Investing in good governance

For pension plans, governance refers to the manner in which legal and fiduciary obligations are fulfilled. Good governance originates within the plan's structure, and is reflected in its policies, communications and administration.

In the CAAT Plan, good governance is especially significant when it comes to the management of the pension fund. We believe that the prudent and effective administration of the pension fund has a direct impact on the achievement of the plan's ultimate goal, which is to provide Members with secure retirement income based on their service and earnings.

In 2004, the Plan joined the Canadian Coalition for Good Governance (CCGG). The goal of this organization is to promote, in the Canadian corporate world, the same kinds of good governance practices employed by the CAAT Plan.

The Statement of Investment Policies and Procedures (SIP & P)

The CAAT Plan's investment governance practices are reflected in its principal document, the Statement of Investment Policies and Procedures (SIP & P). The SIP &P, which is reviewed annually, serves as a blueprint for our investment strategy, outlining our investment goals, beliefs and management style, as well as the guiding principles of the pension fund. The SIP & P also details the functions and obligations of the individuals and service providers responsible for administering the Plan's investments. Incorporated within the SIP & P are the rules and requirements listed in federal and provincial pension legislation to which the fund must adhere. It also outlines features of the Plan that will control risk, such as the types of investments that are permitted in the fund.

Investment Structure

The Investment Committee of the Board of Trustees establishes the objectives that govern the Plan's investments and the policies that are written in the SIP & P. The Committee works closely with the Plan's Investment department which is responsible for day-to-day investment activities. The Committee monitors the Plan's Investment Managers with input from the Investment department  and the Plan's investment consultants.

The Investment Managers are external service providers retained by the Plan to manage the Plan's assets. Managers have specific mandates, according to their areas of specialization. Their contracts comply with the Plan's overall investment strategy. Service providers are chosen following a selection process that considers the overall organization and their investment strategy, in addition to their past performance, the expertise of their staff and their own governance practices.

Communication and Disclosure

The ongoing communication between the Board of Trustees, the Investment Committee, the Investment department and our investment managers is an integral part of our governance process. To ensure that practices follow the investment structure and strategy, the Investment department monitors and reports to the Investment Committee on areas such as manager compliance, performance, Socially Responsible Investing (SRI) and proxy voting. The Investment Committee reports to the Board of Trustees.

The CAAT Plan communicates information about the pension fund to our Members and Pensioners in our Newsletters and on our website. 

The CAAT Plan has a fiduciary obligation to protect and invest the contributions of our Members and their Employers, taking into account the sometimes volatile market and economic climate. The Plan's governance structure - its policies, monitoring and reporting practices - are in place to ensure that legal and fiduciary obligations are consistently met.