Member involvement on pension scheme boards continues to grow
New TUC research reveals today (Monday) that 86 per cent of pension scheme boards now have one-third of their trustees nominated by members and many are moving towards 50 per cent representation.
The TUC research - The member voice in pensions governance - shows that six months after the requirement for boards to have one-third of trustees nominated by pension scheme members came into effect, 86 per cent of boards are already complying with the regulation.
The TUC believes these findings show that industry scepticism towards pension schemes recruiting enough member nominated trustees (MNTs) is misplaced. In fact, several schemes have commented that they found it easier to recruit MNTs than employer nominated trustees (ENTs).
The research also shows that 24 per cent of pension schemes have gone beyond the minimum requirement and have at least 50 per cent member nominated representation. Despite claims in some industry quarters that pension schemes and employers are overwhelmingly hostile to a 50 per cent requirement for MNTs, the TUC research found that only 30 per cent disagreed or strongly disagreed with the target.
In order to maintain the growth member involvement on pension scheme boards, the TUC report calls for the Government to implement its manifesto commitment and move towards requiring 50 per cent membership.
The TUC believes it is important for members' voices to be heard in the running of their pensions. MNTs can bring the views, experiences and interests of members to the governance of their pensions, who are the ultimate owners of the investments held in their pension scheme.
Member involvement is also essential to protect schemes from any unscrupulous employers who may act without members' best interests at heart. During the TUC research, a number of respondents made specific reference to the Robert Maxwell scandal.
TUC General Secretary Brendan Barber said: 'It's absolutely vital that members' voices are heard in decisions about the governing of their pensions, particularly in times of economic uncertainty.
'The growing number of member nominated trustees on pension schemes is therefore great news for the millions of people who rely on them to govern their retirement income responsibly.
'These findings shatter scepticism from some industry quarters about recruiting member nominated trustees. In fact, one in four pension schemes are going beyond the legal minimum with at least 50 per cent member representation.
'In order to continue this progress, the Government must implement its manifesto pledge and require all schemes to have 50 per cent member nominated representation.'
The research also shows a disappointing lack of diversity among pension trustees, with boards still dominated by white men over 45. Just 11 per cent of trustees in the schemes surveyed were female, less than one per cent were from a black and minority ethnic background and less than one per cent were under the age of 35.
While many of the trustees in the TUC research are based in male dominated workplaces, such as manufacturing, the research still shows that trustee boards are struggling to reflect the diversity of their workplaces.
Update: Doh! should have read this properly, most schemes have met the 1/3rd requirement, not 50/50. Headline changed...