The Pensions Regulator

Code of practice 08
MNT/MND - putting arrangements in place

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The selection process

67. The arrangements must provide for a selection process if:
    • there are more nominations than vacancies; or
    • the trustees decide to have one, even in the event there are fewer nominations than vacancies.
68. The arrangements should also provide for MNTs who are selected, or deemed to be selected, to be appointed.

Who can be selected as an MNT?

69. Scheme members can be selected as can non-members in certain circumstances.

Selection of a non-member

70. Where the employer requires it, a non-member must have the employer's approval to qualify for selection⁴². When designing the arrangements if trustees desire non-members to be eligible, they should, therefore, discuss with the employer whether it will require any non-members to be approved by them. If so this should be reflected in the arrangements as a criterion for eligibility for both nomination and selection.

Whom to involve in the selection process

71. The arrangements should specify who will be involved in the selection process. It must involve at least some or all of the members⁴³. It may also involve representative organisations.
72. If selection is by a panel or group, trustees must ensure that these include some scheme members.
73. Trustees should also have regard to the principles of proportionality, fairness and transparency in considering who to involve in the selection process.

Methods of selection

74. The method of selection chosen may vary according to the circumstances of the scheme. The method is also likely to be affected by the number of scheme members trustees choose to involve in selection.
75. The arrangements should provide for a combination of methods to be used if this is more effective. For example, where a scheme has based its nomination process around constituencies it may be appropriate to have different selection methods for each constituency such as a member committee per site for active members and a ballot for pensioner members.

Examples of selection methods

76. These include:
    • a ballot;
    • selection panels;
    • selection by member representative committees;
    • selection by pension management committees;
    • selection by trade unions; and
    • selection by existing trustees.

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