Pension scheme and benefit plan liability

Trustees play a vital role in the running of pension schemes and, although many are volunteers, they are required to act in an increasingly professional manner. The obligations placed upon them by pensions law and other legislation are onerous. Together with an uncertain economic environment, the risks that trustees face have undoubtedly increased. Trustees must recognise that their obligations are personal and can attract personal liability.

The law requires trustees to be familiar with all relevant scheme documentation including the deed, rules, statement of investment principles and any other documentation relating to the scheme. The day to day administration of pension schemes, for example ensuring that all contributions are collected and paid in, and ensuring that all benefits are correctly calculated, is complex and detailed. Properly understanding and acting upon lengthy actuarial reports is no light task.

Many more mundane requirements, such as data protection and the Pensions Regulator’s lengthy guidance on record-keeping, are there to trip up trustees and other individuals who administer the scheme. The Regulator also produces codes of practice which are frequently updated and need to be observed by the trustees and sponsoring employers. The burden of all these demands alongside busy day jobs creates a natural risk of error or omission, however conscientious someone is. As can be seen, trustees need to be familiar with a very large amount of documentation, law and best practice.

In such an increasingly complex environment it has never been more important for the prudent trustee to have the peace of mind that insurance can provide.

Benefit plan liability policy Our policy insures pension schemes, benefit plans, sponsoring employers, trustees and other individuals involved with running a scheme or a plan Learn More

Case studies These pension scheme case studies should illustrate the possible risks to trustees and scheme administrators Learn More