Member Nominated Trustee Director Vacancy Applying to become a Trustee of the Siemens Benefit Scheme
Siemens Benefits Scheme Trustees Would you like to have a say in how the Siemens Benefits Scheme is run? As a Member Nominated Trustee Director of the Siemens Benefits Scheme, your role, along with the other Trustees, would be to ensure the smooth running of the Scheme. The pension industry is a dynamic place. Trustees constantly face new and complex challenges that can be driven by Company requirements, changes in investment conditions and new legislation. Being a Trustee of the Siemens Benefits Scheme is an important job, as they look after around 50,000 defined benefit and defined contribution members and their assets of around 5 billion no small task! The requirement for company pension schemes to have Member Nominated Trustee Directors (MNTDs) was first introduced by the Pensions Act 1995. The Pensions Act 2004 requires at least one-third of the Trustee Board to be nominated by employee and/or pensioner members. There is now an opportunity for a new MNTD to be elected. This guide has lots of useful information for members of the Scheme who are thinking about applying for election as a Trustee. Role of an MNTD A MNTD has exactly the same role and legal responsibilities as the other Trustees. In order to understand and respond to the challenges of being a Trustee, you must be highly motivated and willing to put in a significant amount of time and effort on a regular basis. MNTDs have access to a number of external advisers, such as the Scheme s actuary, legal advisers and investment specialists, and will also be supported by Siemens in carrying out their role. 2
As Directors of the Siemens Benefits Scheme Limited, the Trustees are responsible for the Scheme s operation. Trustees do not have the power to make changes to the Scheme design the Company is the ultimate sponsor and generally has the power to change the terms and conditions however, Trustee agreement is required for most changes. Trustees are required to take a balanced, objective view of each situation. In extreme circumstances, this could lead to them coming into conflict with the Company, or even reporting the Company to The Pensions Regulator. A MNTD has a degree of exposure to the membership of the Scheme. Some changes to the pensions landscape are completely beyond the control of a MNTD, for example the 2009 market crashes, but this could carry with it potential personal reputation risk. You should, therefore, consider this before applying to become a MNTD. Under the Rules of the Pension Fund, Trustee Directors are protected from incurring personal liability for acting as a Trustee. So, to take an extreme example, if a member brought a legal claim against the Trustees for failing to invest assets properly, if you were a Trustee you would not have to meet any costs or expenses personally, even if the member won the case. The Rules also contain a provision that requires Siemens to indemnify each of the Trustees for any losses or expenses they personally incur while acting as a Trustee. However, these protections don t apply where Trustees commit a deliberate breach of trust; that is, they do something that they knew at the time was wrong, or omit to do something that they knew at the time should be done. Knowledge and experience requirements Whatever experience you have of the Scheme,and pensions, professional training is provided. But having a vested interest in the Scheme and the benefits it provides is a good start. There is a legal requirement to attain the right level of knowledge and understanding of the Scheme and pensions in general. As such, candidates nominated to become a MNTD are required to complete the first two elearning Trustee Knowledge and Understanding (TKU) modules provided by the Pensions Regulator at www.trusteetoolkit.com before they can stand for election. Then, in your first year as a Trustee, you would work through further elearning programmes within six months, along with taking the Pensions Management Institute s Awards in Pension Trusteeship (defined contribution and defined benefit schemes) qualification. You can find out more about this at www.pensions-pmi.org.uk A grasp of financial affairs, saving and investments, accountancy and audit procedures would also be useful, as you would need to be able to take on board large amounts of important, and often challenging, legal and investment documentation. Successful MNTDs are people who care about the wellbeing of their colleagues and fellow members. They are progressive and positively-focused individuals who have the ability to see the big picture and have members best interests at heart. They are people with a strong sense of professional commitment who are comfortable with the responsibility and accountability, and never act purely on their own self interest. 3
Commitment to the role MNTDs have to commit a certain amount of time to training and much of their work is conducted through meetings. In total, there will be around 16 days of attendance at formal meetings each year. Around 13 days of this will be for scheduled meetings. This includes four main Board meetings, other sub-committee meetings and training days. On top of this, additional meetings may be arranged often at short notice to deal with any urgent matters that arise. From time to time, small groups of Trustees are also required to form sub-committees to investigate and report on particular issues. Recent examples include reviewing pension scheme documentation, website design and selecting new fund managers. The meetings involve direct contact with senior Siemens employees and employees of financial institutions, actuaries, accountants and lawyers. Due to the pressure of time and the importance of the issues, Trustee meetings are conducted in a formal manner, with a written agenda and minutes. The accepted dress standard is a presentable business suit. Attendance is required at all meetings. Meetings normally start early and go on until quite late, so travel can also be early or late. Generally the meetings are in Frimley or London. You would also need to be able to find time to prepare for these meetings. This can include taking on board large amounts of information, some of which may only arrive a day or two in advance. There is also normally a regular flow of email correspondence, which often requires a prompt response.
5 Things you need to know 1. Flexibility To be an effective Trustee, you need to be able to control your work and time on a flexible basis and have bosses who understand, and are supportive of, this requirement. There are some categories of employment in which employees activities are strictly regulated, for example by production processes, customer demands or business appointments. In such cases, it may be difficult to perform Trustee duties effectively. 2. Remuneration Trustees receive no additional financial reward for their work for the Scheme, though the Siemens Benefits Scheme does reimburse travel and accommodation expenses. The law requires employers to allow Trustees paid time off during working hours if it is necessary to help them perform their Scheme duties. It is recognised that this could create pressure for some MNTDs in their day-today roles. To encourage a professional approach, the Siemens Benefits Scheme would, where appropriate, compensate the employer at an agreed rate for any time spent on official duties. 3. Term of office A MNTD is appointed for a period of four years. When the term of office expires, a MNTD can offer themselves for re-election. Removal of a MNTD requires the agreement of all the other Trustees and the Principal Shareholder. If a MNTD leaves the Scheme, they will automatically cease to be a Trustee. A MNTD can resign from office at any time. 4. The nomination process Each active member candidate needs to have their nomination supported by 20 other active members. They also need to explain what makes them suitable to be a Trustee and must complete the first two TKU modules as detailed on page 3. 5. The election process If there are only one or two eligible candidates following the nomination process, they will automatically be elected as MNTDs. Where there are more than two eligible candidates, there will be a postal ballot of the members who are eligible to vote. A list of eligible nominees will be sent to all active members, together with details of the experience of each candidate, and they will be asked to vote. The MNTDs will be appointed having obtained a simple majority of the votes cast in the postal ballot. If there is a tie, the new MNTD will be selected by the existing Trustee Board. Representative organisations will not be involved in the selection process the Trustee Board will communicate directly with the members and the members will participate in the nomination and election process as individuals. How to apply If you are interested in applying for the MNTD vacancy, please complete an application form and sponsor form and return them to: Pension Services Siemens plc Sir William Siemens Square Frimley Camberley GU16 8QD 5