MNT & MND Election Services

What are Member Nominated Trustees and Member Nominated Directors?

The original rules governing Member Nominated Trustees (MNTs) and Member Nominated Directors (MNDs) of pension schemes were introduced on 6 April 1997 and then amended with effect from 6 April 2006.

The legislation states that a MNT is a trustee who ?is nominated as a result of a process which must involve at least a) all the active members of the scheme or an organisation that adequately represents them; and b) all the pensioner members of the scheme or an organisation that adequately represents them; and c) is selected by some or all of the members of the scheme." (www.thepensionsregulator.gov.uk)

MNDs occupy a similar position to MNTs in pension schemes that are organised as companies rather than trusts.

Changes in legislation that took effect on 31st October 2007:

Under the original 1997 rules, employers were given the option to opt-out from having Member Nominates Trustees or Directors and entitled to set up alternative arrangements. The opt-out option was however subsequently withdrawn as the new rules were introduced in April 2006. An employer who had previously decided to opt-out was given until 31 October 2007 to implement the new changes. The MNT arrangements set up must then be reviewed by the trustees every three to five years.

As from 31 October 2007, at least one third of trustees have to be member nominated for all UK occupational pension schemes. This means that out of 10 trustees, at least four of them must be member nominated. The Government has indicated that this might be increased to 50%.

How are MNTs and MNDs appointed?

The appointment process involves a two-stage process; nomination and selection.

Nomination process:

An invitation is communicated to at least all active and pensioner members detailing the arrangements of the nomination process. The nomination form can either be included in the communication or obtained by members on request. The method of communication can vary according to the circumstances of the scheme. Whichever despatch method is selected, the reasons why the communication has been issued should be clearly set out. This includes the number of MNTs and MNDs required; the number of MNT and MND vacancies; responsibilities incumbent on this position; a short explanation of the role of a trustee and any available training; any eligibility criteria; what will happen if the number of nominations is less than or equal to the number of vacancies; details of the selection process; how to nominate someone for selection as an MNT or MND; any time limits that apply; and a contact for queries.

If the number of nominees is less or matches the number of vacancies, those candidates tend to be declared elected unopposed (subject to eligibility).

Selection Stage:

The legislation does not prescribe a single selection method that must be used. Instead it outlines in a code of practice the general principles that must be met. These are proportionality, fairness, and transparency. The code then goes onto suggest selection methods that meet these principles - and, not surprisingly, top of the list is selection by ballot. (See: www.thepensionsregulator.gov.uk/codesOfPractice/mnt/mnt-09.aspx#methods)

The main advantage of selecting by ballot is that by letting the members elect their own representative(s) in a free and fair election, the scheme?s management should be protected from any possible charge of unfairness. A ballot should also be an exemplary process in terms of proportionality and transparency ? but this can need careful management.

For a ballot to take place, details of the candidates and instructions on how to vote are put together to form the election materials and these are communicated to all members eligible to vote. Elections can be conducted using post, internet and telephone voting, all depending on the circumstances of the scheme. Whichever voting media are selected, the communication should include clear voting instructions; the outcome of the nomination process; and the method of election - usually Single Transferable Vote (STV) or First Past the Post (?x? ballot).

The outcomes of the nomination and election processes should then be communicated to all of the members involved in both processes. Again, the method of communication can vary according to the circumstances of the scheme. The whole process should, according to the regulators, not take more than six months although in practice, and with expert help, timeframes can be considerably shorter than this.

Where to find expert help?

Electoral Reform Services has administered more MNT and MND elections than any other balloting organisation. This knowledge is passed onto our clients in the form of expert guidance. Our Project Managers can also take care of the entire electoral process (nomination and selection), safeguarding the scheme from any possible slip ups in practice or procedure.

There are no minimum or maximum limits to the size of scheme that ERS can help: trusts with less than fifty voting members can benefit from using our unique in-house facilities, but so can trusts with tens of thousands of members.

ERS can support voting by post, internet, telephone, text, or any combination of these methods, so print and postage costs can be reduced. Our expertise, specialist technology and full control over the whole process, mean that we can complete the whole process in a fraction of the time required by schemes that try to administer the election themselves.

We also work closely with all the top pension consultants and administrators including:

• Mercer
• Watson Wyatt
• AON
• Hewitt
• Hymans Robertson

How much does it cost?

Electoral Reform Services is the balloting arm of the Electoral Reform Society, a not-for-profit organisation. Although we charge for our services, our fees are considerably less than those normally associated with professional services companies.

As circumstances differ for every scheme, we can not offer a single fixed price for MNT and MND elections but we will produce a quote on demand for any bona fide pension scheme or its advisers that contacts us. For details, please see our contact page.