Board bars executive romances and reins in vacation payouts following $1.6 million controversy
The board of the $25.4bn CAAT Pension Plan has tightened its rules on executive pay, workplace relationships and succession planning, months after governance failures forced out its chief executive, its board chair and several senior managers.
In a letter to members and employers cited by The Globe and Mail, the board of trustees said it had changed its governance procedures following a third-party review that ran from December 2025 into early 2026.
The plan did not release the review's full results.
CAAT commissioned the review from Carol Hansell, founder and senior partner of Hansell LLP, the Globe reported.
Hansell has sat on the boards of the Bank of Canada and the Public Sector Pension Investment Board, was named a fellow of the Institute of Corporate Directors in 2013, and is a founding trustee and fellow of the American College of Governance Counsel.
The board hired Hansell after several senior executives wrote to trustees in November 2025 urging an investigation into what they saw as breakdowns in governance controls.
Their concerns centred on then-chief executive Derek Dobson, who had received a $1.6m payout for unused vacation that conflicted with internal policy, and who had been in a personal relationship with a staff member for more than a year with the board's approval.
On executive pay, the board said it had strengthened oversight and improved transparency.
CAAT's 2025 annual report discloses total pay for its senior executive team in a single table but, unlike most other large Canadian pension plans, does not break out individual compensation.
The letter referred to planned compensation disclosure in future years without giving detail.
CAAT paid its top leaders a combined $9.73m in 2025, up from $7.65m in 2024, the Globe reported.
The 2025 figure included the $1.6m vacation payment, which Dobson later repaid in 2026.
The board also updated its workplace relationship policy to bar internal relationships involving the chief executive or senior executives, whether or not a direct reporting line exists between the employees.
Earlier in the year, according to the Globe, CAAT had said Dobson's relationship was in “full compliance” with policies reviewed by external legal counsel, and it had planned to keep both Dobson and the employee in their roles with safeguards against conflicts of interest.
The board said it had affirmed that CAAT's human-resources policies, including those on carrying over vacation and claiming pay for unused days, apply to all employees regardless of title.
CAAT had reimbursed Dobson for accumulated vacation despite guidelines requiring time off to be used within a year and capping payouts at five days, the Globe reported; the plan had earlier said his employment contract governed his pay and benefits.
The payout was the third Dobson received over several years.
“We believe clear, consistently applied policies will enhance accountability and fairness across the organization,” the trustees wrote.
The board said it was also strengthening succession planning for board and committee leaders, the chief executive and senior executives.
CAAT began searching for a permanent chief executive in June, with executive search firm Egon Zehnder leading the process, and said it would keep reviewing trustees' skills to meet regulatory expectations for a plan of its size.
The changes follow an abrupt leadership turnover.
Three executives left on January 19, 2026: chief investment officer Asif Haque, chief financial officer Mike Dawson and chief pension officer Evan Howard, the Globe reported.
The Ontario Public Service Employees Union (OPSEU) suspended board chair Don Smith on January 23 over allegations that he and vice-chair Kareen Stangherlin may have acted outside the plan's policies, according to Markets Group, and OPSEU trustees on the sponsors' committee later removed him.
CAAT placed Dobson on administrative leave on February 13 and named Kevin Fahey, then chief investment officer with more than 16 years at the plan, acting chief executive and plan manager, the plan said.
It appointed Audrey Wubbenhorst as board chair and Janet Greenwood as vice-chair.
CAAT announced Dobson's departure on March 6 under a settlement in which he resigned immediately and repaid his 2025 vacation payout.
The Financial Services Regulatory Authority of Ontario said it was aware of developments at CAAT but does not comment on supervisory work at specific plans, the Globe reported; spokesperson Russ Courtney said its mandate includes promoting good pension administration.
CAAT spokesperson Stephen Hewitt said the plan keeps up regular dialogue with the regulator, and the plan thanked the regulator for its engagement when it announced Dobson's exit.
CAAT's assets rose to $25.4bn at the end of 2025 from $23.3bn a year earlier, and its funding reserve grew $600m to $6.7bn, leaving the plan 124 percent funded, unchanged from 2024.
Its 8.4 percent net return trailed its 11.2 percent benchmark, a gap the Globe attributed almost entirely to private equity, which returned just 1.5 percent.
Fahey said he had inherited a strong portfolio and that staff morale was good.
The plan paid more than $760m to pensioners in 2025, extended conditional inflation protection for eligible members through 2028, and introduced a 100 percent survivor pension option, Benefits and Pensions Monitor reported.
Nearly half its portfolio, 45.5 percent, is exposed to US-based assets, with Canadian assets at 23.9 percent.
CAAT is a multiemployer plan serving Ontario's colleges and more than 800 public- and private-sector employers, with about 125,000 members.
Its board splits appointments between OPSEU, which represents many college employees, and the College Employer Council.
