What do we want? More MNTs; When do we want them? Now!

I believe that the vast majority of us working in the pensions industry in the UK (no matter what our individual role) have been given a remarkable opportunity to enjoy ourselves immensely and help millions of people prepare for and enjoy their retirement.

This is NOT a down at heel industry. It is not an industry looking at the exit door and it is not an industry which citizens avoid at all costs. The opportunity to enjoy what we are involved in as we deliver quality work to people who need our advice and guidance is really the glitter on our organisations - which reminds me of the song 'Never Enough' in the musical The Greatest Showman (2017).

At this time of year when elections for national, regional or local government take place, I thought it would be appropriate to publish a manifesto for the Association of Member Nominated Trustees (AMNT), concentrating on the needs, use and value of MNTs.

Following the implementation of the Pensions Act of 1995, a pension trustee board had to have at least one third of its membership drawn from the ranks of its members.

Today the pensions scene is truly different from the mid-1990s, with collective defined contribution (CDC) schemes, defined contribution (DC) schemes and defined benefit (DB) schemes, all of which have an oversight board. In our view, the voice of the member could easily be lost in the fundamental changes that lie ahead – and that would be a seriously retrograde step.

So, to ensure that member protection remains central to pensions governance we have launched a manifesto which highlights that:

1. The inclusion of the member voice in governance is crucial as part of a well-balanced, diversified board of trustees. Member trustees are the only group with ‘skin in the game' in the decision-making of the pension scheme and with no business interests in the process. There is no way in which this can be replicated. We call for a change in the law to make it mandatory for a minimum of 33% of all scheme boards to be made up of MNTs.
2. There must be more protections and support for MNTs, including a legal right to time during working hours to complete their trustee duties.
3. Member representation within the governance structures of defined contribution master trusts and emerging collective defined contribution schemes must be compulsory.
4. Any transition to a professional corporate sole trustee (PCST) model from a broader trustee board structure should only be permitted when it has "the considered and advised agreement of the existing board" and without "coercion of employed trustees". If no agreement can be reached then members should be consulted and The Pensions Regulator (TPR) notified before the change is made.
5. Learning needs to be at the centre of a scheme board's activities. The role of any trustee is demanding but there are ways to enhance learning. Within increasingly large schemes, there will already be members with significant transferable skills who should be encouraged to take up such a role. There are also plenty of member trustees who have completed the accreditation qualification, (the same qualification under discussion as to whether it should be mandatory for professional trustees). However, there are even more member trustees who have enquired about becoming accredited but have been refused time or funding by their employer. This attitude of restricting accessibility to education by refusing funding or adequate time off needs to change.
6. Due to falling numbers of MNTs there should be a recruitment campaign with a "your scheme needs you" message.

So, there you have it, six major tenets of a future pension scheme organisation. MNTs bring a "member perspective" to trustee boards, fostering trust and ensuring diversity.

As the industry shifts toward professional sole trustees and master trusts, experts warn that the direct link between members and schemes is weakening. Critics argue that MNTs can be a "hinderance" due to a lack of technical understanding. However, the prevailing view is that their "common sense" and member-centric lens outweigh any technical hurdles - provided they receive proper training. There is also a long-standing industry belief that finding willing MNTs is difficult. However, recent research suggests this is often exaggerated, as many schemes are actually receiving high-quality applications.

Call me old fashioned, but a manifesto should be about what you believe, so I will direct my "anti-comments" to just one aspect. That is to some of the boards of organisations that have been set up to offer advice to the pensions industry, including to trustee boards. Chief executives, chief investment officers (CIO), directors, ex-directors, fund managers, outsourced CIO's and paid advisers of professional firms can be found on either the boards or the governance committees of these organisations, yet there is either little or no sign of ordinary trustees. This needs to be addressed.

The average trustee involved in current pension schemes is someone who is associated with the scheme or works for the employer. However, these people rarely get to sit on the oversight [industry wide] bodies. And some of these bodies even have the cheek to call themselves ‘trustee committees'. That hypocrisy needs to end.

MNTs were introduced for a reason – to protect members interests. They have proven to be a vital part of the governance structure for the last 30 years. They should be nurtured and not discarded just because most people working today have forgotten the outrageous behaviour of Robert Maxwell and his advisors.

So to go back to the beginning of this article and misquote the famous pop song of 2017 'Never Enough' in the musical The Greatest Showman, we can Never, Never, Never, Never have too many member nominated trustees. 

John Flynn is co-chair of the Association of Member-Nominated Trustees