However, this form of governance was severely tested in the 1990s following the disappearance of Robert Maxwell from his yacht on 5th November 1991. It was quickly uncovered that the pension funds of many of the Mirror Group Pensioners had also disappeared, having been used by Maxwell to prop up his failing publishing empire. The oversight of the various Mirror group pensions had been led by people who were in Maxwell’s control and had failed to challenge the actions of a bullying, dominant character. Fortunately, after years of hard work, the funds were recovered for pensioners. One outcome of this criminal activity and glaring lack of oversight from a company controlled trustee board, was the Pensions Act of 1995. This created the requirement for pension trustees boards to include equal numbers of member and employer trustees. The board could be supplemented by independents, but it was designed to give equal voices to the pension stakeholders and prevent similar situations occurring.

Fast forwarding to today we have a complicated and continually changing regulatory structure and multiple models of pensions’ governance, from the traditional 1995 model, through multi-employer schemes, master trusts, and the growth of sole trusteeship. And we find that the future of trusteeship is under discussion again. While we now have the PPF to protect the members of failing schemes, and TPR to be a robust system of oversight, we still face the questions of how to protect those to whom the pension assets belong and to generate the returns they require to provide a decent pension. The DWP consultation document references an OECD study which found governance improvements could be made through higher levels of training for trustees, codes of conduct addressing conflicts of interest, and more balanced representation of stakeholders in the governing body. So, over 30 years later, we are back to the 1995 Act! The introduction of member trustees brought an insight into wider member views as well as governance balance. MNTs have given confidence to members that their scheme is being run in their interests. This was demonstrated recently when the Royal Mail member trustees were instrumental in helping their members understand and accept CDC. However, the closure of traditional DB schemes, the move to PCST governance and the rise of large schemes run without a member voice means that this governance balance is decreasing. The AMNT believes that this is a retrograde step.

As we look forward we see increasing conflicts; between the desire of some employers to be rid of the burden of their schemes; increasing commercial conflicts as we move towards larger schemes; the difficulty of managing inherent conflicts of PCST; discussions about the right ownership of surplus; and even a government that is considering mandating some scheme investments. Alongside this is concern that scheme members are not receiving fair value from their funds or having their voices and varying needs heard in governance. New pension models, such as CDC, will rely for their success on good governance to ensure generational fairness in the design, annual valuation and balancing decisions. Value for money proposals in DC stop short at the non- numerical concepts of stewardship and service quality. Since these DC models place all the risk on members, either individually, or shared, surely they should be involved in governance of these issues? There are some who have seen MNTs as equivalent to amateur (compared to “professional”)trustees. That is faulty thinking. Member trustees bring one thing that cannot be acquired either by learning, or by experience. They are involved stakeholders. They have “skin in the game”. The role of trustee is demanding but there are ways to enhance learning. Within increasingly large schemes, there will already be members with significant transferable skills who should be encouraged to take up such a role. There are plenty of member trustees who have completed the accreditation qualification, (the same qualification under discussion as to whether it should be mandatory for professional trustees). There are even more member trustees who have enquired about becoming accredited but have been refused time or funding by their employer. That is an area that should be addressed. As the pensions world becomes more complicated all pension trustees, including MNTs, will need to be better trained. But the function of member nominated trustees, acting as stakeholders on behalf of all members is crucial to ensuring a balance of governance and is needed now as much as ever. “Those who cannot remember the past are condemned to repeat it”. Remember remember…….