Article
29 July, 2020
There is a general rule of equity that trustees, just like all other fiduciaries, must not:
…where there may be a conflict between their duty as a trustee and their personal interests and other duties.
This is a rule of general application, affecting all actions of and transactions with fiduciaries. Given how wide the impact of this could be in relation to pension schemes, where trustees are often members, Parliament has intervened by statute under section 39 of the Pensions Act 1995, which effectively excludes the rule from applying to the exercises of powers "merely because their exercise in that manner benefits, or may benefit, him as a member of the scheme".
The general rule also has a number of sub-rules that apply in specific situations, including:
Clearly this can be a mine field for Pension Trustees and we are able to advise on any issues that may arise.
Generally, the consequences of a conflict is that a trustee is unable to act. There are exceptions to the rules, or the rules may not apply in certain circumstances, including:
Once a conflict has been identified, there are a number of possible ways of dealing with it. These include:
For more information contact Ben Wilson in our SIPP & SSAS department via email or phone on 0333 207 1130. Alternatively send any question through to Forbes Solicitors via our online Contact Form.
Learn more about our SIPP & SSAS department here
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