What is a trustee?

A pension trustee is someone who technically holds an occupational pension scheme's assets for the beneficiaries.

They act separately from the employer for the benefit of scheme members and their powers are written in the trust deed and the scheme's rules.

Who can be a trustee?

A trustee must be 18 or over and can be:

  • An employee of the employer
  • The employer
  • A scheme member
  • A business associated with the scheme - a company which has links with the employer
  • A professional trustee
  • A professional trustee company.

Trustees are generally appointed in line with the trust deed, by the employer or existing trustees. Most schemes must have one or more trustees nominated by the members. 

Removing trustees

Once appointed, trustees can be removed by other trustees (for a member-nominated trustee or member-nominated director the law says that all the other trustees must agree), the Pensions Regulator (formerly known as the Occupational Pensions Regulatory Authority - Opra), or a court in line with the Trustee Act 1925.

They are removed in line with the trust deed which covers the trustee resigning, dying, retiring or being removed, or if the period of office for a member-nominated trustee or member-nominated director ends.

What is a trustee's legal duty?

For most types of schemes, trustees have a legal duty to:

  • Appoint professional advisers
  • Keep financial and member records
  • Register a scheme, pay the annual levy and take decisions
  • Hold and take records of meetings, decisions and transactions
  • Keep scheme assets separately from the business assets
  • Obtain actuarial valuations every three years
  • Obtain each year, audited scheme accounts within seven months of the scheme year-end date
  • Take investment decisions (in accordance with the statement of investment principles) and appoint advisers for some investments
  • Provide information to members, beneficiaries and prospective members
  • Sort out member disputes
  • Inform members of their choices at retirement (the Pensions Regulator has produced a leaflet which can be used for this purpose).

The Pensions Act 2004

The Pensions Act 2004 requires trustees to have knowledge and understanding of the law relating to pensions and trusts, and in particular their own scheme. We can provide trustees with basic training to help them meet these requirements.