The Pensions Regulator

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

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The nomination process

49. The nomination process identifies candidates for selection as MNTs. At least the active and pensioner members or organisations that adequately represent them must be eligible to participate³⁴. Pensioner members do not include anyone in receipt of survivors' benefits³⁵.

Who can be nominated as an MNT?

50. Any scheme member may be nominated; the arrangements should, however, ensure those nominated consent to being MNTs if selected or deemed to be selected.
51. Trustees may wish to consider eligibility criteria for prospective nominees. Any criteria should be considered with regard to the principles of proportionality, fairness and transparency.
52. Nomination and selection of non-members is considered at paragraph 70.
53. There are legislative provisions as to who cannot be appointed as a trustee and trustees should have regard to these when considering eligibility. Examples are:
    • anyone aged under 18³⁶;
    • undischarged bankrupts;
    • anyone either disqualified from being a director or convicted of an offence involving dishonesty or deception³⁷.

Whom to involve in the nomination process

54. When designing the arrangements the trustees should consider and decide who to involve in the nomination process. The process may comprise combinations of individuals and organisations. For example, a nomination process could involve the active members as individuals as well as an organisation which represents them and an organisation which represents the pensioner members.
55. Trustees may choose to include others, such as pension credit members and deferred members, in the nomination process. When making this decision the trustees should have regard to the principles of proportionality, fairness and transparency.

Schemes with no active or pensioner members

56. The requirements are modified and in such cases the arrangements must include a nomination process in which at least such deferred members as the trustees determine are eligible to participate³⁸.

Involving organisations

57. When considering whether an organisation adequately represents active or pensioner members (or both) the trustees should take into account the following factors:
    • whether the organisation has representation as one of its purposes;
    • whom the organisation represents and the proportion of the active or pensioner members which it covers;
    • whether the organisation has any limitations on membership;
    • the relationship of the organisation with the employer (i.e. how independent the organisation is of the employer);
    • whether individual members will also be involved in the nomination process, or representative organisations alone; and
    • whether the organisation is the only organisation that the trustees intend to involve.

Using only representative organisations

58. Trustees should recognise that due to the different priorities of the active and pensioner members it is unlikely that the trustees will find a single organisation which adequately represents both classes of member.
59. If trustees decide to use only representative organisations in the nomination process, they should consider notifying the members of their decision and their reasons.

Examples of representative organisations

60. These could be:
    • recognised trade unions;
    • staff committees;
    • member representative committees;
    • pension management committees; and
    • pensioner organisations.

Using 'constituencies'

61. Trustees may decide to use constituencies in the nomination process (for example, by site, by category of member, or by section of the scheme). In considering the use of constituencies, trustees should have regard to the principles of proportionality, fairness and transparency³⁹. For example it would not, in general, be fair for a constituency of 100 members to nominate two MNTs, and a constituency of 10,000 members to nominate only one.

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