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Increased investment volatility could trigger additional questions on the decisions of Canadian pension funds as governance reviews come into focus, says Level Chan, a partner in the pensions practice at Stewart McKelvey.

“Where there’s greater volatility, we could expect that triggering more questions about how pension plans are weathering the storm.”

When responding to additional questions and legislative demands, he says plan sponsors are reflecting on increased disclosure measures like detailed reports of investment policies and procedures around newer trends like environmental, social and governance measurements. Canadian plan sponsors are committed to several review practices that put them ahead in terms of governance and management rules, he adds.

Read: Expert panel: Is risk management the new frontier in pension governance?

While plan members may raise questions about institutional investment decisions, he cautions plan sponsors to consider members’ concerns are likely shaped by their personal investment decisions.

“That’s not reflecting the fact that pension plans are invested very differently [from members’ personal investments]. . . . They’re not just investing for one lifetime, they’re investing for many, many lifetimes and pooling the risk associated with all the members and beneficiaries that they represent.”

The 2024 edition of the Global Pension Transparency Benchmark — a report ranking 15 countries on key value-generation elements for the five largest pension funds — ranked Canada at No. 1 with an average governance score of 99 out of 100. Only Canada, Denmark and Norway had at least one pension fund with a governance score of 100.

Read: OMERS facing first governance review in more than 10 years

Last year, the Ontario Municipal Employees’ Retirement System, the Ontario Teachers’ Pension Plan and the Alberta Investment Management Corp. all faced questions about organizational decisions through government mandated reviews, a lawsuit and an executive overhaul respectively.

Moving forward, Chan expects proposed geographical investment disclosures rules from the Canadian government to play a role in discussions around pension governance. Last November, the feds released draft amendments to the Pension Benefits Standards Regulations, 1985 requesting large federally regulated pension plans to disclose the market value of its assets and to list the geographic location of every asset class.

“It’ll be interesting how that could prompt kind of a review in terms of where the that where plans are investing.”

Read: PBSA amendments must clarify role of pension disclosure requirements: PIAC