Payments for Employee MNDs
From Mnd
On the topic of payments from the company to the MNDs, it is no secret that I am in favour of payments to retirees but against payments to employees. I don’t quite understand what the company is doing here.
The quote below from a survey published by Mercer in the middle of last year makes it clear that it is, to say the least, highly unusual to pay employee MNDs, because they are already being paid for their time:
- 'Trustees who are not independent professional trustees tend to be paid only if they are pensioners. Their median salary is £5,000. Active members are generally not paid, reflecting the view that these trustees are considered to be paid already in their main occupation.'
That had always been company’s position until last November, and I just don’t see what has changed. I have accepted what the company has handed out, but I believe we’re going to have to hand most of it back.
It just doesn’t seem fair to pay employees a £5,000 top-up, as well as their normal salary, when retirees are only getting £5,000 in total.
Let’s suppose the average employee MND is earning £50,000 a year, and that his trustee work takes up about 10% of his company time. The position in the past was that the employee continued to be paid 100% of his or her salary, even though they were only using 90% of their time on company business. The company was effectively paying them 10% of £50,000—i.e. £5,000—to do pensions work.
Because employee MNDs and retiree MNDs do the same work for the Trust, they have to be paid the same, under Equal Pay legislation. Therefore it made perfect sense to pay retiree MNDs £5,000.
So far, so good. But now the company has come along and given the employee MNDs an additional £5,000. The situation is no longer one of equal pay for retirees and employees. I don’t think it’s right. I can think of many ways I could spend the money, but I have been a trustee for the past four years without a financial incentive. Employees need to think carefully about what the company intends the payment to mean. Is it for the complexity of the task? Or is it to pave the way for trustee assessments in your annual appraisal? Or to buy your confidentiality on everything the trustee considers? Or even to build up a reserve in case the trustee directors are individually sued in years to come, long after they have left office?
