Mutuality is good news for any firm looking to build a business in step with its customers. There is good news for every mutual including the recently founded Pensions Mutual.
A group of friends got behind me and we agreed to found a mutual to deliver a CDC scheme in step with our customers, large companies looking to do more for staff than a DC scheme could do.
My colleague Aron Maus, applied to Companies House for Mutual in our name and was told that going forward we would need to be registered with the FCA to call ourselves Pensions Mutual.
We found ourselves talking to the FCA’s Mutual Societies Development Unit. We applied on the day it opened its doors so we may have had special treatment but I would like to think that all mutuals operating in the financial sector get the same attention and help as we have had. This is what we were offered this help
- A link to the rules of the Co-operative Group Limited. The Co-operative Group have two classes of member – i) individuals; and ii) ‘Independent Society Members’, who are other consumer co-operatives.
- You’ll see in rule 38.3 that they have weighted voting for those society members, based on ‘Purchases Regulations’ linked to ‘Qualifying Purchases’.
- The rules of Co-operatives UK Limited. You’ll see in rule 18 they have different classes of member. Under rule 24, members pay an annual subscription. Rules 75 to 83 deal with voting. Voting is based on subscription levels, with a guardrail against any one member having more than 40% of the total. Rule 98 covers composition of the board – which has representatives from different constituencies.
- Voting
- Share capital arrangements
- Board composition
- Application of profits
On registering a society – we have the practical steps here: Register your society | FCA. I’m happy to look at a draft once you’re at that stage. Our usual SLA is 15 working days – though if it’s submitted through the Mutuals Society Portal, we’re now aiming for 10.
We needed help on dividends as we needed to reward funders of the mutual who were investing in the mutual either as well as or in place of in the CDC scheme.
I quote this as it shows how the Government’s attitude to Mutuals has changed. It comes as no surprise that we will get a Champion from the Treasury.
We have found from those who want to fund us that there is a lot of interest in mutuals as a partnership for those building the new retirement.
We are encouraged that Pensions Mutual is flowing with the tide back to mutuality in financial services.
This is what the Treasury is saying here
Rachel Blake gave her backing to the growth of the mutuals and co-ops sector and doubling its size at the Co-op Congress today – an annual event which brings together leaders, practitioners, and innovators to explore shared challenges and opportunities.
Mutuals and co-operatives are businesses or organisations owned and run by their members, and they play an important role in strengthening local economies and giving people a stake in the places they live and work.
The appointment of a new champion would help raise the profile of the sector and represent their interests across government.
Across the UK, there are more than 8,400 registered co-operative and community benefit societies, collectively holding around £223 billion in assets and 12 million memberships.
This is part of the Government’s plan to fulfil its commitment to doubling the size of the sector and follows the Department for Business and Trade’s call for evidence on co-operatives and non-financial mutuals earlier this year.
It also comes shortly after the introduction of the Financial Services and Markets Bill to parliament which includes credit union common bond reforms. They will make it easier for credit unions to expand and broaden their membership which will allow more people access to affordable credit and a safe place to save.
Rachel Blake MP, Economic Secretary to the Treasury, is expected to say today:
We want to see the co-operative and mutual sector grow and thrive.
We are committed to unlocking the full potential of the sector to support inclusive growth across the UK economy. This has been a priority from the beginning.
We are making real progress.
Minister for Small Business & Economic Transformation, Blair McDougall MP, said:
Co‑operatives and mutuals have a vital role to play in our Small Business Plan, rebuilding pride in place in the UK and supporting workers and communities.
By appointing a Co‑operatives and Mutuals Champion, we will shine a light on this model, breaking down barriers to businesses, and back our ambition to double the size of the sector.
I am aware you are thinking of proprietors of CDC schemes, but I have for some time now been considering whether a pension scheme itself is not a mutual organisation.
The concept of voting rights is an interesting thought – should each member in mastertrust DC and CDC schemes not be given a vote and trustees be voted into and out of post by the Members?
This would partly reflect the MNT requirements in place for DB schemes, until the employer disenfranchises the Members by appointing a professional Trustee. Even here deferred members do not usually qualify for election or have a vote.
Once again Stagecoach might have set an interesting precedent.
Yes, Stagecoach Group Pension is interesting , who owns the surplus has been decided , these are the key participants in a kind of mutual. Other DB schemes could be seen as mutuals – as for participants of master trusts, do they get a say?