CAAT Pension Plan Faces Governance Crisis Amid Executive Departures
Senior executives at CAAT, a $23-billion Ontario pension plan, raised concerns about the approval of an unusually large payout to the plan’s chief executive officer, setting in motion a governance crisis that has resulted in abrupt departures and scrutiny from the provincial regulator, according to sources.
Board chair Don Smith was recently suspended from his position on the board of trustees at the CAAT Pension Plan by the union that appointed him, three sources told The Globe and Mail.
The Globe spoke with eight sources familiar with the matter to understand what caused recent upheaval in CAAT’s senior ranks. The Globe is not identifying the sources because they are not authorized to discuss the matter.
CAAT is a multiemployer pension plan that serves Ontario’s colleges and more than 800 public- and private-sector employers. It has a total of about 125,000 members.
Mr. Smith’s suspension was a reaction to the abrupt departure of three executives from the plan in January, three sources said, amid concerns over decisions approved by the board. Two of the key flashpoints were a $1.6-million vacation payout to chief executive officer Derek Dobson that board leadership approved last year in lieu of vacation time, and a workplace relationship that Mr. Dobson has been having with a CAAT employee that the board sanctioned. Mr. Smith oversaw both of those decisions.
In response to questions from The Globe, Emily Visser, a spokesperson for the Ontario Public Service Employees Union, confirmed in a statement “that we have suspended one trustee from their position, pending an internal investigation,” but did not name the board member.
OPSEU represents staff at many employers that participate in the CAAT plan, and appoints nine trustees to CAAT’s board. OPSEU appointed Mr. Smith.
Ms. Visser said in the statement that the union has been reassured that CAAT is in strong financial health.
CAAT spokesperson Stephen Hewitt also confirmed in a written statement that OPSEU “suspended Don Smith as its nominee,” but said Mr. Smith “remains a trustee.”
OPSEU representatives “have the right to remove him from the board. He currently serves as chair until he is formally removed,” Mr. Hewitt said.
There is sufficient concern about governance at CAAT that the provincial regulator overseeing pension plans, the Financial Services Regulatory Authority of Ontario, is also looking into what transpired at CAAT and whether there was a failure of governance, three sources said.
FSRA is “aware of recent developments at CAAT” but does not comment on its supervisory activities at specific pension plans, spokesperson Russ Courtney said in a statement. He added that the regulator’s mandate “includes promoting good administration of pension plans.”
Mr. Hewitt said CAAT maintains “a regular and ongoing dialogue with FSRA, and this has been the case with respect to the recent leadership changes at the plan.”
Over the course of several months, tensions inside the pension plan’s senior ranks have been building, four sources said. They came to a head in late January when three of CAAT’s top executives – chief investment officer Asif Haque, chief financial officer Mike Dawson and chief pension officer Evan Howard – left the pension plan on Jan. 19.
In an all-staff e-mail the next day, reported by The Globe, Mr. Dobson said they were “leaving the organization on good terms,” but did not provide a reason for their departure. Mr. Dobson also held a hybrid town hall to answer staff questions on Jan. 22, CAAT said.
In his e-mail to staff, Mr. Dobson cited a need for “the right alignment of our executive team.”
In fact, the three executives left the organization after they warned board members they had lost faith in Mr. Dobson’s leadership, three sources said. However, the board stood by Mr. Dobson, and the organization negotiated terms for the three senior leaders to leave CAAT, the sources said.
Mr. Haque, Mr. Howard and Mr. Dawson did not respond to multiple requests for comment.
Mr. Hewitt said in the plan’s statement that decisions on executive departures are a confidential matter between the former employees and CAAT. He added that CAAT’s board “continues to have confidence” in the CEO and his ability to lead the organization.
CAAT was founded in 1967 to serve Ontario’s colleges of applied arts and technology. Under Mr. Dobson, it has expanded rapidly to serve a wider array of employers, with more than $23-billion of assets and $6-billion in funding reserves. The Globe has been a participating employer in CAAT since 2022.
The plan is well funded, with a 124-per-cent funding ratio, meaning it has $1.24 in assets for every dollar it expects to owe in pensions, according to the pension plan’s most recent disclosures. The concerns under investigation do not appear to relate to its investment performance, solvency or ability to pay pensions.
The senior executives who left CAAT approached its board in part to raise concerns about the $1.6-million payout to Mr. Dobson that the board approved in November, to compensate him for unused vacation time, three sources said. The payment was the third such payout that Mr. Dobson has received at CAAT, including a previous payment in 2019, two sources said.
The recent payout has invited scrutiny over whether the board applied enough rigour in approving such a large one-time payment to its CEO.
CAAT’s board “is aware of concerns” about vacation payments made to the CEO, and appointed an independent expert “to conduct a governance review” in 2025, Mr. Hewitt said.
The review covers CAAT’s governance policies, procedures and practices and is in advanced stages, he said.
Unlike most large public-sector pension funds in Canada, CAAT does not disclose compensation details for its most senior executives.
Another source of tension has been the personal relationship Mr. Dobson has been having with another CAAT employee for more than a year.
Mr. Dobson disclosed to CAAT’s board that he “had commenced a consensual relationship with a CAAT employee” in November, 2024, Mr. Hewitt said.
The employee does not report directly to Mr. Dobson, whose “full compliance” with company policies was reviewed by external legal counsel, CAAT said.
“Both the CEO and the employee will continue in their current roles within the organization and CAAT has implemented a number of measures to prevent any perceived conflicts of interest or perceptions of favouritism in light of the relationship,” Mr. Hewitt said.
Those measures include barring the CEO from having input into performance appraisals, compensation decisions or potential promotions, CAAT said.
But internally, sources said, there are still questions about the propriety of the relationship, and whether trustees should have sanctioned it given the CEO’s authority over employees.
There have been other changes to CAAT’s leadership team in recent months. The plan’s chief human resources officer left last June, and its senior vice-president of technology and IT services management as well as its head of policy and government relations departed early this year.
Ana Pereira of the Toronto Star also reports CAAT pension plan board chair suspended by OPSEU amid governance crisis:
The chair of the CAAT pension plan board, Don Smith, has been suspended amid a governance crisis at the plan.
On Tuesday, the Globe and Mail reported that Smith oversaw an approval made by the board to grant CAAT CEO Derek Dobson a $1.6 million vacation in-lieu payout and sanctioned Dobson’s relationship with a CAAT employee.
CAAT, which manages the pensions of more than 120,000 public- and private-sector workers across Canada (including Toronto Star employees), confirmed that the Ontario Public Service Employees Union (OPSEU) removed Smith as its nominee on the plan’s board of trustees.
Smith, who is also a professor at Georgian College, remains as trustee.
OPSEU members of the sponsors committee have the right to remove him from the board, said CAAT, and he currently serves as chair until formally removed.
A web page containing Smith’s biography has been withdrawn from CAAT’s website.
The news comes after CAAT announced the sudden departure of three senior executives — the chief investment officer, chief financial officer and chief pension officer — last Wednesday.
Originally created to support Ontario colleges, CAAT now serves 800 participating employers with $23 billion in assets. The plan is well-funded, holding $1.24 for every dollar in promised benefits. In the unlikely event of a deficit, all pensions would continue to be paid in full, as is required by law.
In a statement, CAAT spokesperson Stephen Hewitt said reasons behind employee departures are confidential.
Sometime prior to December 2025, the board of trustees became aware of “concerns” that had been raised with respect to vacation payments made to Dobson, according to Hewitt, confirming the $1.6 million attributed to anonymous sources in the Globe.
He said the board has appointed “an independent expert” to conduct a governance review, which is on track to be completed in the “coming weeks.”
“If changes are needed to continue to provide effective governance and align with best practices, the board will consider them,” Hewitt said, emphasizing that CAAT continues to “have confidence” in the CEO’s leadership.
In a statement, OPSEU president JP Hornick said the union has “no influence on the administrative decision-making of the CAAT Pension Plan Board of Trustees” and that one trustee has been suspended pending an investigation.
“The union continues to be invested in the ongoing protection of our members’ pensions and has been reassured by CAAT Pension Plan that the plan is in strong financial health,” Hornick said.
CAAT also confirmed that, in November 2024, Dobson informed the board of trustees that he had begun a consensual relationship with a fellow employee. The disclosure was compliant with the pension plan’s policies on workplace relationships, said Hewitt, and the CEO’s conduct was reviewed by external lawyers.
“The employee is long tenured, was not hired by the CEO, is not a direct report of the CEO and is multiple levels removed in terms of reporting lines,” added Hewitt. He said Dobson will not have an input in the employee’s performance appraisals, compensation decisions or promotions.
Both the CEO and the employee will continue in their roles at CAAT.
Dobson has been leading the pension plan since 2009. He is also a sitting member of the Pension Policy Council at the C.D. Howe Institute.
Josh Welsh of Benefits Canada also reports a Canadian pension plan faces governance crisis amid executive departures:
A governance crisis is unfolding at CAAT Pension Plan, following concerns raised by senior executives about an unusually large payout to CEO Derek Dobson, according to the Globe and Mail.
Board chair Don Smith has been suspended from his position by the Ontario Public Service Employees Union (OPSEU), which appointed him as a trustee. The suspension came after three senior executives - chief investment officer Asif Haque, chief financial officer Mike Dawson, and chief pension officer Evan Howard - abruptly left the organization on January 19, according to the Globe.
OPSEU spokesperson Emily Visser confirmed the trustee suspension but stated the union has been reassured of CAAT's strong financial health.
The departures followed internal disputes over two key issues: a $1.6-million vacation payout to Dobson approved by the board in November 2024 in lieu of unused vacation time, and a workplace relationship between Dobson and a CAAT employee that trustees sanctioned.
Both decisions were overseen by Smith.
According to sources cited by The Globe, the three executives warned board members they had lost faith in Dobson's leadership, but the board stood by the CEO and negotiated exit terms for the departing executives.
Meanwhile, CAAT spokesperson Stephen Hewitt confirmed the pension plan has appointed an independent expert to conduct a governance review.
To fill the Plan's critical roles, CAAT has since promoted 17-year veteran Kevin Fahey to the role of CIO and appointed former trustee Scott Blakey as an interim executive vice president.
CAAT serves approximately 125,000 members across Ontario's colleges and more than 800 public- and private-sector employers. Despite the upheaval, the Plan remains financially stable with a 124-per cent funding ratio, according to the Plan’s most recent disclosures.
CAAT has experienced additional leadership turnover recently. Their chief human resources officer departed in June, while the senior vice-president of technology and IT services management and the head of policy and government relations left earlier this year, according to the Globe.
The Financial Services Regulatory Authority of Ontario (FSRA) told the Globe they are now reviewing the situation for potential governance failures.
Wow, I knew something was up at CAAT Pension Plan when I covered the departure of the CIO, CFO and CPO in late January.
Never in my career working at pensions or in almost 20 years of covering them did I ever see a CIO, CFO and CPO all "resigning" on the same day. It was extremely odd and now we get more information as to the context surrounding the departures.
Someone obviously leaked the story to James Bradshaw at the Globe and I'm glad they did or else people would be completely clueless.
I'm going to share my thoughts and will be brutally honest.
CAAT Pension Plan might be in great financial shape and have great investment and other professionals but this governance crisis shows me that OPSEU has no idea what is really going on there and this was not handled correctly.
Importantly, following these serious allegations, the CEO and Chair should have been placed on administrative leave pending the findings of an independent report.
I'm shocked at the nonsense I'm reading in these articles, at a minimum, the relationship between Don Smith and Derek Dobson needs to be examined.
And to be truthful, after all this, Derek Dobson should just step down for the good of the organization.
I don't see how he can continue being the CEO after all this, he has surely lost the confidence of members and many employees.
When three senior execs all lose confidence in the CEO, the Board doesn't side with the CEO and make arrangements for their exit, the Board immediately places the CEO and senior executives on administrative leave pending an in-depth investigation and the independent report must be made public to all members.
That's the way I would have handled it if I was Chair at CAAT Pension Plan just like if I was the Chair at any other pension fund and a similar situation.
For example, La Caisse had a huge India bribery scandal, I would have placed all execs on administrative leave including their head of Infrastructure pending the findings of a detailed independent report which I would have made public.
Instead what happens all too often is the execs make off like bandits with huge severance packages, sign non-disclosure agreements, and nobody has any idea what the hell happened.
In the case of CAAT, the Board "arranged for the departure of the three senior execs," meaning they got a big severance and in return have to sign a non disclosure agreement.
And if Derek Dobson is forced to step down, I can guarantee you he'll get a whopping severance package for all his years of service and CAAT's members who have modest salaries and pensions will be left in the dark as far as details.
On that subject, CAAT Pension Plan and HOOPP are the only two pension plans I cover that do not disclose the top five salaries of senior execs even though by law, the Financial Services Regulatory Authority of Ontario (FSRA) forces them to disclose this information (so I'm told).
It's a matter of good governance -- Governance 101 -- you always publish the top five compensations at the pension fund you're in charge of.
Now, as far as the specific charges again Derek Dobson, let me be quick.
Vacation pay. Who accumulates $1.6 million in vacation pay over the years? Unheard of, this is why other organizations force everyone including the CEO to take their full vacation or lose their pay.
A consensual relationship with an employee at CAAT. Even if he disclosed it to the Board and was approved by an external legal representative, it's a) bad judgment on his part and b) there's always a perception of conflict of interest even if the employee doesn't report to him.
Totally unethical in my opinion, if you're the CEO and want to have a relationship with an employee, fine but that employee can't continue working at the same organization. Period.
Lack of confidence from three senior execs. In my opinion, this is the most serious charge and warrants a full investigation. When the CIO, CFO and CPO go to the Board and express lack of confidence in their leader, you don't side the CEO and send them packing and if you do, you better have a damn good reason for doing so.
In short, CAAT's Board collectively screwed up here and I'm wondering whether they need a professional board made up of qualified independent professionals with experience (I'm NOT interested but can recommend top guns).
This is a full-blown governance crisis at CAAT and it's not over, more to come.
And the sad part is poor Kevin Fahey, the new CIO, and other CAAT employees are just trying to do their job and this causes unneeded distractions.
I stand by Kevin and his investment team but after reading this, I cannot see how Derek Dobson can continue to be CAAT Pension Plan's CEO and Plan Manager.
Again, for the good of the organization, he should step down.
Those are my thoughts on this governance crisis at CAAT. I want to make it clear that I have nothing against Derek Dobson, think he did a wonderful job at CAAT for many years and promoted DB plans but enough is enough, the place needs to change at the very top.
As far as Don Smith, he needs to immediately resign as a trustee and the entire Board needs to be reviewed to make sure they are qualified and doing their job properly.
I look forward to the findings of the independent review of CAAT's governance model.
Alright, back to trading these crazy markets, unlike the senior pension fund managers I cover, I don't have the luxury of $1.6 million vacation pay or huge bonuses at the end of the calendar of fiscal year.
And neither do CAAT's members, they deserve the truth, the whole truth and nothing but the truth.
Below, the CAAT Pension Plan is committed to providing a secure retirement income for its members and provide innovative retirement income solutions to our employers. Listen to insights from CAAT’s 2024 annual performance update.
It's a shame this happened but I'm convinced CAAT Pension Plan will come out of this a lot stronger.
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