BAA Pension Trust Company Limited is the corporate trustee of the Scheme (the “Trustee”).
The Pensions Act 2004 (the “Act”) provides that where a pension scheme has a single corporate
trustee, that trustee must put in place and implement arrangements which provide for at least
one-third of the directors of the corporate trustee to be member-nominated directors (“MNDs”).
The Act provides that these MNDs must be appointed by way of a nomination and selection
process, the detailed implementation of which is a matter for the trustee.
The bulk of the Scheme’s MND arrangements are set out in Schedule 3 of the Rules of the
Scheme. This Policy consolidates the provisions under the Rules with further details regarding
the operation of the Scheme’s MND arrangements.
The Rules and this Policy are subject to the provisions of any overriding legislation regarding
member-nominated trustees and directors that is in force from time to time.
For the avoidance of doubt the Independent Trustee, as defined in the Rules, is not a full trustee
for the purposes of the MND legislation and the provisions set out in this Policy do not apply to
directors of the Independent Trustee.
In this Policy, terms which are capitalised shall, unless defined otherwise in this Policy, have the
same meaning as in Rule 1.1 (Interpretation) of the Rules.
Number of MNDs
There shall be eight directors of the Trustee, of whom four shall be MNDs and four shall be
representatives of LHR Airports Limited (the “Company”).
Each MND shall be elected by the contributing Members or Pensioners (as the case may be)
from a particular constituency, as set out below (“Constituencies”).
Constituencies
The four MNDs will be drawn from and elected by the following Constituencies:
Three of the MNDs (“Members’ representatives”) are selected by contributing
Members of the Scheme (“Active Members”) who belong to the Heathrow
constituency.
One MND (the “Pensioners’ representative”) is selected by Pensioners (which, for
the avoidance of doubt, excludes persons in receipt of survivors’ benefits).
Where necessary, the Company shall notify the Trustee which Constituency a Member is a part
of and, if required by the Trustee, shall confirm any changes to such membership prior to the
election of a new MND. The Trustee shall administer the Policy on the basis of such
notifications.
The Trustee has considered the option of involving deferred Members in any MND nomination
and selection process, but has decided to exclude deferred Members (as is permitted by
legislation).
For the avoidance of doubt, each MND shall have a duty to act in the best interests of all the
beneficiaries of the Scheme, not just those beneficiaries to whom their particular Constituency
relates.
Nomination process
Within six months of a vacancy for an MND arising, a communication will be sent to all
Members or Pensioners of the Scheme (as the case may be) in the relevant Constituency inviting
them to nominate themselves as MNDs and either enclosing a nomination form or providing
details of an online nomination form.
Persons wishing to nominate themselves for the role of MND (“Nominees”) must provide the
following information on the nomination form:
a biographical/election statement of not more than 150 words;
a passport-type photograph;
a declaration of their consent to be nominated as a candidate for election for the
relevant constituency;
a declaration that they satisfy the eligibility requirements for appointment as an MND;
details of any other positions held which may give rise to any potential conflicts of
interest or duty; and
the names and email addresses of two other Active Members or Pensioners (as the
case may be) from the relevant Constituency (“Nominators”) seconding the
nomination.
A Nominator must not nominate more than one Nominee in respect of a single MND vacancy.
Each Nominator will be asked to confirm in writing (including if appropriate by electronic
communication) that they wish to second the nomination of the Nominee.
Nominees shall have one month to submit their nomination forms.
Eligibility
Any Active Member or Pensioner is eligible to be selected as an MND provided that he or she:
is over 18;
has not been disqualified from acting as a trustee (e.g. anyone who is an undischarged
bankrupt, has been disqualified as a director of a company or who has been convicted
of certain offences involving dishonesty or deception); and
if he or she is a Pensioner:
is not currently employed or otherwise engaged by (and has not been within
the previous 12 months) a company which could be considered a competitor
to the Company (or the parent or subsidiary of such a company), or by a
body that is active in the regulation of the Company or a body which
provides services (such as consultancy services) to such a regulator; and
does not otherwise hold any position which could put him or her in a
position of potential conflict with the interests of either the Company or the
beneficiaries of the Scheme as a whole.
If the Trustee considers that a Nominee is subject to a potential conflict of interest which might
render him ineligible under 5.1.3 above, the Trustee may request that the Nominee provide
further written information regarding their potential conflicts, and/or attends an interview with
the Trustee board in order that the Trustee may decide whether the Nominee’s potential
conflicts are such that he or she does not satisfy the eligibility criteria set out in 5.1.3 above.
The Trustee has complete discretion to decide whether a Nominee meets the eligibility criteria,
and the decision of the Trustee on this point with regards to a Nominee shall be final.
If in the view of the Trustee a Nominee does not meet the eligibility criteria, this will be
confirmed in writing to the Nominee and the Nominee will not move to the selection stage of
the MND nomination and selection process.
The Trustee may if it wishes delegate any of its functions or decision-making regarding the
eligibility of Nominees to a sub-committee or other body, on such terms as to the scope of the
delegation as the Trustee decides.
Non-Members, deferred Members and dependants are not eligible to be Nominees or
Nominators or to vote for MNDs.
Selection process
Where there are only two Nominees who satisfy the eligibility criteria for the vacancies for an
MND, the Nominees will automatically be appointed as the new MND.
If more than two Nominees satisfy the eligibility criteria in respect of a vacant MND position,
an election will be held in respect of those positions.
All Pensioners of the Scheme (excluding, for the avoidance of doubt, persons in receipt of
survivors’ benefits) shall be eligible to vote for Pensioners’ representatives.
All Active Members of the Scheme are eligible to vote for the Members’ representative.
The biographical/election statements provided by Nominees (which may be edited for length if
more than 150 words) will be included in a booklet which will be circulated to all Members or
Pensioners in the relevant Constituency.
The ballot for such elections shall be conducted by the Electoral Reform Society or such other
organisation as the Company, with the agreement of the Independent Trustee, shall decide.
The election of MNDs will operate on the single transferrable vote system.
Voting papers will be issued to eligible voters within one month of the closing date for receipt
of nominations.
Eligible voters shall have one month in which to vote for their chosen candidate.
The successful candidates shall be notified of his or her success within two weeks of the election
closing.
Appointment
Following the selection of a Representative in accordance with the process set out above, the
Representative shall be formally appointed by resolution of the Company as soon as possible,
and in any event not more than two months, after the election concluded.
Insufficient nominations
Should no applicants put themselves forward for a vacant MND position, or should the Trustee
decide that no Nominees have satisfied the eligibility criteria for selection as an MND, the role
of MND for the relevant Constituency will remain vacant for up to 12 months.
After 12 months, the Trustee will issue a further communication to all eligible Active Members
or Pensioners (as appropriate), beginning the nomination process again by inviting them to put
themselves forward.
This process shall be repeated every 12 months until the vacancy is filled.
Periods of office, resignations and removals
Subject to the provisions which follow, each MND shall be appointed for a period of three
years, four years or five years from the date of their appointment, as determined by the Trustee.
The term of an MND’s office may, if the Company and Trustee agree, be extended by up to six
months.
A Members’ representative who ceases to be an Active Member of the Scheme shall be deemed
to have resigned as a director of the Trustee and will be automatically removed from office from
the date he or she ceases to be an Active Member.
A Pensioners’ representative who in the opinion of the Trustee no longer fulfils the eligibility
requirements which apply to Nominees for the position of Pensioners’ representative shall be
deemed to have resigned as a director of the Trustee and shall automatically be removed from
office from the date that, in the view of the Trustee, he or she ceased to fulfil those requirements.
An MND may resign from office by giving written notice to the Secretary of the Trustee of their
intention to do so.The Company may remove an MND with the unanimous agreement of the
other Trustee Directors.
If an MND fails for a period of six months to attend in person any meeting of the board of
directors of the Trustee, the other Trustee Directors may unanimously agree to request that the
Company remove him but he or she shall be given not less than seven days’ notice of the date of
the meeting at which the remaining members of that body intend to consider making a request
for that MND’s removal.
An MND will cease to be a Trustee Director if he or she is disqualified from acting as a trustee
or director.
After an MND’s term of office ends, a new nomination and selection process will be carried out,
subject to the following provisions.
If an MND resigns or is removed before the end of their term, the Trustee may either hold a new
nomination and selection process to select a replacement, or if the Trustee considers
appropriate, may offer the vacant position to the next most successful candidate from the last
election for that Constituency who satisfies the eligibility criteria.
An MND whose tenure has come to an end may be nominated for re-election provided he or she
continues to meet the eligibility requirements.
If an outgoing MND has not completed their full term of office, any individual elected as his or
her replacement will begin a fresh term.
Training
A newly selected MND will be required to attend an initial training day prior to attending their
first meeting of the Trustee board.
Thereafter, further training will begin as soon as practicable after appointment and shall
continue throughout the MND’s term of office in accordance with the Trustee’s policy
regarding training.
Review of arrangements
This Policy is approved by the Trustee on the date set out below.
The Trustee shall review this Policy at least every three to five years and will make amendments
to this Policy as it sees fit.
