House of Commons select committees gave The Pensions Regulator a hostile verdict in their report on Carillion.

They said that TPR needs to become more proactive. This would require substantial cultural change in an organisation where a tentative approach is ingrained. We in the Association of Member Nominated Trustees (AMNT) urge TPR to apply this cultural change to their 21st Century Trusteeship initiative. It is important to nurture and encourage good trustees. That role needs an enthusiastic approach.

The AMNT sees the role of member nominated trustees as crucial in ensuring a well run pension scheme. We see pension scheme governance as a triangle. The three sides of the triangle are these. First, there is the sponsoring employer, who contributes financially. Then there are the professional advisers and managers, who provide services, for which they receive remuneration. Thirdly, and importantly, there are the scheme members, who make their contributions in order to secure their entitlement to their deferred pay. The member nominated trustees (MNTs) represent them. The three sides of the triangle must be kept in balance.

The parliamentary select committee noted what happens when the balance is upset. They probed the BHS pensions scandal. Their verdict then was: “This inquiry has exposed how capitalism can be worked to the advantage of directors, financiers and advisers at the expense of employees and the wider public.”

TPR has flagged up that the purpose of their 21st Century Trustee initiative is to tackle poor standards of stewardship and risk around sub scale schemes. They say that the majority of members are in schemes that are run relatively well, but there are some significant gaps. Many of these involve small and medium sized schemes. Standards are not being met in a number of areas, including governance, administration, investment and value for members.

TPR’s corporate plan 2018-21 has as the second of its eight priorities: “Promoting good trusteeship through improving governance and administration”. TPR has a total budget of £88m a year, with a staff moving up to 660 in number.

We in the AMNT say explore contracting out some of the work of promotion to us. Precedents exist for regulators to involve representative trade bodies in tasks like this. Trustees are vital drivers in the development of solutions. Involve us more positively in setting up the action. We see a four point plan that policy makers and regulators can bring forward in order to support MNTs, and thereby raise governance standards.

First, there is training. Recognise formally the role of the AMNT in encouraging training. We are right behind the “Professional Trustee Standards Working Group” in their schedule that should be met of “standards for all professional trustees”. We nurture our members to deliver on these standards.

Second, there is a need for outreach work. TPR says that some of the trustee boards that perform poorly do not recognise their own deficiencies. We have a track record in guiding trustees towards good practice. Regulators should motivate as well as monitor. The AMNT is a good conduit by which to do this.

Thirdly, there is a case for talent broking. AMNT members offer commitment, knowledge and commitment. Failing schemes have need of these attributes. A positive approach could bring the two sides together, to the profit of both.

Fourth, there is the question of remuneration. Most lay trustees are not remunerated. Some do not want to be. Many, however, look at the increasing amount of time that they need to spend to keep abreast of new controls and regulations. It could be appropriate to recommend the option of remuneration. The model for the right amount might be based around that for a non executive director on a local NHS trust: say around £5k a year.

We hope very much to work with the Pensions Management Institute to promote these initiatives. We urge TPR to give enthusiastic support in line with the select committees’ recommendations.

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