References to MNTs in this section also apply to Member
Nominated Directors (MNDs).
A member nominated trustee (MNT) is a trustee that has been
voted into position by some or all of the scheme's members.
The original rules were introduced on 6 April 1997 to give members
a say in the selection and appointment of trustees. Those
rules were amended with effect from 6 April 2006.
Under the original rules, the employer had to choose whether to
opt-out and make arrangements not to have MNTs, or ask the trustees
to make arrangements for MNTs to be appointed. However, the
opt-out option was withdrawn when the new rules were introduced on
6 April 2006.
If the employer had previously decided to opt-out, the trustees
had until 31 October 2007 to implement the new changes. If
the second option had been chosen, the trustees will have had to
put the new rules into place with effect from 6 April 2006.
Minimum Number
The new rules state that at least one-third of the trustees
should be MNTs. If there are 10 trustees, this means that at
least four of them must be MNTs. Some schemes may have
special provisions that require more that one-third to be member
nominated.
The trustees must make arrangements for the selection of MNTs
within six months of the 'effective date'. The effective date
is 6 April 2006 for existing schemes without an opt-out, 31 October
2007 for existing schemes with an opt-out and the inception date
for all new schemes.
Appointment Process
There are a couple of stages to the MNT appointment process.
Firstly, the trustees must ask, at least, the active and
pensioner members for nominations. A member can nominate any
other scheme member they believe would be fit to act as a trustee
of the scheme. The nominated person must give their
consent.
Then, the trustees must put in place a selection process.
Either, a selection committee decides or, if a ballot is arranged,
details of the nominated persons are put to all the eligible scheme
members. The members are asked to vote for whom they believe
are fit to act as trustees. Those with the highest number of
votes are thereby elected as MNTs.
If there are fewer nominations than vacancies, the trustees must
choose whether to bypass the selection process and just appoint
those nominated. If there are unfilled vacancies, the
trustees must make arrangements for a new nomination process to be
carried out no later than three years after the failed process.
Reviewing
The MNT appointment process, once completed, must be reviewed by
the trustees every three to five years.
Q & A's
The trustees must make arrangements for the selection of MNTs
within six months of the 'effective date'. The effective date is 6
April 2006 for existing schemes without an opt-out, 31 October 2007
for existing schemes with an opt-out and the inception date for new
schemes.
The removal of an MNT can only be carried out with the approval
of all other trustees.
No. MNTs will have the same responsibilities of all other
trustees.
Where a company is a trustee, then the requirement to have
one-third MNTs becomes a requirement to have one-third member
nominated director (MNDs). The provisions applying to MNTs are the
same for MNDs.
