Most registered pension schemes have one or more trustees who act separately from the employer or anyone else who set up the scheme.
Who can be a trustee
A pension scheme trustee can be:
- an individual
- an organisation
The trustee may also be the scheme administrator but each role has separate responsibilities.
There can be more than one trustee in a scheme and they can be a mixture of individuals and organisations.
Appointing and removing trustees
The trust deed setting up the pension scheme names the initial trustees.
The scheme rules set out who can appoint and remove a trustee. In certain circumstances a trustee can be appointed by a court or The Pensions Regulator.
Trustees are the legal owners of the pension scheme assets. You have to act:
- in line with the pension scheme trust deed and rules
- in the best interests of the pension scheme members
- impartially, prudently, responsibly and honestly
You may be personally liable for any loss caused to the scheme if something goes wrong.
Legislation sets out specific responsibilities and procedures for you to follow. If you don’t follow these rules the pension scheme may not get correct tax relief and/or there may be a penalty.
Some responsibilities come from the tax rules laid down by HM Revenue and Customs (HMRC). Other responsibilities come from non-tax legislation. The Pensions Regulator is responsible for monitoring how trustees follow these rules.
Your responsibilities to HMRC
You are responsible for:
- keeping records for the pension scheme for up to 6 years after the tax year they relate to
- completing form SA970 ‘tax return for trustees of registered pension schemes’
- reclaiming any tax deducted from pension scheme investment income
- supplying any information requested by HMRC as part of an enquiry
Your other responsibilities
You are responsible for:
- deciding how the pension scheme assets will be invested
- getting regular scheme valuations and ensuring there is enough money in a defined benefits scheme to pay the members’ pensions
- giving information to members about their pension savings under the scheme
- giving The Pensions Regulator information about the pension scheme
If the scheme is work based and has more than one member you must tell The Pensions Regulator about the pension scheme within three months of setting up the scheme.
The Pensions Regulator’s website has more information about these requirements and detailed guidance for pension scheme trustees.