So what level of understanding should MNTs have in your opinion?
What the trustees are doing is acting on behalf of their members and they’re balancing what return they want to have with what risk they’re being asked to carry in order to achieve the cashflow needed to pay pensions. I think they need to keep that overall perspective in view and then weigh up the individual propositions that are put to them with that in mind. I think they need to be reasonably informed but they don’t need to be experts, as per my ministerial analogy.
What else motivates people to become MNTs?
Roughly speaking, MNTs come from 4:1 management to trade union-type backgrounds. Individuals tend to fall into three categories: one is people who work for a company and want to represent their fellow employees. They represent about a third. The second group is people who did work for the company but are now retired who remain as MNTs for the same sorts of reason. Then the third group are those who become a trustee and then change job. The problem then becomes will your new employer give you time off to attend to the pension affairs of your old employee?
How does the AMNT help MNTs to better perform their role?
Does training come into what you do? We think training is important and, clearly, our view is that the trustees who come forward to do this role ought to be well qualified to do it. Our model is that trustees certainly ought to complete The Pensions Regulator’s trustee toolkit and be up to speed on trustee knowledge and understanding (TKU). Beyond that, we seek to be the interface
between our AMNT sponsor companies and the trustees so that the trustees have an opportunity to see what the recent developments in the marketplace are. The other way of aiding MNTs is through encouraging people to take part in commercial training and attain formal qualifications. We don’t offer any training ourselves, but we may think of doing it in the future. One of the stumbling blocks seems to be who pay the fees for the examinations, especially as most trustees are not remunerated. I think we’ll need a bit more work on that one.
Should MNTs be remunerated for their time and effort?
I do think there does need to be some more debate on remuneration and we’ve flagged that up with the regulator. I think more boards will consider it and maybe the regulator should consider putting forward proposals for or recommendations on that front. The other question which is a bit more difficult, I think, is whether MNTs could serve on more than one board. My thinking is when you’ve got things like tri-annual evaluations that only come up from time to time, it slips from the top of MNTs’ focus and it’ll be some time before it comes back again. However, if they had the experience of being on a second board, it might stay at the top of their awareness for longer. There are quite a lot of smaller schemes and there may be a push for an industry-wide consolidation of schemes which aren’t so well run. I think there’s scope there for our members using their expertise to support such consolidation.
So the remuneration point is one for the regulator?
I think it needs to have some sort of official momentum behind it. Our members largely go into trusteeship for public spirited reasons and wouldn’t like to be seen to be recommending remuneration for themselves. Having said that, if you want to encourage people to spend this sort of time on it then perhaps there should be remuneration. Our annual survey suggests that our members typically spend 20 to 25 days a year on this so that’s about two days a month. That is the level of commitment that would be expected from, say, a non-executive director in an NHS Trust.
