), which represents Ontario’s publicly funded colleges, Stangherlin’s actions are now under investigation, with OPSEU appealing to the CEC for an inquiry. An OPSEU spokesperson, Aidan McNally, stated that the union had yet to receive feedback from the CEC regarding their concerns about the actions of both the chair and vice-chair.
External Oversight in Progress
In a bid to address the governance concerns, CAAT enlisted a third-party expert in December to conduct a comprehensive governance review, which is anticipated to conclude in the coming weeks. Additionally, the Financial Services Regulatory Authority of Ontario, the provincial pensions regulator, is currently examining the situation to determine if there have been any governance failures within CAAT.
The investigations are critical not only for the integrity of the pension fund but also for the trust of its members and stakeholders. As the governance review progresses, stakeholders are keenly observing the outcome, which will likely shape the future direction of the fund.
Why it Matters
The fallout from CAAT’s leadership crisis has significant implications for the pension fund and its vast membership. With a substantial amount of capital at stake and a growing number of investigations into governance practices, the integrity of the pension system is under threat. Maintaining transparency and accountability in leadership is crucial to safeguard the interests of the plan’s members and ensure sustainable management of their retirement funds. As these events unfold, they underscore the importance of robust governance mechanisms in pension management, which can affect not only current members but also future generations relying on these funds.
