Gov't wants 'formal' research into 50% MNTs
UK - The UK government says more "formal" research is needed to assess potential issues before the government will increase the legal requirement for member-nominated trustees (MNTs) on pension boards from one-third to 50%.
In a speech to the Trades Union Congress (TUC) Trustee Network conference, James Purnell, secretary of state for work and pensions, told delegates the UK government does "stand by the commitment" to legally require 50% of pension trustees to be nominated by members.
However, he warned "given the ever greater demands on trustees we need to ensure that they have the greater understanding, expertise and technical competence necessary to fulfil their role".
Many MNTs are likely to be 'lay' trustees, and Purnell highlighted the use of The Pension Regulator's (TPR) code of practice and its Trustee Toolkit, and guidance provided by the TUC to help trustees meet the Trustee Knowledge and Understanding (TKU) requirements.
But he said: "I want to commission some formal research into these issues, so that we can see what the impact would be of getting more MNTs."
"We will continue to move towards delivering on the commitment, but need to do so in way that is safe, in line with concerns expressed by the Pensions Regulator", he added.
However, Brendan Barber, general secretary of the TUC, said despite the government's commitment "there is a nagging sense that not enough progress has been made in delivering this aspiration".
As a result, he warned the TUC intends to "step-up" its campaign for 50% MNTs, and admitted the first challenge is to build on the success of MNTs "who are already seen as a playing a key role safeguarding pensions".
The TUC said it plans to extends its own network of more than 1,000 MNTs and wants to ensure MNTs "remain an absolutely integral part of scheme governance" as he claimed the importance of good governance "cannot be over-stated" in a period "when pension schemes are sadly an obvious target for cost-cutting".
"There can be no doubt that MNTs provide much-needed checks and balances within the institutional investment framework," Barber added.
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