This is established when a person gives another cash or assets which are then used for the benefit of a third person. Most occupational pension schemes are set up under trust for three reasons: security, tax relief and enforceability.
THIS PRACTICE NOTE APPLIES TO ALL TRUST-BASED PENSION ARRANGEMENTSUndertaking the office of trustee should never be taken lightly, and this holds particularly true in respect of pension trusts. It is fair to say that the position is a particularly onerous one, and certainly not one that can be conducted passively.The role of a pension scheme trustee in particular is to hold, manage and administer the assets of the scheme, and for those purposes to make (with other trustees) decisions and exercise powers conferred by the trust deed and the law. With power come obligations and responsibilities (ie duties), in respect of which the trustee is accountable to, and which may thus be enforced by, those beneficially interested in the scheme (as well as the Pensions Regulator in some cases). It is important for these purposes to note that trustees will be expected not only to obtain and hold the assets of the scheme, but in running the scheme to exercise both administrative and dispositive powers. The former relate to the handling and management of the scheme assets, including notably deploying or investing them. Dispositive powers concern the distribution of those assets to the beneficiaries of the scheme. To this end, there are some general duties owed by trustees. There are also specific duties which apply to different types of powers and
Pension scheme disputes—jurisdictions for resolutionThere are three jurisdictions in which disputes relating to pension schemes can be determined and resolved, each with its own rules on costs:•the courts•the Pensions Regulator•the Pensions OmbudsmanThe courtsSince occupational pension schemes are generally constituted by trusts subject to supervision under the court’s inherent jurisdiction, many matters are brought before the Chancery Division of the High Court (assigned to the Pensions Sub-List of the Business (ChD) List of the Business and Property Courts of England and Wales) by the trustees, scheme employer or beneficiaries to resolve issues concerning the construction or administration of the trusts of the scheme.Other disputes which involve a pension scheme may also be brought in the courts.The Pensions RegulatorThe Pensions Regulator has a wide role in the supervision of pensions, and can take a more proactive, interventionist approach towards employers, trustees and associated persons in order to protect pension scheme funds.For further information on the Pensions Regulator, see The Pensions Regulator—overview.The Pensions OmbudsmanThe role of the Pensions Ombudsman is particularly important in resolving individual disputes brought by members.For further information on the Pensions Ombudsman, see Internal dispute resolution and The Pensions Ombudsman—overview. The right of indemnityIn order to understand the issue of costs in relation to pension schemes, it is first necessary to appreciate the right
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This week’s edition of Private Client highlights includes: (1) Higgins v HMRC, in which the Court of Appeal has upheld the taxpayer’s claim for principal private residence relief on a property he purchased off-plan and was unable to occupy for over two years; (2) Cook v AIB which held that, under Scottish law, the drawdown of an approved pension agreement is ‘income’ and therefore does not vest in the trustee in sequestration; (3) Zhang Hong Li v DBS Bank and others, a decision of the Hong Kong Court of Final Appeal which held that the trustees did not owe any high level supervisory duty to the beneficiaries in respect of the investment activities of an underlying company; (4) The new Solicitors Regulation Authority (SRA) Standards and Regulations 2019, which replace the SRA Handbook and Code of Conduct 2011, and (5) The Crown Dependencies update their joint guidance on applying each jurisdiction’s economic substance regimes.
This week's edition of Private Client weekly highlights includes: (1) The Court of Appeal’s decision in Cowan v Foreman on standstill agreements in 1975 Act claims; (2) FSHC Group Holdings Ltd v Glas Trust Corporation Ltd on rectification of written contracts and deeds for common mistake; (3) OPG and HM Land Registry guidance on the Guardianship (Missing Persons) Act 2017; (4) The Privy Council’s decision in Volaw v Comptroller of Taxes on privilege and self-incrimination; (5) A comparative analysis of Scotland’s co-habitation law, and (6) The Supreme Court’s decision in Cape Intermediate Holdings Ltd v Dring on disclosure of court documents to non-parties.
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