The Pensions Regulator

Member nominated trustees code of practice laid before Parliament

Ref: PN06-25
14 July 2006

The Pensions Regulator's code of practice 'Member-nominated trustees and directors - putting arrangements in place' has been laid before Parliament.

The code provides pension scheme trustees with practical advice and principles on how to comply with legislation on member-nominated trustees and member-nominated directors.

Trustees are required to ensure that arrangements are in place, and implemented, for at least one third of trustees to be member-nominated; or at least one third of directors of the trustee company to be member-nominated.

The arrangements must include a nomination process, a selection process and other statutory requirements.

The code of practice can be viewed on the regulator's website: www.thepensionsregulator.gov.uk

The code will not come into force until it has been laid before Parliament for 40 sitting days (excluding recesses).

Editor's notes

• Under the Pensions Act 2004, trustees are required to ensure that arrangements are in place, and implemented, for at least one third of trustees to be member-nominated; or at least one third of directors of the trustee company to be member-nominated. The Department for Work and Pensions regulations came into force on 6 April 2006.
• The code has been laid before Parliament. There will be a period of 40 days at the end of which, if no representations are made, the code will be brought into force. Although the code may not be the final version it does contain the Pensions Regulator's expectations. Therefore, trustees and employers can be confident they can start to act in accordance with the guidance contained in the code.
• Codes of practice are not statements of the law. However, they do have evidential value, meaning they will be taken into account by a court or tribunal where relevant.
• The Pensions Regulator is the regulator of work-based pensions in the UK, with wide ranging and flexible powers under the Pensions Act 2004.
• The powers of the Pensions Regulator include the ability to:
  • collect more detailed scheme information;
  • issue improvement notices and third party notices, enabling the regulator to ensure problems are put right;
  • freeze a scheme that is at risk, while the regulator investigates; and
  • prohibit trustees who are judged not fit and proper to carry out their duties.

  The Pensions Act 2004 also imposes a statutory obligation on 'whistleblowers' to report suspected breaches of the legislation to the regulator.