CAAT Pension Plan Restructures Leadership Amid Governance Crisis

The CAAT Pension Plan has placed its chief executive officer, Derek Dobson, on administrative leave effective immediately, as part of a significant governance overhaul within the $23 billion pension plan. This move follows concerns raised by senior executives regarding Mr. Dobson’s conduct and the board’s oversight, leading to multiple investigations into potential governance failures.

In a statement released on Friday, CAAT announced the appointment of Kevin Fahey as the acting CEO and plan manager. Fahey, who had been promoted to chief investment officer in late January, will navigate the organization through this turbulent period. Additionally, Audrey Wubbenhorst has been appointed as the new chair of the board of trustees, with Janet Greenwood stepping in as vice-chair. The previous chair, Don Smith, was removed from his position earlier this month by the Ontario Public Service Employees Union (OPSEU), following a series of governance-related concerns that surfaced publicly.

In a statement, Wubbenhorst emphasized that these leadership changes are deemed essential to restore stakeholder confidence in the management and governance of the CAAT Pension Plan. She characterized Fahey as a veteran executive with over 16 years of experience within the organization, asserting he is well-equipped to lead during this transitional phase.

The governance crisis escalated over the past few months, particularly after three top executives — chief investment officer Asif Haque, chief financial officer Mike Dawson, and chief pension officer Evan Howard — departed abruptly on January 19, 2024. Their exit prompted a deeper examination of the internal dynamics and governance practices at CAAT, which serves Ontario’s colleges and over 800 public and private-sector employers.

A spokesperson for CAAT had expressed confidence in Mr. Dobson’s leadership as recently as the prior week. However, following a board meeting on Wednesday, the decision was made to initiate the leadership changes. The Globe and Mail has chosen not to identify the sources who provided this information due to their lack of authorization to discuss internal matters.

The CAAT Pension Plan, which boasts approximately 125,000 members, has recently faced scrutiny regarding a $1.6 million vacation payment made to Mr. Dobson last year. This payment was criticized for contradicting company policy, as it was the third such payment he received over several years. Internal guidelines limit the amount of vacation time that employees can carry over or be compensated for, raising questions about the board’s discretion in approving these payments.

While the board attempted to manage Mr. Dobson’s workplace relationship with a CAAT employee by instituting measures to prevent conflicts of interest, it remained a contentious issue among staff. An external expert appointed in December is currently conducting a governance review, which is expected to be completed later in February.

According to CAAT’s statement, the governance-related issues under review do not impact the financial health of the pension plan. Recent disclosures indicate that CAAT has a 124 percent funded status, meaning it holds $1.24 in assets for every dollar it anticipates paying out in pension benefits. The Financial Services Regulatory Authority of Ontario is also actively investigating the situation at CAAT, engaging with employees to gather insights into the unfolding governance crisis.

As CAAT undergoes these leadership changes, the organization faces a challenging period as it seeks to fill the leadership void left by departing executives and regain stability. The recent turmoil has significantly affected morale within the organization, prompting CAAT to acknowledge the emotional toll on its staff. In an internal communication, the organization recognized the recent upheaval and expressed its commitment to restoring stability through the newly implemented changes.