A defined benefit scheme must appoint trustees to oversee the trust.

Traditionally, they have included one or more of the directors or senior executives, the company secretary and the company accountant and there may also be one or more member-nominated trustees. They must have an understanding of pensions and trust law.

The only qualification needed to be eligible to act as a trustee is the legal capacity to hold property. This means they cannot be minors, certified insane or disqualified under Pensions Act 1995 or prohibited by TPR

Trustees’ responsibilities:

• Hold & invest trust assets to achieve best financial return for the security
• Act within the provision of the trust deed
• Maintain the scheme for the best interests of the members
• Produce statement of investment principles
• Maintain scheme in best interests of members
• Know & understand scheme
• Obtain audited accounts
• Not reply on advice from anyone they haven’t appointed themselves
• Drawing up a schedule of contributions
• Prepare statements of investment principles, statements of funding principles and a recovery plan

Trustees’ powers:

• Hold scheme assets, subject to rules within the trust deed
• Carry out transactions
• Determine all scheme enquiries

Member-nominated trustees/directors – The requirement that at least 1/3 of trustees are member nominated. There are some exemptions:

• Every member of the scheme is a trustee
• The scheme only has 1 member
• The sole trustee or all trustees are independent
• The scheme is a small insured scheme