As the BBC scheme conducts its latest election for a member-nominated trustee, Wayne Grady looks at how the process reduces administration risk by making clear to candidates their accountability in office before allowing them to stand
Six employees are standing for the latest election for a member-nominated trustee (MNT) to the BBC Pension Scheme, which puts in a series of safeguards to manage the risk of an unsuitable candidate.
The scheme conducts email and online campaigns to pool candidates, followed by a briefing of those wanting to stand to make sure they understand the responsibilities of the role.
Member organisations have called on other schemes to emphasise the demands of the appointment on candidates, and where necessary bring in a union or outside organisation to help with the process of recruitment.
All active members of the BBC scheme are able to put themselves forward to be a member-nominated trustee. Once a vacancy arises, the scheme goes out of its way to "ensure the best people put themselves forward", said a spokesperson. Email and website notices publicise the vacancy to scheme members. If more than one person puts themselves forward then an election is organised by the Electoral Reform Services. The spokesperson added: "Anyone who is interested has to attend a briefing session with the scheme solicitor and scheme secretary." During this half-day session, the role and the duties are explained. Nominations are called only from people who attend this briefing.
Ensuring the most able and committed candidate ultimately reduces the risk of poor governance to members' retirement income.
Employee representation
The scheme is holding an election despite exceeding the required number of MNTs.
The regulations say at least one-third of the scheme's trustee board should be nominated by members.
"The board consists of four trustees appointed by the BBC – generally senior managers – three elected by active members, one elected by pensioners and a chair appointed by the BBC trust," said a scheme spokesperson. "This leads to a good pool of skills and experience."
The process (see box right) includes a compulsory briefing by the scheme solicitor and secretary to set out the demands of the role.
The BBC’s briefing session attendance criteria, first set out in its 2011 annual report, safeguards against any onerous surprises for a newly-installed MNT.
This briefing has discouraged those unable to make the time commitment, out of the abundance of candidates available to the broadcaster scheme.
"People are put off by the subject matter and the time commitment needed," said the scheme spokesperson.
Choosing the best approach
While the BBC has opted for this compulsory briefing, any criteria for becoming an MNT are entirely down to the scheme in question, said Barry Parr, co-chair of the Association of Member Nominated Trustees.
"Some have a validating-interview-type process, which might be a committee, it might be a chairman and one or more trustees," he said.
People are put off by the subject matter and the time commitment needed
"Others are entirely open. Anybody who wants to stand can." From his experience, Parr said roughly 60% of MNTs are appointed via election, with the other 40% appointed by people identifying themselves to a selection panel. Parr added: "In some companies, there may be an agreement with a union that the union will manage the process or nominate an MNT."
Challenges for smaller schemes
For smaller organisations, finding suitable MNT candidates can become problematic.
Peter Askins, a trustee director at Independent Trustee Services (ITS), said such vacancies remain unfilled for some time in certain instances because there is no one willing to take on the responsibility.
"They’re in small and medium-sized businesses," said Askins. "The workforce, the nature of the job may not lend itself to people who are computer and financially literate."
Another option is to bring in a professional trustee firm such as ITS, at a price, to take over the trustee responsibilities.
Askins pointed to the regulatory requirement that all new trustees must complete the regulator’s Trustee Toolkit.
This is an online training package that takes a minimum of 30-35 hours to complete, assuming the right marks are achieved and the work does not have to be repeated. Repeated failure to complete training would lead to a trustee being asked to leave.
Parr put the lack of candidates in smaller schemes down to poor communication of the role.
"It is said that there is a difficulty in recruiting MNTs," he said. "All the indications suggest that is only really true in smaller companies and probably where there is not in place a professional to best express what the role has got to cover."
