The Pensions Regulator

Member-nominated trustees and directors code published

Ref: PN06-13
6 April 2006

The Pensions Regulator's final draft code of practice Member-nominated trustees and directors - putting arrangements in place has been published on the regulator's website to coincide with the legislation coming into force today.

This will give trustees and other interested parties the opportunity to familiarise themselves with the intended code of practice.

This final draft code has been submitted for Ministerial approval, prior to being laid before Parliament. It will provide trustees with practical guidance on how to comply with legislation regarding the appointment of member-nominated trustees and member-nominated directors.

Trustees are required to ensure that arrangements are in place, and implemented, for at least one third of trustees to be member-nominated; or at least one third of directors of the trustee company to be member-nominated. The arrangements must include a nomination process and selection process, and comply with other statutory requirements.

The code of practice is available on the regulator's website:
www.thepensionsregulator.gov.uk/codesOfPractice/index.aspx

Guidance will be published shortly covering timings and transitional issues.

In the next few months, six new codes of practice will be issued by the Pensions Regulator. Codes cannot be issued until associated regulations have been made and parliamentary procedures have been followed. The regulator expects the following timetable to apply.

Trustees of occupational schemes and their advisers should note that they must comply with regulations that come into force on 6 April 2006, even where associated codes of practice are to be issued at a later date.

Code of practice	Planned date of issue of code (after 40-day laying period)	Date associated legislation comes into force
Early leavers - reasonable periods	End May 2006 (laid 14/03/06)	6 April 2006
Reporting late payment of contributions to occupational money purchase schemes	Mid May 2006 (laid 02/03/06)	Already in force (changes apply from 6 April 2006)
Reporting late payment of contributions to personal pension schemes	Mid May 2006 (laid 02/03/06)	6 April 2006 (changes apply from 6 April 2006)
Trustee knowledge and understanding (TKU)	Mid June 2006 (laid 23/03/06)	6 April 2006
Member-nominated trustees and directors - putting in place arrangements	End June 2006 (not yet laid)	6 April 2006
Modification of subsisting rights	End July 2006 (not yet laid)	Regulations 6 & 7 30 March 2006 Remainder 6 April 2006

Editor's notes

1. Under the Pensions Act 2004, trustees are required to ensure that arrangements are in place, and implemented, for at least one third of trustees to be member-nominated; or at least one third of directors of the trustee company to be member-nominated. The Department for Work and Pensions regulations came into force on 6 April 2006.
2. Once the code has been approved by the Minister of State for Pensions Reform, on behalf of the Secretary of State for Work and Pensions it will be laid before Parliament. There will be a period of 40 days at the end of which, if no representations are made, the code will be brought into force. Although the code may not be the final version it does contain the Pensions Regulator's expectations. Therefore, trustees and employers can be confident they can start to act in accordance with the guidance contained in the code.
3. Regulations referred to in this press release can be found at http://www.opsi.gov.uk/.
4. Codes of practice are not statements of the law. However, they do have evidential value, meaning they will be taken into account by a court or tribunal where relevant.
5. The Pensions Regulator is the regulator of work-based pensions in the UK, with wide ranging and flexible powers under the Pensions Act 2004.
6. The powers of the Pensions Regulator include the ability to:
   • collect more detailed scheme information;
   • issue improvement notices and third party notices, enabling the regulator to ensure problems are put right;
   • freeze a scheme that is at risk, while the regulator investigates; and
   • prohibit trustees who are judged not fit and proper to carry out their duties.
   • The Pensions Act 2004 also imposes a statutory obligation on 'whistleblowers' to report suspected breaches of the legislation to the regulator.