You may remember The Pensions Act 1995 introduced the requirement for company pension schemes to have Member Nominated Trustees (MNTs). Trustees had to ensure that at least 1/3^rd of trustees were member-nominated.

Employers could opt out of the MNT requirements by putting in place "alternative arrangements", however this is no longer possible as a result of the Pensions Act 2004. Schemes must have new procedures in place by the commencement date.

This date varies depending on the scheme’s circumstances.

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.

If your scheme has an opt-out in place, you will now have to start putting arrangements in place so you have at least 1/3^rd of trustees member-nominated.

The Pensions Regulator has published a code of practice entitled Member-nominated trustees and directors – putting in place and implementing arrangements. This code gives you all the information required to get the correct procedures in place.

It’s essential that trustees keep records of all the steps that are taken in order to show that they have complied with legislation and avoid any penalties. If the trustees fail to comply with the regulations they can be fined up to £5,000 (individual) or £50,000 in other cases.

In addition The Pensions Regulator may prohibit them from acting as trustees in the future.

Check out The Pensions Regulator website which has detailed guidance for trustees.