What is a Trustee?

Trust based pension schemes are governed by a board of trustees who are the legal owners of the scheme. Occupational pension schemes are made up of employer and member nominated trustees. In some cases schemes will also have a professional trustee. There is a requirement for at least one third of a trustee board to be made up of member nominated trustees.

The assets of the pension scheme are held separately from the employer and the trustees are the custodians of the assets. The Trustees have a fiduciary duty to govern the scheme and act in the interests of scheme members. In practice many of the duties for governing the scheme are delegated by the Trustees. However, the responsibility for the scheme lies with the trustees.

Actuarial valuations of trust based defined benefit pension schemes are required every 3 years. The trustees have a pivotal role to reach agreement with the sponsoring employer for the technical provisions of the scheme and for recovery payments if they are needed.

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