UK looks to up member trustees
UK - The government is looking to change current legislation in a bid to increase the number of members on trustee boards.
The new law will put an end to employers opting-out of selecting a certain level of members as trustees.
Some leading lawyers believe the changes could become law as early as next spring – much sooner than anticipated.
The parliamentary under-secretary for work and pensions Maria Eagle said the new legislation will provide scheme members with an opportunity to have member nominated trustees.
She said: “Members' trustees help to give trustee boards a better balance of outlooks and experience. They also help to give members confidence, and they encourage schemes to look carefully at how they are run.”
She added: “Member nominated trustees are a good way forward with regard to trying to reassure members of occupational schemes.”
Rowe & Maw partner Anna Rogers said new rules would be simpler but she was concerned that the move could actually reduce levels of member trustees.
She said: “The worry is that with some independent schemes where the allocation is currently 50-50 with employer and member nominations, the rigid one-third members and two-third employer nominations would mean less member nominations. This is something we are looking into.”
And Hammond Suddards Edge solicitor Francois Barker said the new measure would increase costs.
He said: “Many employers have used opt-outs – with the permission of members – as a cost-effective way of complying with the member-nominated trustee legislation.”
He continued: “It is a shame that once the new legislation comes in this will no longer be an option for employers.
By Shifa Rahman
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