Pension scheme members should be given greater representation on the boards of master trusts as they evolve into so-called ‘megafunds’, according to the Trades Union Congress (TUC).
The organisation made the call in a new report, launched at its annual pensions conference taking place today. It argued that the consolidation of pension funds, in particular in the defined contribution (DC) sector, had diluted the member voice at the top of governance structures.
The call comes as the Department for Work and Pensions (DWP) is consulting on trusteeship standards, in a process that closes tomorrow (6 March).
The TUC urged ministers to “ensure that members have a voice on trustee boards, regardless of the type of pension scheme their employer chooses for them”.
General secretary Paul Nowak said: “Pension schemes deliver better outcomes for members – and ultimately a better quality of life in retirement – when those members have a say in how they are run.
“As the government looks to move to a system of fewer, bigger pension schemes, ministers should look to Australia and Canada to see how member representation can help to ensure those bigger schemes deliver better results.
“All workers deserve to retire in dignity. It is vital that pensions are governed fairly.”
In response to the DWP’s consultation, the Association of Member-Nominated Trustees (AMNT) made a similar call for representation in consolidated schemes.
Maggie Rodger and John Flynn, co-chairs of the AMNT, said in a statement: “Member representation across the board, in mastertrusts and megafunds, especially in DC and collective DC schemes, where members are the only significant risk holder, should be mandatory.”
The TUC’s report said member-nominated trustees helped to “strengthen accountability, decision quality, engagement and diversity” on pension scheme boards, as well as “reassure workers that their pensions are being looked after”.
The report called for minimum requirements for member representation to be set at a third of trustee boards, and for minimum standards of support and training. It also recommended that governance structures should “recognise the diversity of members in multi-employer schemes”.
