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Private pensions

Trust-based pension schemes and the trustees' role

Your rights as a member of a pension scheme are valuable and important to you and your dependants. As your pension may not start for many years and may continue long after you retire, your scheme must be managed properly so it is able to pay your benefits when they are due. Occupational pension schemes are normally set up under trust. The scheme’s assets are looked after by trustees on behalf of members, their dependants and other beneficiaries.

A trust is a legal arrangement under which trustees hold the assets of the pension scheme in a trust fund for the benefit of the members of the scheme and their dependants, and for the purpose of providing income in retirement.

The main reason for separating the scheme's assets from the employer's business is to ensure that these assets will be available to pay members' pensions whether or not the employer stays in business. Funding the pension entitlements as they build up also helps to spread the cost of providing pensions over the working life of the scheme members.

Under trust law and the Pensions Act 1990, pension scheme trustees must ensure that schemes are run properly and they must protect your rights as a scheme member. They are also responsible for whistle-blowing to the Pensions Authority if they think something is seriously wrong.

In some schemes, members are able to nominate representatives to act as Member Nominated Trustees. For more information on being a trustee see the Pensions Authority's 'Trustee Handbook' under 'Related Documents'.