Pension governance is built for collective decision-making. Boards and committees are meant to discuss, debate, test ideas, and ultimately make decisions as a body. But fiduciary duty is not a group project and it doesn’t “average out” just because a decision was made collectively.

Weak governance is not a minor issue. It is an operational and fiduciary risk driver. When individuals stay silent, defer too readily to “the group,” or fail to challenge assumptions, boards can miss emerging issues, accept unmanaged conflicts, or make decisions without a defensible process. Over time, that raises the risk of governance failure, regulatory scrutiny, litigation exposure, and outcomes that fall short for members and beneficiaries.

Across Canada, the plan administrator (often acting through a board of trustees, pension committee, or similar governance body) must meet fiduciary standards set by pension legislation, common law, civil law and regulator expectations. That standard is carried into the boardroom by individuals. Strong boards are not those that avoid disagreement; they are the ones that manage it well by insisting on independent judgment during deliberation, separating preference from fiduciary concern, and knowing what to do when true “red lines” are crossed.

The governance landscape

Canadian pension plans operate under several sponsorship models, including single-employer, multi-employer, and jointly sponsored. Some operate under a combination of these models. Structures differ but the core challenge is the same: collective authority has to be exercised in a way that preserves individual fiduciary judgment.

In many single-employer plans, the employer sponsor is the legal administrator and carries out their administrative duties through a pension committee or board subcommittee. 

In jointly sponsored pension plans (JSPPs), sponsors and members share governance often through equal representation in trustee or committee appointments. Many public-sector plans operate under this model. Some plans also separate sponsor functions (such as plan design and funding decisions) from administrator functions (such as investment and plan operations) through separate committees or boards.

Joint governance gives members a meaningful voice and can support transparency and trust, particularly when decisions are difficult. It can also broaden the perspectives offered when decision-making, which matters in areas like risk management, service delivery, and investing where factors (including ESG-related considerations), may be financially material and aligned with the plan’s policies.

Some JSPPs also operate as multi-employer pension plans (MEPPs) with multiple participating employers. MEPPs often deliver economies of scale and professional oversight for employers and portability for employees moving between participating workplaces.

MEPP governance can be more complex because they require collaboration from multiple stakeholders. That complexity has prompted some regulators to publish governance guidance and leading best practices. For example, Ontario’s Financial Services Regulatory Authority (FSRA) has issued MEPP governance guidance that many plans across the country look to as a reference point. 

Fiduciary responsibility: Individual responsibility

Beyond province-specific regulator materials, the Canadian Association of Pension Supervisory Authorities (CAPSA) Pension Plan Governance Guideline provides a practical baseline across jurisdictions. While it is not legally binding, it is influential and trustees are encouraged to adhere to it since it represents the regulators expectations and the industry’s best practices. Its central message is that good governance depends on clear accountability for each participant in addition to sound structures and policies. An effective governance system defines duties, responsibilities, and accountabilities for everyone involved in administering the plan. In other words, governance works best when accountability is real and well understood because that is what makes decisions defensible to members, sponsors, and regulators.

The fiduciary expectation is straightforward. Trustees and committee members are expected to act solely in the best interests of plan members and beneficiaries, and to exercise the care, diligence, and skill that a prudent person would use in dealing with another person’s property. In pensions, “prudence” is less about always being right and more about having a defensible process, informed judgment, and a decision that can be explained.

Even though authority is exercised collectively, fiduciary duties are carried out by individuals. Practically, that means each trustee is expected to participate actively and bring independent judgment to the table: study the materials, ask questions, probe key risks and assumptions, disclose and manage conflicts, and rely on expert advice in a thoughtful way. Whenever a trustee has a genuine concern, it should be raised clearly and constructively so the board can address it through a sound process.

Balancing personal views with the group’s views

“Groupthink” describes what happens when a desire for harmony overrides critical thinking. In pension boardrooms, it can show up as rubber-stamping a consultant’s recommendation, avoiding hard conversations, or letting time pressures replace thoughtful judgment.

Individual responsibility is what gives governance credibility. Members need confidence that their interests were actively considered. Sponsors need confidence that decisions were made prudently and consistently. Regulators and courts need confidence that trustees have brought independent, thoughtful judgment, not just a preference for consensus, to the table.

Canadian guidance recognizes that boards are deliberative bodies. Trustees are expected to contribute expertise, perspective, and judgment, and when the administrator has made a properly authorized and well-governed decision, to support its implementation.

In practice, exercising decision making well can be thought of in three phases: Deliberate, Distinguish, and Defend.

1. Deliberate: exercise independent judgment during discussion

A trustee acting prudently is expected to engage, not simply observe. In practical terms, that means:

• Ask hard questions (especially about assumptions, trade-offs, and second-order impacts).
• Challenge assumptions and request alternatives where appropriate.
• Check alignment with plan terms, funding and investment policies, and other governance policies, as well as applicable law.

2. Distinguish: separate personal preference from fiduciary concern

Not every disagreement is fiduciary in nature. A trustee may dislike a decision (on risk appetite, fees, a service provider, or a communication approach) while still concluding that the board’s decision is reasonable, informed, and lawful. The question is not “Do I like this?” but “Was the process prudent, was the rationale coherent, does it make sense in the circumstances and is it in the best interest of plan members and beneficiaries?”

3. Defend: support the decision once properly made

Once a decision is made through a proper process (without unmanaged conflicts, within authority, and supported by appropriate information), trustees are generally expected to support its implementation even if they argued against it internally. This is not about suppressing legitimate questions; it is about avoiding mixed signals that can confuse members, burden administrators, and undermine confidence in governance. Many Canadian plans reflect this expectation in trustee codes of conduct and governance policies. Moreover, in some jurisdictions, a trustee may be presumed to have approved decisions made by the other trustees, including decisions made in the trustee’s absence, and may be liable for those decisions unless the trustee records or communicates their dissent without delay.

When “red lines” are crossed: What a trustee should do

Canadian governance guidance does not ask trustees to set aside their legal obligations when serious concerns arise. When a trustee believes a true “red line” has been crossed, the response should escalate in proportion to the risk and should be aimed at protecting the plan members and beneficiaries, not “winning” the debate.

Drawing on regulator materials and common governance practice, the following escalation steps are commonly recognized. They also have a practical benefit: they create a record of prudent engagement and reasonable reliance on advice where appropriate.

a. Clearly articulate the concern on the record

If a trustee believes a proposed action is unlawful, imprudent, conflicted, or inconsistent with the plan’s governing documents, they should say so clearly during deliberations and ask that the concern be reflected in the minutes. Documentation is a key element of demonstrating prudence and diligence.

b. Seek additional information or advice

Where uncertainty exists, trustees should request additional analysis or independent legal, actuarial, or investment advice. Using experts is often essential in pensions but the duty is to understand the advice, test it, and ensure it answers the actual governance question faced by the board.

c. Address conflicts of interest directly

If the issue is a conflict (personal or institutional), the trustee has a duty to disclose it and ensure it is managed according to the plan’s conflict of interest policy and applicable legislation. Unmanaged conflicts erode trust quickly and they are among the clearest fault lines in fiduciary governance.

d. Consider formal dissent or resignation

If, after good-faith efforts, a trustee believes the board is proceeding in a way that fundamentally breaches fiduciary duties, plan policies, or the law, continued participation may itself create risk. Canadian governance materials acknowledge that trustees must ultimately decide whether they can continue to discharge their duties in good conscience and in compliance with their obligations. Written dissent can help clarify a trustee’s position and demonstrate that they raised concerns in a timely way to limit their liability but in extreme cases, resignation may be the only responsible course, particularly if it is necessary to avoid complicity in a breach.

Considerations for plan sponsors

Sponsors and committee members can create conditions where good fiduciary behaviour is more likely: clear mandates, robust training, transparent documentation, and well-run processes. Common best practices include:

• Make fiduciary expectations explicit and ensure trustees have the tools to demonstrate they are being met. 
• Appoint (and support) trustees with an appropriate mix of knowledge, skills, and capacity for the role. 
• Document and communicate trustee responsibilities and accountability, including orientation and continuing education, codes of conduct, robust conflict-of-interest policies, and periodic self-assessments.
• Keep minutes that capture decisions and the supporting rationale rather than only attendance and outcomes. Use clear, documented processes for delegating work and selecting, overseeing, and replacing third-party service providers. 

Collective governance is a strength in the Canadian pensions landscape but only when the people around the table behave like fiduciaries and not passengers. The point is not to encourage dissent. It is to insist on the discipline of independent judgment during deliberation, the maturity to accept a defensible decision, and the courage to escalate when fiduciary boundaries are genuinely at risk. Good boards do not require unanimity. They require trustees who are willing to take the time needed to be fully informed, challenge with respect and govern with full confidence in the process.

Jill Wagman, Principal, FSA, FCIA, ICD.D, Eckler Ltd.

A Principal in Eckler’s Toronto pension consulting practice, Jill joined Eckler in 1993 and was the retirement practice leader from 2003 to 2006. She was appointed Managing Principal in 2012, a position she held until May 2023, and Chaired the Board of Directors from 2012 to 2024. Throughout her career, Jill has advised corporations, boards of directors, boards of trustees and government agencies on pension and employee benefits matters including all aspects of valuation, administration, strategic planning, risk management, governance, design, funding and accounting for pension, post-retirement and supplemental pension programs. Jill is a frequent participant in industry and regulatory committees. In 2019 and 2022, she was appointed to a three-member panel of actuaries that peer-reviewed the Actuarial Reports of the Canada Pension Plan (CPP).

Murray Wright, Principal, FFA, FCIA, Eckler Ltd.

A Principal and consulting actuary in Eckler’s pension practice in Vancouver, Murray brings close to two decades of experience across the full spectrum of retirement plan consulting with expertise in strategy and risk management. Prior to moving to Canada in 2019, Murray was Deputy Chief Actuary for a UK based actuarial and risk management consultancy. Murray has served on the Canadian Institute of Actuaries’ project oversight groups on pensioner mortality, Canadian mortality improvements and Big Data / AI.