The Pensions Regulator

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

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Compliance with the requirements

28. Trustees must put arrangements in place within a reasonable period of the commencement date and implement those arrangements²⁰.

Principles-based approach

29. Trustees must comply with the requirements of the legislation. This code does not specify how trustees should do so. Instead the code identifies three principles which trustees should follow in deciding the arrangements for their scheme. The principles indicate the standard of conduct and practice expected by the regulator.
30. The principles for how trustees should decide on their arrangements are:
    • proportionality;
    • fairness; and
    • transparency.
31. Proportionality means that trustees should select an approach the costs and nature of which are appropriate to the circumstances of their scheme. For example, in respect of the arrangements there are different methods of communicating with members about the nomination process. Paragraph 80 suggests a staff noticeboard as a means of communication for a small scheme with only active members on one site. Such an approach is proportionate for that scheme. Proportionate in this context does not refer to proportions of members.
32. The trustees should ensure that the arrangements treat all of the members fairly. Treating members fairly does not however mean that all classes of member have to be treated the same.
33. An example of transparency is at paragraph 79 which states that the outcomes of the nomination and selection processes, and the method of selection, should be communicated to all the members involved in both processes.

Putting arrangements in place

34. Putting arrangements in place means considering, designing and building arrangements which are capable of being implemented. These include the trustees:
    • deciding which requirements apply to their scheme;
    • determining the number of MNT vacancies;
    • considering whether any current arrangements are still appropriate or whether new ones are needed;
    • allocating responsibilities under the arrangements; and
    • putting systems in place to implement the arrangements (for example, to obtain necessary documentation and to check membership details).

Delegation and arrangements that are 'off the shelf'

35. Trustees may delegate some of their duties to a third party.
36. Trustees cannot however delegate responsibility for compliance. Trustees who decide to delegate any of their duties under the arrangements should satisfy themselves that those administering or operating the arrangements on their behalf are familiar with them and capable of carrying them out. Trustees should also have systems in place to tell them about any delay to completion of delegated matters.
37. Trustees may also utilise "off the shelf" arrangements obtained from a third party. If they do so, they should ensure that these are appropriate for the scheme having regard to the principles of proportionality, fairness and transparency.

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