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Bulk of UK schemes meet trustee requirement

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  • Bulk of UK schemes meet trustee requirement

UK - Almost one-quarter of pension schemes have gone beyond the minimum legal requirement for the appointment of member-nominated trustees (MNTs) and have at least 50% of the board representing members, the Trades Union Congress (TUC) has claimed.

The TUC research report, The Member Voice in Pensions Governance, says that in the six months since the regulations requiring schemes to appoint one-third of MNT to the pension board, 86% of schemes had complied with the regulation.

In addition, 24% of schemes had gone further and appointed at least half of the trustees through member nominations. The survey also revealed that several schemes found it easier to recruit MNTs than employer-nominated trustees.

The research, consisting of interviews with 189 UK schemes with combined assets of £149bn (€188m), also established that only 30% of respondents disagreed with plans to increase the minimum member trustee requirement to 50%.

However, the findings revealed a "disappointing lack of diversity" among trustees, as pension boards were found to be dominated by white men aged over 45, while just 11% were female, less than 1% were under 35 and a similar level were from a black or ethnic minority background.

TUC general secretary Brendan Barber said: "It's absolutely vital that members' voices are heard in decisions about the governing of their pensions, particularly in times of economic uncertainty."

The TUC claimed that MNTs bring the views, experiences and interests of members to the pension board while protecting schemes from "any unscrupulous employers who may act without the members' best interests at heart". It revealed a number of respondents had made specific reference to Robert Maxwell and the Mirror Group pension fund scandal in the 1990s.

But Barber warned that while the growing number of MNTs was "great news", in order to continue the progress "the government must implement its manifesto pledge and require all schemes to have 50% member nominated representation". 

Earlier this month secretary of state for work and pensions James Purnell confirmed that the government remained committed to increasing the legal minimum for MNT participation on pension scheme boards to 50% from one-third.

However, he warned that more "formal research" was needed to assess the impact of increasing the MNT requirement given the increased duties and complexities of becoming a trustee. [See earlier IPE.com article: Gov't wants 'formal' research into 50% MNTs]

The TUC responded at the time by saying that it would "step-up" its campaign for 50% MNTs, including extending its own network of more than 1,000 trustees and building on the success of existing MNTs.

If you have any comments you would like to add to this or any other story, contact Nyree Stewart on + 44 (0)20 7261 4618 or email nyree.stewart@ipe.com

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