Trustee of a multi-employer scheme? Read these updates from Ginevra Gatrell!

trustee

New regulations come into force on 6 April 2015 requiring trustees of relevant multi-employer schemes to be independent of any undertaking which provides advisory, administration, investment or other services in respect of the relevant multi-employer scheme.

To satisfy the requirements a majority of trustees, and in any event, the Chair must be independent.

In order to be “independent” a trustee must satisfy the following tests. 1 and 2 below are factual and therefore should be straightforward to determine. 3 and 4 below are more subjective and may need some analysis.

  1. He must not be a director, manager, partner in business with, or employee, of a service provider to the scheme (or an undertaking connected with a service provider). This applies at the current time and over the last 5 years. A connected undertaking would for example be another entity in the same corporate group.
  2. He must not be receiving payment or other benefit from a service provider (except payments/benefits in his role as trustee of the scheme).
  3. He must have been appointed via an open and transparent process. The regulations give some guidance as to appropriate processes.
  4. If he has a relationship with a service provider, consideration must be given to whether his obligations to the service provider conflict with his obligations as a trustee of the scheme, and whether his obligations as a trustee will take priority in the case of a conflict.

What does this mean?

Relevant multi-employer pension schemes, such as master trusts, should review the current trusteeships and ensure that they meet the necessary requirements relating to independence. Such schemes have until 5 July 2015 to comply.


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