(Updated 28 July '10): The 2004 Pensions Act intended that occupational pension scheme trustee boards should comprise 50% Member Nominated Trustees by 2009. However following extensive lobbying by the NAPF the previous government agreed to a delay and commissioned a research study to see what impacts there might be by raising the level of MNTs from 33% to 50%.
Over 2 years later the independent study conducted by the British Market Research Bureau Qualitative Research has now been released by the DWP. It found that only a “small number” of employers said that they were unwilling to increase the number of MNTs on the trustee board because they were concerned about losing overall control of the pension scheme. We all remember how Robert Maxwell certainly exercised "overall control" of his company' schemes but these days scheme members rightfully believe they a right to an equal say in the management of their own deferred pay.
In contrast the study also found that “Trustee boards that had already met, or exceeded, 50 per cent MNT representation were generally pleased with how the trustee board operated and felt that scheme governance was enhanced, although this depended on whether the Chair had a casting vote”.
Furthermore “there was a sense from MNTs and trade union representatives that one-third MNT representation did not go far enough to creating equality on the board”.
“Having 50 per cent MNT representation was considered to be equal and fair and would allow decisions to be made openly and by consensus. This was a view supported by trustee boards already with 50 per cent MNT representation who were described as generally functioning in a very democratic manner.”
The OPA therefore maintains that the case has now been clearly made and calls on the government to implement the increase to 50% MNTs NOW without further delay.
Background
 Previously James Purnell, the then Secretary of State for Work and Pensions had initiated the study in June 2008 which ensured that the commitment to the 50% level would be delayed.
The OPA, as a principal stakeholder, was not invited invited to contribute to this DWP research and furthermore closed pension schemes were excluded from the study.
At present scheme administrators appear to be unnecessarily limiting the numbers of trustees drawn from the pensioner membership even though these in many cases now constitute the greater majority of scheme membership in closed schemes. Pensioner members often have both the time and commitment to acquire the knowledge and understanding required to fulfil the task whereas active members may well find it arduous and interferes with their main work.
Roger Turner, said: “The Pensions Regulator needs to encourage schemes to end needless restriction of the franchise of pensioner members in accordance with its Code of Practice which requires the selection process to be fair, transparent and proportionate”. More..
In the interests of best practice for scheme governance the OPA would also like to see an independent chairman appointed to trustee boards whenever it was appropriate for the scheme size. |
