Appointment, removal and substitution of pension trustees

The following Pensions practice note provides comprehensive and up to date legal information covering:

  • Appointment, removal and substitution of pension trustees
  • How can trustees be appointed, removed or substituted?
  • Appointment, retirement and substitution of trustees under trust deed and rules
  • Interplay with statutory powers
  • Who may exercise the power?
  • Exercise of power of appointment and removal
  • The number of trustees and quorum
  • Method of appointing and removing trustees
  • Appointment and removal of directors of a trustee company
  • Invalid removal or retirement of trustees and ratification of trustee decisions
  • More...

Appointment, removal and substitution of pension trustees

Occupational pension schemes are generally constituted by a trust, and as such are governed by a board of trustees, whether individual trustees or a corporate trustee (in which case there will be a corporate board of directors). In either case, the board of trustees can be sizable.

Moreover, where applicable, a scheme must comply with legislative requirements relating to the appointment of member-nominated trustees or directors. Legislation (the ‘Member-nominated trustees (MNT) legislation’) requires that at least one-third of trustees are member-nominated trustees (or at least one-third of directors are member-nominated directors) and overrides scheme rules or a trustee company's articles of association to the extent that they conflict with that requirement.

For more information, see Practice Note: Member-nominated trustees (MNTs) and member-nominated directors (MNDs).

Accordingly, since a pension scheme will often run for a long period of time, with frequent changes in membership, there is likely to be numerous occasions where the trustees of a scheme will need to change. Indeed, in some schemes there can be a fairly high turnover of trustees over time.

To ensure the efficient and valid running of a scheme, it is important that appointments and removals are conducted properly, since the failure to do so can be catastrophic for the scheme. While there are numerous ways this can be achieved, unfortunately there are a

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