A seemingly growing number of schemes seek input from their membership through routes other than as member-nominated trustees. What is driving this, and how does it work in practice? 

 

Member panels are becoming a feature of more pension schemes, whether defined contribution or defined benefit. Master trust Nest has a relatively large member panel, having no MNTs, for example. 

 

The scheme of Invensys, the engineering and IT company that is now part of Schneider Electric, appointed two new member-nominated trustees a year ago, having had a choice of no less than 80 applicants, but also set up a member panel in early 2023. 

 

Invensys said it is looking to build on the success of its member panel “by including a more diverse range of views, skills and suggestions”. Panel members “can have a say in how we develop tools and communication material, learn and develop new skills and meet fellow members”. They meet at least once per year via video call, with the option to join by phone, for about 90 minutes. 

 

Groups through which members provide input are becoming a feature particularly where schemes move to sole trustees, says Kim Nash, managing director of trustee firm Zedra Governance, who sits on several schemes with member committees or forums. 

 

“We share information with them, and they give us input on what they are seeing and hearing from members,” she explains.  

 

Panel members are also asked to feed back on member communications, such as the website and newsletter, and to provide views on what is of interest to members. Where there is corporate change underway, the focus might be put on that, including how frequently members should be updated. 

 

Regarding the communications aspect, “we try to take on board as much as we can do”, says Nash, while still recognising that the responsibility ultimately sits with the trustees. 

 

The fact that the member panel does not carry legal responsibility is another reason why schemes are setting them up. While both member panels and MNTs are volunteer positions, the latter often have liability in their own name. 

 

Instead, a panel offers “a nice way of being able to input without formal responsibility” or training requirements, finds Nash. 

 

A member panel is something that is generally quite valuable, she says, and separating member participation from the trustee responsibilities also helps to attract applicants for the positions. 

 

This can, however, be short-lived. Nash says while interest in panel positions tends to be high at first, it ebbs away as members get used to having the panel and the member population ages. 

 

How a panel is constituted is therefore not always a question that has to be answered, as the number of positions might not exceed applicants. Where there were more candidates, the trustees conducted an interview process on one of her schemes, Nash says. 

 

Another of her schemes has just a single member representative, she adds, who acts as a liaison between the trustees and members. 

 

“If they have concerns or questions they go to him,” she says, and the trustees get quarterly updates. “It works nicely,” she says, but admits it can only be done where the membership is small. 

 

Member panels tend to focus on communications. Some do provide input on investment options but to a lesser extent. Similarly, retirement options are also discussed less commonly than communication matters, but it does happen. 

 

“For one client we’ve been through a retirement pack with a subset of members,” says Nash, which was on a project basis. 

 

 

While Invensys has decided to have a member panel and MNTs, many schemes do not have both, notes Maggie Rodger, co-chair of the Association of Member Nominated Trustees. Where members have full trustee status, their voice is heard in the whole running of the scheme, she points out. 

 

“My instinct is that panels get treated a little more like focus groups - given specific questions or areas of governance to discuss rather than a full oversight of the scheme,” she says. “So, while they offer some reassurance to members that their voice is heard, it is more partial than having board membership.” 

 

Still, she adds, “that is better than nothing”. 

 

 

One scheme that is required by statute to have member and employer panels is Nest. Perhaps it is their statutory nature, that they have been established for 13 years, or the fact that employers are represented in the same form, which means this member panel is feeding into more than just comms. 

 

A spokesperson says that the scheme has found it “an extremely useful way to engage with our customers and ensure their perspectives are fed into some of our key activities, e.g. it plays a critical role in the review and development of Nest’s statement of investment principles”. 

 

Nest carries the cost of running the two groups. The panels, of between nine and 15 people, meet quarterly and provide feedback to the trustee via these meetings and other reporting lines and initiatives, according to the spokesperson. For example, the member panel produces an independent annual view on the extent to which the trustee has taken into account the views of scheme members and the panel when making decisions about the operation, development and amendment of the scheme. 

 

 

Some schemes have established member liaison meetings, such as the BBC Pension Scheme, which had its first such meeting in November last year and will hold another one next month. At the upcoming online meeting, members will hear updates from the chair of the board, chief executive and director of pension investments and can submit questions in advance. 

 

“Members told us that being able to attend online helped them feel connected, and the presentations were clear, informative and reassuring,” the scheme said on its website. 

 

Similarly, the IBM Pension Scheme has held two Q&A sessions with the chair of the trustees. 

 

“From a trustee perspective, you really want your members to be confident about the scheme they are saving in,” says Nash, and having direct access to the trustees can give comfort to them that the scheme is being looked after. 

 

“Trust is quite important, and generally, people have a negative view of pensions,” she notes. 

 

On the whole, it is important that members have “a really good experience”, particularly as they do not have much contact with the scheme, and most of this happens through the administrators. A good experience and making it easy for them to feed back creates confidence, she adds. 

 

“Feedback has been valuable from my committees,” she says. 

 

However, it is important that there is a process, she stresses: “Make sure they add value, as people are giving up their time.”. 

 

Equally, the trustees should get value from such member groups – so trustee boards might want to “reflect on what is working and what is not".