The Pensions Regulator

Guidance for trustees

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Appointing and removing trustees

This section of the guidance describes the requirements for appointing and removing trustees:

• Who has the power to appoint trustees?
• Member-nominated trustees and member-nominated directors
• Removing trustees
• Actions to take if you are removed as a trustee

See also the Trustee toolkit module covering The Trustees' role.

Who has the power to appoint trustees?

The trust deed normally gives the employer or the existing trustees the power to appoint trustees (subject to the requirements for member-nominated trustees).

The first trustees of the scheme are named in the trust deed. Any later appointments will usually be made by an amending deed or deed of appointment (or by the method set out in the trust deed).

In certain circumstances, a trustee can be appointed by a court or the Pensions Regulator and may take over some, or all, of the powers of the existing trustees or just strengthen the board.

Member-nominated trustees and member-nominated directors

The law requires trustees to ensure that arrangements are in place, and implemented, that provide for at least one-third of trustees, or at least one-third of directors of a trustee company, to be member-nominated. These member-nominated trustees (MNTs) and member-nominated directors (MNDs) must be nominated by at least the active and pensioner members of the scheme and selected by some or all of the members.

Provided that some basic requirements are met, trustees will have the flexibility to design arrangements for nomination and selection which best suit their scheme.

The code of practice MNT/MND - putting arangements in place and guidance on MNTs and MNDs tells you more.

See also the Trustee toolkit module covering The Trustees' role

Removing trustees

A trustee will no longer be a trustee, when they:

• resign or die;
• are removed or automatically has to retire under the conditions of the trust deed (including appointed MNTs or MNDs whose period of office has expired);
• are removed by the other trustees if this is allowed by the trust deed and law;
• are removed in accordance with the Trustee Act 1925;
• receive a transfer notice from the Board of the Pension Protection Fund under which it assumes responsibility for the scheme;
• are removed by the court; 
• are prohibited from being a trustee by the Pensions Regulator; or 
• become automatically disqualified.

Depending on the trust deed and rules and subject to the MNT and MND requirements, your appointment as a trustee may not automatically end when you stop working for the employer or when you are no longer a member of the pension scheme.

MNTs and MNDs who stop being scheme members

In the case of an MNT or MND who is a member of the scheme when they were appointed, your role as trustee may end if you stop being a member. This may happen, for example, if you are no longer an active member of the scheme and you transfer all your benefits to another pension arrangement.

Following procedures set out in the trust deed

The trust deed usually sets out how a trustee should retire or otherwise be removed. You must follow that procedure as your responsibilities as a trustee will continue until your removal is legally effective.

Actions to take if you are removed as a trustee

If you are removed as a trustee, you should seek advice as to what action you need to take. For example, if the scheme has any property, such as land, amongst its assets, you may need to sign formal transfer forms to transfer ownership of the property to the replacement trustee.

Even after you have been removed, you will continue to be liable for the decisions you took when you were a trustee. You should therefore make sure that any indemnity insurance you have continues to provide cover for an appropriate period after you are removed.

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