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Becoming a trustee can no longer be viewed as an interesting pastime. Trustees look after the pension savings of millions of people, choose to back or sack some of the most talked-about fund managers and can exert influence in company merger and acquisition activity.

Every time a trustee makes a decision they place their personal assets on the line or, in certain circumstances, find themselves liable for civil and criminal penalties. Pension trustee liability insurance is thus a must-have protection for people performing such a key role in our society.

Our standard policy has a broad definition of wrongful acts and will pay for (amongst others) damages, judgments, expenses and defence costs, and costs of legal representation.

Product Highlights

  • Immediate quotations available on a wide range of criteria
  • Instant binding and issuance of policy documentation
  • Focus on rapid referral response times
  • Written on our comprehensive Elite pension trustee liability policy wording


  • Breach of trust
  • Breach of duty
  • Breach of statutory provision
  • Maladministration
  • Negligence
  • Administration errors
  • Wrongful omissions
  • Misstatements or misleading statements

Case Studies

To help you talk to your clients about the need for and benefits of pension trustee liability insurance, here are some real examples of incidents from recent years:.

Trustees sued by scheme members Trustees were responsible for a transfer of funds into a new pension scheme following the sponsoring employer’s disposal of a subsidiary. The rules required the amount to be such ‘as the trustees, after consulting with the actuary, decided to be just and equitable’. As such they consulted an actuary. However, just prior to the transfer date the value of the fund was enhanced by a strong stock market rise, taking the scheme from a deficit position to one of surplus.

The result was that the scheme members sued the trustees for not taking this increase into account within the transfer payment. Defence costs alone were estimated to be approximately £2m with several weeks in court, with the final costs being in the region of £5m in total.

Ombudsman decides trustees acted wrongly A claim for breach of trust was brought against a set of trustees following a transfer of surplus assets to the employer. Despite having received legal advice that their course of action was proper and having correctly amended the scheme rules to permit the repayment, the Pensions Ombudsman determined that the way in which the trustees made the transfer, amounted to an act of maladministration. The sponsoring employer was ordered to refund the surplus to the scheme.

Trustees are ordered to release funds from their own resources Pension scheme trustees were required to make good a deficit in the pension scheme, with an agreement that payments of £5,000 a month would be made by the employer. However, the employer’s cash flow position was unstable and as a result the trustees (who were also directors and shareholders of the sponsoring employer)lent back £5,000 a month to the company.

When the company went into administration a scheme member complained. The Pensions Ombudsman held that the loans were maladministered by the trustees and ordered them to pay the loans from their own resources (a total sum of £50,000). The trustees appealed but were dismissed.

These case studies are taken from the Pensions Ombudsman determinations. Under our Pension Trustee Liability insurance, defence costs and maladministration are normally covered, however each claim is reviewed individually in accordance with the specific policy wording.


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