AMNT: Caring for members is at the heart of everything we do

Care, expressed legally through fiduciary duty, sits at the heart of all trusteeship. Being chosen to represent your colleagues gives it a personal extra edge.

Above all, we want our members to enjoy a good retirement. That is why pensions were introduced. We need to use their savings and their employers' contributions wisely and carefully on their behalf.

But weighing the options soon raises difficult questions and choices. In a defined benefit (DB) scheme we may be investing for decades, which requires judgements about what the long term will look like and the world into which our members will retire. In a defined contribution (DC) scheme we also want the best possible outcome, which calls for a careful balance of risk, return and liquidity up to the point at which members take control of their savings and assume all of the risk.

Clarity on fiduciary duty

Trustees are therefore keen to see guidance on how fiduciary duty should be exercised where the position is uncertain. Some lawyers tell us the law is clear cut. Others offer quite different interpretations. Our wish for certainty does not extend to becoming a test case in which the courts decide which lawyers are right!

Investment decisions made in the long-term interest of members inevitably sit within a wider context than immediate returns. That context includes calls for support for the UK economy, the need to limit harm from climate change while backing the transition and a host of geopolitical and social developments that could affect financial outcomes and the circumstances in which our members retire.

We urgently need guidance on how far trustees can go in these complex areas and what documentation will be expected of them. Trustees must feel safe to make careful and considered decisions. Thinking about how the future shape of the world may affect members finances is a definite part of the ‘care' we must extend.

Surplus and the member voice

For DB members there are also new matters to negotiate with sponsoring employers. Since the 2026 Pensions Act, surpluses give trustees the opportunity to improve benefits through discretionary or even one-off increases, while allowing employers to receive some return of surplus.

Schemes may also choose to run on beyond the point at which buyout and wind-up become possible, sharing ongoing surpluses between members and employers, although trustees are mindful of the additional risk this places on members.

These strategic questions go to the heart of caring for members through the management of risk and return.

It is welcome that the Act requires trustee agreement before any surplus can be returned to an employer, whether in full or as part of an arrangement that also benefits members. However, life may not prove so simple. Some pre-1997 pensioners have already been denied affordable increases proposed by the trustees because their sponsor exercised their power of veto.

The same overriding powers remain available to sponsors to block any sharing with members. Surplus that has often been built up through higher member contributions, reduced accrual and capped inflation increases could remain locked in until wind-up, leaving trustees powerless to act and members disadvantaged.

Administration with compassion

Caring for members is not only about returns. It is also about the day-to-day administration that gives members confidence their pension is in good hands. Whether it is run in-house or outsourced, trustees take their oversight seriously. It is encouraging that trustee questions and decisions are prompting insurers to improve and develop their administration services.

Helping members make good decisions

Care also means helping members to make good decisions, which depends on communicating well with them. This matters most for DC members, who could improve their retirement outcomes by increasing contributions and who currently have to manage their retirement savings themselves or decide what other provision to make.

Guided retirement may offer better outcomes, but only if trustees are able to understand the different groups within their membership well enough to provide guidance that will fit alongside the rest of their financial lives. We have seen, (from Royal Mail) that members having confidence in the trustee board through MNTs can help when there are difficult choices to make.

The MNT voice will continue to matter

But many pensions are now being moved to master and mega trusts where the member/saver has little voice.

This must be addressed and AMNT is calling for all trust-based pension scheme boards to include at least one-third member representation, regardless of scheme size or structure. These member trustees should be properly resourced with training, support and capacity to guarantee their representation is impactful and not merely symbolic.

We are in a time when many of the things above are under discussion or development and pension provision is undergoing major change, with more to come when the Pensions Commission reports next year. Member-nominated trustees have a vital part to play in considering how the new proposals will affect not only trustees but also all their scheme members. The AMNT as the collective voice of MNTs, will continue to speak up for those who rely on our expertise, protection and care.

Maggie Rodger is co-chair of the Association of Member-Nominated Trustees