Thoughts On Building An Effective Pension Governance Function: Two Differing Points Of View

“The purpose of this book is to assist pension boards in improving their decision-making.”

From the new book “Decision-Making for Pension Boards”By Alfred Slager and Martijn Vos

“Pension boards are responsible for the governance of the fund, but do not conduct its day-to-day activities themselves. Rather, they enunciate the mission, establish the goals and policies, design a fiduciary structure with appropriate decision rights, and monitor the ‘what’ and ‘why’ of the fund’s achievements.”

From the 1998 book “Pension Fund Excellence”By Keith Ambachtsheer and Don Ezra

What Do Pension Boards Do?

Reading their book, it quickly became clear to me that authors Slager and Vos and I have different perceptions of what pension boards are, and what they do. The pension boards in my books and articles are groups of outside fiduciaries with the primary task to ensure that the pension organization they are overseeing has a clear purpose and that the organization has the requisite plans and resources to achieve it.ⁱ In contrast, the pension boards in the Slager-Vos book seem to be primarily decision-making bodies that not only ensure the organization has a clear purpose, but also create the plans and acquire the resources to achieve it.