The requirements for trustees to ensure that arrangements are in place, and implemented, that provide for at least one-third of trustees or at least one-third of directors of the trustee company to be member-nominated, start to apply from what is known as the ‘commencement date’.
The commencement date varies depending upon the circumstances of the scheme:
- If an opt-out was in place on 5 April 2006, the commencement date is the earliest of:
- the date members’ approval of the opt-out ends ;
- the date the trustees or employer bring the opt-out to an end ; or
- 31 October 2007.
For many occupational pension schemes therefore the commencement date is 31 October 2007.
From the commencement date, trustees must put their arrangements in place within a reasonable period if the scheme is not exempt.
The Pensions Regulator has indicated in its Code of Practice .
The Regulator considers that:
• a reasonable period within which arrangements should be put in place is six months;
• a reasonable period for the nomination and selection process to take place under the arrangements is six months from any requirement arising
In the run up to the impending deadline many employers are taking advantage of an exemption from the requirement to appoint member nominated trustees by appointing a sole independent professional trustee, effectively outsourcing all aspects of trusteeship including compliance with the onerous Trustee Knowledge and Understanding requirements.
Guidance on the requirements has been provided by the Pensions Regulator.
For further information please contact Brian Spence on tel 028 9041 2000
Issued on behalf of Spence & Partners by Blueprint Media tel 0141 353 1515
Date: Oct 2007