Speaking at the Association of Member Nominated Trustees (AMNT) Summer Conference, Labours Shadow Pensions Minister, Jack Dromey, stressed the need for member representatives on pension schemes, at a time of increasing regulatory focus on professionalisation. Dromey highlighted that he and the Labour government are indeed “determined” to push for stronger member representation and fully support the AMNT in its efforts to achieve this.
During his speech, Dromey reaffirmed last year’s statement that Labour wants to increase the requirement of having at least a third member-nominated trustees on pension fund boards to half, seeing this as their “ultimate goal”.
Jack Dromey MP, Shadow Pensions Minster, said: “Whilst it’s important that the voice of the sponsor is heard, crucially, ultimately pension schemes should be to the benefit of their members, therefore the role of member-nominated trustees is of the highest importance. Going forward, one of the things we are determined to drive is for that voice to become yet stronger. If the regulator is moving down perhaps a slightly different path, then that is not a path I would agree with.”
The Shadow Pensions Minister addressed TPR fears over trustee standards and concerns over scheme governance, and suggested member nominated trustees should be trained beyond TPR’s basic requirements in “a fiduciary college within a university” while also endorsing the creation of a trustee federation and ensuring trustees have sufficient time off work to fulfil their duties.
Dromey suggested master trusts and independent governance committees should also have greater duties in terms of member representation, while he dismissed the notion that member representation is not practicable on multi-employer schemes.
Jack Dromey commented: “I do not accept for one moment that you cannot construct an arrangement that has member-nominated trustees at its core. Similarly, any future sector-based collective defined contribution should also aim for at least half of the board to consist of scheme members.
“Regarding upskilling, member-nominated trustees should be trained beyond TPR’s basic requirements in a fiduciary college within a university or have a trustee federation, which would help ensure that trustees get the required time off from their day jobs to enable them to fulfil their duties.”
David Weeks, co-chair of Association of Member Nominated Trustees (AMNT), said: “I would like to thank the Shadow Pensions Minister for supporting the work that we carry out collectively as a team at the AMNT. We believe that the need is to keep the three sides of the pension scheme governance triangle in balance, which is that of the employer; the expert fund managers and consultants, and the scheme members, through their nominated representatives. We aim to further voice our suggestions by contributing to the latest TPR consultation on this topic.”
At the conference, David Farrar, senior policy manager at the DWP, said the department is "really supportive" of member-nominated trustees and noted that while there is currently no legal obligation for master trusts to have any, they are open to lobbying on the matter. Farrar also commented on TPR's proposal to have a professional trustee on every board, saying the DWP views this as a "very long range" ambition.
David Farrar, senior policy manager at the Department for Work and Pensions (DWP), commented: “The department is really supportive of member-nominated trustees. Though there is currently no legal obligation for master trusts to have any, if people feel strongly, they are free to lobby us.
"At the moment there is clearly no possibility of having a professional trustee on every scheme because there aren’t enough professional trustees of sufficient quality. There is also a legitimate question to be asked whether every scheme needs a professional trustee if it has suitable skills and experience on the board already,"
• Labour MP champions the role of member representatives on pension boards as the regulator increases efforts to get more professional trustees on boards
• Dromey reaffirms last year’s statement that Labour wants to move from at least a third member-nominated trustees on pension fund boards to a 50/50 split
• Labour MP wants to see the establishment of a “fiduciary college” within a university to serve for trustee training
• DWP is highly supportive of member-nominated trustees and sees professionalism of the Trustee role as a “very long range" ambition
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