The Pensions Act of 1995 introduced the requirement for one-third of company pension scheme boards to be made up of member-nominated trustees or, in the case of a sole trusteeship set up, member nominated directors.
The vast majority of FTSE 100 companies offered final salary DB schemes to prospective employees. Regulation was, in the most part, still of the light-touch variety. The future of the MNT looked secure. However, in recent years most DB schemes have closed and regulation is leaving some MNTs to question their positions.
Vikki Massarano stated that member trustees are also capable of fostering greater engagement from a scheme’s membership.
She went on further to note that the one downside of consolidation and the use of master trusts can be the lack of involvement of members in the operation of the scheme. “Increased use of professional trustees is beneficial where it results in increased efficiency and good governance. Nevertheless, it would be a shame if this led to a situation where MNTs were not used at all”.
In Vikki’s experience, she has observed an increased interest for some schemes. She says that members may have become keen to be involved in trusteeship because of recent press coverage of high-profile fund failures.
Read Vikki’s comment in Pensions Age here.