Should Trustees be Paid?
At the IFEBP Canadian Legal & Legislative Update in Winnipeg this past May, I attended an excellent pre-conference workshop that tackled a deceptively simple question: Should trustees of multiemployer plans—for both pension and health & welfare plans—be paid for their service?
It’s a question that sparks strong opinions, and for good reason. Trustees play a critical role in the governance of multiemployer benefit plans, yet the practice of compensating them varies widely across jurisdictions and plan types. The session explored the arguments on both sides, and I wanted to share some of the key takeaways—particularly for those of us serving as, or working with, trustees in the Canadian landscape.
The Role of Trustees: More Than Just Volunteers
Let’s start by acknowledging the scope of the role. Trustees are fiduciaries. They are expected to act in the best interests of plan members, make informed decisions about funding, investments, and administration, and stay current on a constantly evolving regulatory landscape.
This isn’t a ceremonial role. It’s a job—one that requires time, diligence, and a willingness to engage with complex material. And yet, in many cases, trustees are unpaid volunteers.
Why Pay Trustees?
One of the strongest arguments in favour of compensation is that it recognizes the value of the work. Paying trustees:
- Acknowledges the time commitment involved in attending meetings, reviewing materials, and participating in training.
- Encourages accountability and professionalism, aligning expectations with compensation.
- Expands the pool of potential candidates, especially those who may not be able to afford to volunteer their time.
- Helps attract individuals with specialized skills, such as legal, actuarial, or investment expertise.
In the workshop, we heard examples of plans that introduced compensation and saw improvements in engagement and retention. One plan noted that paying trustees allowed them to recruit more diverse voices—people who brought new perspectives but might not have otherwise been able to participate.
Compensation vs. Lost Wages
An important nuance that came up in the discussion was the distinction between compensation and reimbursement for lost wages.
For many active member trustees—especially those in the public sector—time spent on trustee duties is often covered by their employer. In these cases, the trustee may not be “paid” by the plan, but they are not financially disadvantaged either.
However, this isn’t always the case. Some trustees must use vacation time or unpaid leave to attend meetings or training. For them, compensation isn’t a bonus—it’s a way to ensure they aren’t penalized for serving.
When trustees are remunerated with a ‘replacement wage’, concerns may arise if the compensation varies among trustees—for instance, within a jointly sponsored pension plan, differing between a union member and a highly compensated executive representing the employers.
Then there are retired member trustees, who don’t have an employer to fall back on. Some argue that retired trustees shouldn’t be compensated because they’re already collecting benefits from the plan—essentially “double dipping” —but I don’t agree with that view. A pension is a form of deferred compensation—earned over a career of service. It’s not a substitute for the time and expertise a retired trustee brings to the table. Their contributions are just as valuable as those of active members, and they deserve to be recognized accordingly.
Why Not Pay Trustees?
On the other hand, there are valid concerns about introducing compensation:
- Motivations may shift. Some worry that paying trustees could attract individuals more interested in the paycheque than the mission.
- It could create tension between paid and unpaid board members, especially in hybrid models.
- Perception matters, particularly in the public sector. Stakeholders may question why trustees are being paid when the plan is underfunded or facing scrutiny.
- It may not be necessary. Some plans have long histories of effective volunteer governance and see no need to change.
There’s also the philosophical argument: trusteeship is a form of service. For some, the idea of being paid to serve feels at odds with the spirit of the role.
What the Data Tells Us
The session included benchmarking data that showed a wide range of practices across Canada. Some plans offer stipends or per-meeting fees, while others provide honoraria or reimburse expenses only. The amounts vary significantly, and so do the rationales.
Interestingly, there’s no clear correlation between compensation and plan size, complexity, or performance. This suggests that the decision to pay trustees is often driven more by culture and governance philosophy than by operational necessity.
Considerations for Your Board
If your board is considering whether to introduce or revise trustee compensation, here are a few questions to guide the discussion:
- What is the purpose of compensation? Is it to attract talent, recognize effort, or improve performance?
- How will compensation be structured? Will it be a flat fee, per-meeting rate, an hourly rate, or tied to responsibilities?
- How will compensation interact with lost wages or employer reimbursement? Clarity here is key to fairness.
- What benchmarks exist? Look to similar organizations or jurisdictions for guidance.
- How will transparency be maintained? Clear communication with stakeholders is essential, explaining the choices made.
- What are the optics? Consider how the decision will be perceived by plan members, sponsors, and the public.
- What does the Trust Agreement say? This foundational document governs the powers and responsibilities of the board. Any decision about compensation must align with the terms of the Trust Agreement—or be amended accordingly. It’s essential to review this document carefully before making any changes.
- What is the size and financial health of the plan? Larger or better-funded plans may be in a stronger position to offer compensation, while smaller or more resource-constrained plans may need to weigh the cost-benefit more carefully.
A Balanced Approach
There’s no one-size-fits-all answer. Some plans may benefit from compensating trustees, while others may find that volunteer governance continues to serve them well. What matters most is that the decision is made thoughtfully, with the plan’s long-term health and member interests at heart.
In the workshop, we were reminded that there is no ‘right answer’, and encouraged to review the questions in the list above periodically to determine if a change was warranted. As plans evolve, so too should their governance practices.
Final Thoughts
Whether you’re a trustee, an employer, a union, or an advisor, I encourage you to reflect on the value of the trustee role. Compensation is just one piece of the puzzle, but it’s an important one—especially as we strive to build boards that are diverse, engaged, and equipped to perform their duties.
If your board has tackled this issue, I’d love to hear how you approached it. Let’s keep the conversation going.
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