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Codes of practice

Code of practice 08
MNT/MND - putting arrangements in place

To whom does this code apply?

  1. This code applies to trustees (corporate and individual) who must comply with the requirements8.
  2. Employers and advisers to trustees may also find this code useful. Employers in particular should note they no longer have the option of proposing alternative arrangements to the requirements ('opt-outs')9.

Terms used in this code

  1. In this code legislative requirements are indicated by 'must' and code guidelines by 'should'.
  2. In this code (and its footnotes) unless stated otherwise all references to:
    • 'member-nominated trustees' (MNTs) should be taken to include 'member-nominated directors' (MNDs);
    • 'regulations' are to the Occupational Pensions Schemes (Member-nominated Trustees and Directors) Regulations 2006 (SI 2006/714);
    • 'requirements' are to the requirements for trustees to put in place and implement arrangements to provide that at least one-third of the trustees are member-nominated trustees;
    • 'schemes' are to occupational pension schemes established under trust10;
    • 'sections' are to those from the Pensions Act 2004; and
    • 'trustees' are to the trustees of an occupational pension scheme established under trust.

Changes to the legislation and the code

  1. This code covers the requirements that started to apply from 6 April 2006. These requirements may be amended to require that at least one-half of the trustees are member-nominated trustees11. If so then references to one-third should be read as one-half.

The legislation and code at a glance

Requirements

  • Trustees must ensure that:
    • within a reasonable period arrangements are in place to provide for at least one-third of the trustees to be member-nominated trustees; and
    • those arrangements are implemented.

Trustees should comply with the requirements in accordance with the principles of proportionality, fairness and transparency.

Arrangements

  • The arrangements must:
    • include a nomination process;
    • include a selection process; and
    • comply with other statutory requirements.

Reasonable periods and reasonable intervals

The regulator considers that:

  • a reasonable period within which arrangements should be put in place is six months;
  • a reasonable period for the nomination and selection process to take place under the arrangements is six months from any requirement arising;
  • a reasonable interval for re-running a nomination process due to an unfilled vacancy because of insufficient nominations is no more than three years.

8 See sections 241 to 243 and the Occupational Pensions Schemes (Member-nominated Trustees and Directors) Regulations 2006 (SI 2006/714)
9 See sections 17(1) and 19(1) of the Pensions Act 1995
10 See section 243(3)
11See section 243(1)


Related documents
MNT/MND (PDF)
Related pages
Codes-related guidance: Member-nominated trustees and member-nominated directors