UK - The government will not make a compulsory increase to the number of member-nominated trustees on scheme boards - even though it would boost confidence, delegates at a recent conference heard.
Pensions minister Malcolm Wicks said the government was changing the law so that companies would no longer be able to opt out of regulations that required at least a third of trustees to be member-nominated.
But Wicks said that while he was “sympathetic” to calls for increasing the number of MNTs to 50%, it must happen voluntarily.
He said changing the requirements would cause disruption to schemes and that it was vital to ensure trustees were first “competent” enough to carry out their duties.
Wicks said: “I am aware that many of you would have liked us to go further and require that at least half trustees are member-nominated. Firstly, let me say that we remain sympathetic to the idea of half of trustees being member-nominated. It should be our aim to move toward that figure.
“But we have to recognise the disruption that moving to 50% would cause when the Pensions Act established one-third as the norm. Schemes would need time to make the transition. And it is vital to ensure that all trustees – member-nominated or otherwise – are competent and confident in carrying out their duties.”
Wicks also tried to reassure trustees that government measures, which will require trustees to have a “appropriate knowledge” of scheme matters, would not be a burden on them.
He said that “knowledge and understanding” would not be a pre-condition of being a pension scheme trustee and that new trustees would be given time to acquire those skills.
“We do not expect every trustee to be an expert in every aspect of pensions law and administration – that would be unrealistic. But we do expect trustees to be able to demonstrate, at the very least, a good, solid understanding of the scheme rules and a broad knowledge of issues,” he said.
Partner Insight: Members' evolving needs and expectations are driving changes in scheme administration. As the pensions landscape inevitably continues to change, how will your scheme's approach need to develop to keep pace?
The Pensions Regulator (TPR) is "working closely" with government contractor Interserve and the trustees of its defined benefit (DB) pension schemes, it has confirmed.
The industry has welcomed the Department for Work and Pensions' (DWP) consultation on defined benefit (DB) consolidation as a way to address scheme covenant issues.
BMO Global Asset Management has opened a UK fiduciary management business, promising a "truly open architecture" approach to deliver "better client outcomes".