Following our 2007 survey of its members, the OPA expressed concern over the poor representation of pensioner members on trustee boards.
Roger Turner, Executive Officer of the OPA said:
“Despite pension schemes have an overwhelming majority of non-active members, including 45% of members being retired, pensioner members only make up 11% of trustees.
“This statistic is of serious concern, trustees should act in the interests of all members. Active members make up the majority of member trustees and in conflict situations company policy is normally followed, often at the expense of pensioner members.
“This was particularly apparent during the period when there were perceived surpluses in pension schemes. Extensive contribution holidays were taken by employers, with little or no consideration for improving benefits for pensioner members.”
The Pensions Regulator’s Code of Practice on Member Nominated Trustees was issued following the 2004 Pensions Act, and it stipulates that all active and pensioner members, or organisations which adequately represent them*, must be involved in the nomination of trustees.
The code, which came into force at the end of October '06, also states that trustees should determine the new arrangements for their scheme taking account of the principles of:
proportionality, fairness and transparency,
and that arrangements are put in place to ensure that at least one-third of the total number of trustees are member nominated. (This proportion will be raised to 50% in 2009.)
The OPA survey revealed that many schemes would not comply in time. Of the 31 schemes that were surveyed by the OPA, only 19 had the arrangements in place to fulfil the Code of Practice, with many employers relying on opt out arrangements to avoid meeting the deadline.
Roger Turner said:
“We believe concessions by the Pensions Regulator will allow pensions schemes to delay up to a year before they have to comply with the Code of Conduct. This is totally unacceptable given that the abolition of opt outs was proposed as far back as 2000. It is vital that the Regulator does not allow employees to further misrepresent their pension scheme members.”
* This clause was only included in the Pensions Bill after extensive lobbying by the OPA.
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Investment & Pensions Europe (IPE)