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4.0 Introduction

This section clarifies the different forms of trusteeship:

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between individual trustees

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where a company acts as trustee (corporate trustee)

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between trustees with special functions.


Comment

When individuals are appointed as trustees they generally can expect to be one of several trustees responsible for running the trust [see 2.0 for definition of trust]. Where the trustee is a corporate trustee (usually a company whose purpose is to act as a trustee) the company acts as the trustee and is run by its directors. Generally speaking, the role, duties and responsibilities of directors of a trust company are identical to those of individual trustees. Under the Member-Nominated Trustee provisions, at least one-third of the directors of the company have to be nominated and selected/elected by the pension scheme membership or representative bodies, in exactly the same way as individual trustees are appointed.

Member-Nominated Trustees

Types of Trustee

Initially, between April 1997 and April 2006 (under the Pensions Act 1995), and since April 2006 (under the Pensions Act 2004), many schemes continue to use their own trustee selection procedures, as an alternative to the ‘prescribed appropriate rules’ basis. Under the Pensions Act 2004, effective from 6 April 2006, all occupational pension schemes are expected to have one-third of their trustees appointed as member-nominated trustees. The Act also grants the government powers to increase the minimum proportion from one-third to one-half of all trustees (possibly disregarding independent trustees) at some time in the future.

Whatever their titles, trustees (independent statutory, company-appointed or member-nominated) are not appointed to negotiate for benefits and contributions, nor to represent any particular class or group of members. Their role is to protect the financial interests of all members and beneficiaries. Members may need to be made aware of this. Schemes should, ideally, avoid using the term ‘pensioner’ trustee for this reason.

An individual appointed to be a trustee is expected to act impartially with integrity and he/she should have a good reputation. Once in office, trustees are expected to have knowledge and understanding of the law relating to the running of pension schemes (pensions law, investment, funding, etc.) and be familiar with their own scheme documentation













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