Most trustee boards work well and effectively as long as the rules are followed correctly and they keep within the restrictions of the legislation and scheme documents. The law requires you to appoint certain advisers and advice should always be sought before making complicated decisions.
It's important to realise, however, that if anything goes wrong, you could be personally liable for any loss which you or, any trustee, cause to the scheme as a result of a breach of trust. Even if you stop being a trustee, you are still liable for the decisions you took when you were a trustee.
A breach of trust happens when:
Although rare, a breach of trust could also happen through fraudulent or dishonest behaviour. More commonly, though, breaches of trust happen unintentionally. For example, this could be due simply to an administrative error or oversight.
To stop either of these from happening, there should be adequate procedures in place for checking that those running the scheme are doing everything correctly. You can also be held responsible for a breach of trust by another trustee if you fail to stop them committing a breach.
If TPR or a court fine you as a result of a breach, you cannot pay the fine out of the scheme's assets unless the court agrees to this. However, the trust deed and rules should contain an indemnity clause which will excuse you from liability except in cases of wilful negligence or wilful misconduct meaning the employer can pay the fine, if you are sued. They may also be able to reimburse you or provide indemnity insurance.
The rules may contain an exoneration clause exonerating you from responsibility for financial loss except in cases of wilful negligence or wilful misconduct. Both of these clauses however, won't cover criminal penalties.