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© Copyright 2000 Rogers Media. The following article first appeared in the May 2001 edition of
BENEFITS CANADA magazine.
Labour movement
Many pension plans are actively educating labour representatives on their role as pension trustees.
This is a step in the right direction.
By Dian Cohen
Last month, I focused on the skill sets oflabour-appointed pension trustees and the less-than-critical acclaim
accorded them by pension fund managers. This is a crucial issue. Having savvy representatives on pension boards
is growing more important by the day, as capital markets and asset allocation become more complex and
governments everywhere change the financing of their employee pension plans from passive low-interest loans to
market-dependent securities.
Bob Baldwin, director of social and economic policy with the Canadian Labour Congress (CLC) says labour is
"not satisfied with the training available to its representatives." He is quick to point out, though, that
there's no hard evidence that indicates labour reps are doing a worse job than management on jointly
trusteed boards.
Baldwin and many other labour representatives concede that there is a political component in the election
of every trade unionist to a pension board. At the same time, they hasten to add that the labour movement
is acting quickly to equip its representatives with the skills they need to do their due diligence on these
boards.
MAKING PROGRESS
Phil Cunnington, a teacher at Centennial College in Toronto and a member of the Ontario Public Service
Employees Union (OPSEU), has recently become the chairman of the jointly trusteed and multi-employer
Colleges of Applied Arts & Technology (CAAT) Pension Board of Trustees. He says that CAAT is not alone
in expanding the opportunities available to plan representatives. "All pension trustees have been able to
go to courses and conferences. Now we're on the verge of formalizing a training policy within our own
plan," he says.
Shirley McVittie, senior benefits counsellor with OPSEU, says that within the last year or so "many unions
which are involved in jointly trusteed plans--including OPSEU, the Hospitals of Ontario Pension Plan Board
and the Ontario Teachers' Pension Plan Board--are mounting education programs. In January, the National
Union of Provincial Government Employees (NUPGE) had its first-ever seminar on trustee responsibilities,
which covered all aspects of the role from the nuts and bolts of socially responsible investing to
corporate governance issues. The Centre for Employee Benefits at Humber College in Toronto is also
introducing a trustee development program.
This confirms the anecdotal evidence that many labour trustees are in need of education about pension
issues and, more importantly, it's proof that labour is doing something to make that education accessible.
NEW VISION
Why has fiduciary responsibility suddenly become an urgent interest to trade unionists? Baldwin provides an
answer.
"Unions, have a long tradition of involvement in multi-employer plans in the private sector," he says, "and
they have always been diligent about discharging their responsibilities to the people they represent. But
it has only been in recent years that provinces and municipalities have moved to market financing of
pensions. Trade unionists--not just in Canada, but also in the U.S., the U.K. and even in South
Africa--have realized that with this change in pension management structures, it's essential that unionists
be equipped to deal with pension governance."
Baldwin adds that the CLC has created new opportunities for trustee education, the first of which was a
four-day conference in February attended by 300 delegates from across the country. The union has also just
launched a pension newsletter.
These are welcome developments. The labour movement has a proud history of looking after the interests of
working people throughout the industrial era, but has not served its members as well in the transition to
the digital age. The actions outlined, however, are a step in the right direction.
Dian Cohen is an economics consultant with a special interest in pension issues.
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