Trustee appointments and conflicts of interest
Trustee appointments and conflicts of interest
There are agreed procedures in place for the appointment of trustees to the Greater Manchester Pension Fund (GMPF) Management Panel and Local Board. GMPF has a conflicts of interest policy (which is a separate policy for the Fund). Registered trustees must declare any interest they have.
Every administering authority is expected to have its own, separate conflicts of interest policy that relates to the Pension Fund, which documents its approach to dealing with conflicts of interest relating to the Fund.
There are agreed procedures in place for the appointment of trustees to Management Panel and Local Board. GMPF also has a conflicts of interest policy and register, and trustees must declare any interest they have.
The GMPF Management Panel consists of Tameside Metropolitan Borough Council (TMBC) councillors and other councillors nominated by the remaining local authorities within Greater Manchester acting through the Association of Greater Manchester Authorities (AGMA). In addition, there is one representative of the Ministry of Justice.
The Advisory Panel members are appointed by the Chair of GMPF. Advisors work closely with the GMPF Management Panel and provide advice in all areas. Each local authority nominates a member to join the Advisory Panel, and there are six employee representatives nominated by the North West TUC. In addition, there is one representative chosen by the Ministry of Justice.
The Board consists of ten members:
Five member representatives
- Four are nominated by the recognised trade unions representing employees who are members of GMPF.
- One is selected directly from the membership of GMPF.
Five member representatives
- Two are nominated by TMBC.
- Two are nominated by the other Greater Manchester local authorities.
- One is nominated by GMPF’s non local authority employers.
Employer representatives can be office holders or senior employees. No officer or elected member of the administering authority who is responsible for the discharge of any function of the administering authority under the regulations may serve as a member of the Board.
The terms of reference for the Board provide full details on the appointment process
A conflict of interest is a financial or other interest, which is likely to prejudice a person’s exercise of functions as a trustee.
A conflict of interest may arise when a trustee is required to take a decision where the trustee is obliged to act in the best interests of GMPF but has a separate personal interest or another fiduciary duty owed to a different party in relation to that decision; thus giving rise to a possible conflict with his first fiduciary duty.
When potential conflicts of interest arise, they need to be managed. The way in which conflicts are managed will be case specific and will reflect the nature of the conflict. For example, it might be appropriate to sit out of certain parts of meetings or abstain from voting where there is a potential conflict of interests.
Some conflicts of interest will be too large to manage in which case it might be appropriate for the conflicted member to resign. In such circumstances they could be replaced, as appropriate, by the appointment of an independent trustee.
Actual conflicts of interest are prohibited by the Public Service Pensions Act 2013 and cannot be managed; only potential conflicts of interest can be managed. In instances where the conflict of interest is not clear or the implications are not wholly clear, the regulator would expect the matter to be referred to a lawyer to obtain guidance.
The administering authority is responsible for ensuring that actual conflicts of interest do not exist and for managing potential conflicts of interest.
The regulations place a duty on the administering authority in its role as scheme manager to satisfy itself that those appointed to its Local Pension Board do not have an actual conflict of interest before the appointment is made and ‘from time to time’ thereafter.
At each meeting, the Chair will invite declarations of interest. You should also raise any conflicts that arise during the meeting that you may have not initially been aware of.
Outside of meetings, you should refer to the GMPF conflicts of interest policy and if you have any questions or concerns, you should raise these with a member of the Executive Support team or the Solicitor to GMPF.
The Pensions Regulator has provided a detailed guidance document for scheme managers around managing conflicts of interest in three stages. These stages are:
- Identify
- Monitor
- Manage