While the majority of Canadian pension and retirement savings plan sponsors view governance as a top priority, 24 per cent said they haven’t conducted a review of their governance policy in the past three years, according to a new survey by Aon.

It found 21 per cent of respondents identified “outdated or inefficient plan governance structure” as an issue to be addressed on a short-term basis, while four per cent don’t have a governance policy or internal bylaws. The prioritization of governance is particularly low among plan sponsors of group registered retirement savings plans or non-registered plans, says Francois Parent, associate partner for retirement solutions at Aon.

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“I suspect some employers believe that, in regards to those types of plans, you don’t need a governance structure or process such as those for a registered pension plan. We believe those plans are less complex, but good governance is good governance and you should have a structure even if your plan is less complex.

“The good news is that, for many respondents, good governance is an important topic and for most [respondents], they have a governance policy and structure in place. The fact that these processes and governance policies aren’t reviewed periodically is a problem. Sometimes these documents are forgotten in meetings. . . . It’s something we need to remind committee members to do.”

The top issues currently being addressed by plans include environmental social and governance factors (31 per cent), cyber risk, (31 per cent), diversity, equity and inclusion (20 per cent) and climate change (15 per cent), the latter of which Parent says may have been grouped under ESG by some respondents.

Read: Is B.C.’s pension governance structure a ticking time bomb?

Although 41 per cent of respondents said no additional strategies would improve the effectiveness of their committee meetings, some said these meetings could be run more effectively by members having a clearer sense of their responsibilities, more or all members coming to the meetings prepared and more or all members participating in discussions and decision-making.

And while roughly 20 per cent of plan sponsors said they offer formal training and education for members upon joining a pension committee, 23 per cent said training isn’t included in their plan’s written policy and 22 per cent said they haven’t reviewed the matter in the last three years. In addition, a large number of plans don’t offer these programs for several reasons, says Parent.

“Sometimes committees don’t believe they need the additional training or, among smaller organizations, they might think it’s too expensive. It’s our goal to remind pensions [that members] don’t need to go out of Canada to attend a training session but they need to take the time to [attend training sessions], which is another issue. Most committee members have a full-time job already and this is just something they do part time. . . . For us, having the right people is a key component of good governance. They don’t have to be experts, but they need some basic skills to understand what needs to be done.”

Read: FSRA advising DB MEPPs on governance, risk-management practices