The Pensions Regulator

Member-nominated trustees and member-nominated directors

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Schemes that had arrangements in place under the Pensions Act 1995

Under the Pensions Act 2004, trustees are required to ensure that arrangements are in place, and implemented, that provide for at least one-third of trustees or at least one-third of directors of the trustee company to be member-nominated.

However, the Pensions Act 1995 first introduced the requirement for member-nominated trustees (MNTs) and member-nominated directors (MNDs).

Under the requirements of the Pensions Act 1995, the employer could 'opt-out' of the requirements and propose their own arrangements for choosing trustees, provided they obtain the members' approval of the arrangements. This is commonly known as an 'opt-out'.

If the employer chose not to put an opt-out in place, the trustees had to make the arrangements for choosing MNTs or MNDs either by following rules set out in law or by adapting these rules (in which case the trustees had to obtain members' approval of the rules).

There are provisions in place to manage the change from one legislative framework to another. These vary depending upon whether an opt-out was in place or whether the scheme had MNTs or MNDs appointed under the Pensions Act 1995.

Trustees will need to review the arrangements they had in place on 5 April 2006 and identify whether an opt-out was in place or not. Trustees of schemes exempt from the Pensions Act 1995 requirements should check that the scheme remains exempt under the new requirements or whether a new exemption applies.

Opt-out in place on 5 April 2006 tells you more about the changes for schemes which had an opt-out in place.

MNTs or MNDs appointed under the Pensions Act 1995 in place on 5 April 2006 tells you more about the changes for schemes which did not opt-out.

More information on the exemptions from the requirements can be found at Do the MNT and MND requirements apply?

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