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GLOSSARY

Member-Nominated Trustees definition

Published by a LexisNexis Pensions expert

What does Member-Nominated Trustees mean?

Most (but not all) schemes must permit up to one-third of the trustee board to be member-nominated. There are no rules as to how such trustees are appointed but there are regulations (Occupational Pensions Schemes (Member-nominated Trustees and Directors) Regulations 2006 (SI 2006/714) and a Code of Practice issued by the Pensions Regulator.

Such trustees are not expected to be experts, but should have some basic training. A Member-Nominated Director (MND) is a director of a corporate trustee who is selected by the members of an occupational pension scheme under the member-nominated trustee legislation as set out in the Pensions Acts 1995 and 2004 and governed by a code of practice. An MNT is a trustee selected by members of an occupational pension scheme.

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Appointment, removal and resignation of pension trustees—checklist

Appointment, removal and resignation of pension trustees—checklist When appointing and removing pension trustees: • Ensure that the power to appoint and remove trustees is exercised for a proper purpose. • Check the provisions of the trust deed and rules and ensure that trustees are appointed, removed or retire in accordance with them. • Where a company is sole trustee, check the provisions of the company's articles and ensure that directors are appointed, removed or retire in accordance with them. • Check whether there are any restrictions on the appointment or removal of trustees (eg a maximum or minimum number of trustees) and ensure that the appointment or removal does not breach them. • Ensure that any changes do not reduce the number of trustees below the quorum for trustee meetings. • Ensure that the appointment and removal of trustees is in accordance with the requirements for appointing member-nominated trustees or directors. • Remember to appoint new trustees by deed so that ownership of the trust assets vests automatically in the...

Appointing member-nominated trustees (MNTs) and member-nominated directors (MNDs)—checklist

Appointing member-nominated trustees (MNTs) and member-nominated directors (MNDs)—checklist Do the requirements for appointing member-nominated trustees (MNTs) or member-nominated directors (MNDs) apply? • Check whether the scheme is a trust-based occupational pension scheme. • Check whether the scheme is exempt. If it is, record process by which that conclusion was reached. Which of the requirements apply: member-nominated trustees (MNTs) or member-nominated directors (MNDs)? • Check whether the trustees are individuals, corporate trustees or both. • If the trustees are individuals or a mixture of individuals and corporate trustees, the MNT requirements apply. • If the trustee is a sole corporate trustee or the trustees are all corporate trustees, the MND requirements apply. • Where a company is trustee of more than one scheme to which the MND requirements apply, decide whether the requirements apply to it separately for each scheme, as if the schemes were a single scheme or a mixture of both. The requirements • Ensure at least one-third of the trustees are MNTs or one-third of the directors are...

Discover our 2 Checklists on Member-Nominated Trustees

Member-nominated trustees (MNTs) and member-nominated directors (MNDs)

STOP PRESS: On 28 March 2024, the Pensions Regulator (TPR)’s new General Code of Practice came into force, through the Pensions Act 2004 (General Code of Practice) (Appointed Day, Amendment and Revocations) Order 2024, SI 2024/431. The General Code merges and updates ten of TPR’s existing codes of practice into a single code made of ‘51 shorter, topic-based modules’. TPR say this new format will make it easier for governing bodies to find TPR’s expectations and certify whether they meet them. The ten codes of practice affected are those relating to reporting breaches of the law, early leavers, late payment of contributions, trustee knowledge and understanding, MNTs/MNDs, internal controls, dispute resolution—reasonable periods, DC governance and public sector governance.Among other things, the General Code of Practice includes a module on trustee remuneration and sets out TPR's expectations on administration and maintaining an effective system of governance (ESOG), as required by the Occupational Pension Schemes (Governance) (Amendment) Regulations 2018, SI 2018/1103 (which implement IORP II). Scheme governing bodies will be expected to...

Pension schemes, trustees and their advisers—beginners’ guide

Pension schemes, trustees and their advisers—beginners’ guide This guide is primarily aimed at trainees, newly qualified lawyers and other persons who are new to or unfamiliar with pensions law. Background Trustees play a vital role in the pensions arena. This is particularly so in respect of occupational pension schemes, but trusts and trustees can also be found in other guises in relation to pensions. For example, this includes trusts established by pension and life assurance schemes to accept death-in-service lump sum payments due to beneficiaries who are unable to give 'good receipt' in respect of payments due to them, such as children under the age of legal majority and people who are otherwise legally incapable. Pension schemes which are established as trusts are subject to the usual rules of trust law (eg the general requirement that trustees must act in the best interests of their beneficiaries, subject of course to applicable law. In addition, pensions-related case law and legislation impose further specific requirements and obligations on pension scheme...

Discover our 22 Practice Notes on Member-Nominated Trustees

Pensions warranties—defined contribution scheme—share purchase agreement

Pensions warranties—defined contribution scheme—share purchase agreement Replace Schedule 4, paragraph 19 of Precedent: Share purchase agreement—pro-buyer—corporate seller—conditional—long form with the following: 1 Pensions 1.1 Except as provided for by the Pension Scheme, the Company is not and has never participated in an arrangement or agreement to provide pensions, annuities, lump sums, gratuities or similar benefits on retirement, long-term ill-health or death, or pursuant to a pension sharing order, in relation to the service or historic service of a present or former employee of the Company or any other person, or for the benefit of that individual’s dependents. 1.2 All benefits under the Pension Scheme are provided on a money purchase basis. No assurance, guarantee or promise has been made to any employee of the Company as to the amount of benefits to be provided under the Pension Scheme. 1.3 Copies of the following documents have been Fairly Disclosed to the Buyer: 1.3.1 the governing documentation of the Pension Scheme including the trust deed and rules and all ancillary and...

Member-nominated trustee arrangement

Member-nominated trustee arrangement To: the [Active AND/OR Deferred AND/OR Pensioner] Members (“[the Members]”) of the [insert name pension scheme] [“the Scheme”] From: The Trustees of the Scheme Date: [Insert date sent to members] Background Under the Pensions Act 2004 (PeA 2004), and the Pension Regulator’s General Code of Practice (“the General Code of Practice”) it is compulsory for occupational pension schemes to have arrangements in place that provide for at least one third of the trustees to be nominated by the members (unless the scheme is exempt under legislation). The General Code of Practice provides that the MNT arrangement should include provision for periodic review to establish whether the arrangement remains appropriate for the Scheme, and this should take place every three to five years. The General Code of Practice also provides that the arrangement should be reviewed when there is a material change to the Scheme’s circumstances and/or membership. In accordance with the PeA 2004 and the General Code of Practice, the trustees of the...

Dive into our 9 Precedents related to Member-Nominated Trustees

A former member-nominated director (MND) (who has just lost their position as MND) of a corporate trustee would like to challenge the result of the election as they believe one of the newly elected MNDs did not follow the rules of the process. Should the former MND bring a challenge through the scheme’s IDRP process or go straight to the Pensions Regulator?

A former member-nominated director (MND) (who has just lost their position as MND) of a corporate trustee would like to challenge the result of the election as they believe one of the newly elected MNDs did not follow the rules of the process. Should the former MND bring a challenge through the scheme’s IDRP process or go straight to the Pensions Regulator? We have assumed that the pension scheme concerned is a defined benefit scheme and that the former MND is a member of the scheme. Whether the former MND should first challenge the result of the MND election through the pension scheme’s internal dispute resolution procedure or complain directly to the Pensions Regulator depends on the nature and seriousness of the breach. Under section 10 of the Pensions Act 1995, the Pensions Regulator has the power to fine trustees for breach of the statutory requirement to put in place and implement arrangements which provide for at least one-third of the total number of directors of a...

Where a company is appointed as a corporate trustee of a pension scheme in place of a board of individual trustees (as part of which the individual trustees become directors of the corporate trustee), is there a need to re-run the MNT/MND process following the appointment of the corporate trustee?

Where a company is appointed as a corporate trustee of a pension scheme in place of a board of individual trustees (as part of which the individual trustees become directors of the corporate trustee), is there a need to re-run the MNT/MND process following the appointment of the corporate trustee? If the pension scheme has individual trustees, their replacement by a corporate trustee needs to comply with the provisions of the sections 241–243 of the Pensions Act 2004 (PeA 2004) and the Occupational Pension Schemes (Member-nominated Trustees and Directors) Regulations 2006, SI 2006/714, dealing with member-nominated trustees (MNTs) and directors (MNDs). For more information on these requirements, see Practice Note: Member-nominated trustees (MNTs) and member-nominated directors (MNDs). In practice, a change from individuals to a corporate trustee (with the same individuals as directors now) should be

See the 2 Q&As about Member-Nominated Trustees