Member Nominated Directors

Introduction

Since 31 October 2007, the Pensions Act 2004 ('the Act') requires the Trustee of the ZF UK Pension Plan (ZF UK Pensions Trust Limited) to put in place arrangements for at least a third of its directors to be nominated by Plan members.

The arrangements must:

• Include a nomination process (in which at least active and pensioner members or an organisation that adequately represents them are eligible to participate);
• Include a selection process in which some or all of the members are eligible to participate; and
• Comply with other statutory requirements.

The principles for how the Trustees should decide on the arrangements are:

• Proportionality;
• Fairness; and
• Transparency.

Number of Member Nominated Directors (MNDs)

ZF UK Pensions Trust Limited currently has nine directors. The number of MNDs is three.

The nomination process

• What is the timetable for the 2019 process?

  This is the invitation for nominations to fill the current vacancies for MND’s. The deadline for nominations to be received is 30 June 2019.

• Who can be nominated to be an MND?

  In order for a person to be nominated as an MND, he or she must:

  • Be a deferred, pensioner, widower, dependant or pension sharing spouse member of the Plan.
  • Not have any interests outside of the Plan which would conflict with the interests the person would have as an MND (for instance, such a conflict could arise if the person is now employed by a business which is in competition with ZF Friedrichshafen AG, or any of its subsidiary companies);
  • Be able to devote sufficient time to the role of being an MND.

• How can nominations be made?

  An application form and questionnaire must be completed and submitted to ZF UK Pension Plan, Corporate Services with a Curriculum Vitae, before 30 June 2019. The application form requires the nominee to confirm that they consent to the nomination and requires the nomination to be supported by three other members of the Plan.

The selection process

Once the nominations have been received, the nominees with fully completed applications enter a selection pool. A Trustee Appointment Committee will review the nominees in the selection pool in order to shortlist up to three candidates for the vacancies on the Board. A Trustee Sub-Committee will then decide upon the ultimate appointments by majority decision.

• The Trustee Appointment Committee

  The nominees in the selection pool will be reviewed by a Trustee Appointment Committee. This will consist of:

  • An existing member director of the Board;
  • An existing company director of the Board;
  • The Trustee secretary;
  • A senior member of the ZF UK Pension Plan management team.

  If any of the above individuals have submitted a nomination form themselves, they will not be able to sit on the Trustee Appointment Committee. In which case, their place on the Committee for that selection process will be taken by an equivalent individual.

• Trustee Sub-Committee

  The shortlisted nominees will be interviewed by a Trustee Sub-Committee. This will consist of:

  • An existing member director of the Board;
  • An existing company director of the Board;
  • The Plan secretary;
  • A Human Resources representative of ZF Friedrichshafen AG.

  If any of the above individuals have submitted a nomination form themselves, they will not be able to sit on the Trustee Sub-Committee. In which case, their place on the Committee for that selection process will be taken by an equivalent individual.

Criteria for appointments

• General criteria

  The following factors will be considered by the Trustee Appointment Committee and Trustee Sub-Committee:

  • General skills, intellect, experience and competency for the role;
  • Relevant experience of pension schemes, particularly any recent previous experience as a trustee of a large UK defined benefit pension scheme. If any of the current MNDs are nominated in relation to the first vacancies to be filled under these new arrangements, they are likely to be given specific credit for this experience;
  • Willingness to devote the time required to the role;
  • Personal interest in the role and motivation for becoming an MND;
  • Willingness to sit the Pensions Management Institute's Awards in Pension Trusteeship or other suitable qualification;
  • Interpersonal skills and ability to work with others;
  • Access to internet resources and an email address;
  • Whether the person is likely to be prevented by any practical considerations from attending trustee meetings or otherwise fulfilling the role of an MND.

  There will be no formal quota for a certain number of MNDs to be drawn from any particular class of membership as this would be age discriminatory. However, the selection panel may take into account the overall balance of the Trustee Board when making its selection.

• What happens if vacancies are not filled?

  In the unlikely event that a vacancy for an MND is unfilled, the nomination and selection process set out above will be repeated every year.

Arrangements for future MND appointments

In order to ensure that any vacancies are filled as quickly as possible, rather than seeking nominees at the time a vacancy arises, a pool of nominees will be retained. An invitation for nominations to be included in the pool will be issued in the Plan’s annual newsletters. A nomination will remain valid for five years. This means that if a member is not selected for the first vacancy which arises following his or her nomination, this would not prevent the member from being selected in relation to a subsequent vacancy.

Term of office and resignations of MNDs

Term of Office

MNDs will generally be appointed for a term of office of 4 years.

Resignations and removal of MNDs

MNDs are able to resign from office at any time and it is also possible for all of the other directors of ZF UK Pensions Trust Limited to resolve to remove an MND from office. In addition, if an MND ceases to be a member, their term of office will automatically cease at the earlier of twelve months from the date they cease to be a member or upon the completion of their term of office if earlier.

If an MND leaves office before the expiry of his or her term of office, the selection process will be implemented using the pool of current nominations so that a suitable replacement is found as soon as possible. At the end of the term of office, an MND can be re-nominated provided that he or she continues to satisfy the criteria set out above.

Future reviews of the MND arrangements

These arrangements can be reviewed by the Trustee Board at any time. In accordance with guidance from the Pensions Regulator, it is proposed that the arrangements will be formally reviewed after three years. That is, of course, unless a significant event should occur which would make it appropriate to review the arrangements earlier.

Documents relating to this section:

Download full details of MND arrangements

The role of a Trustee

application form and questionnaire