Managing conflicts of interest in pensions


Published by a ½Û×ÓÊÓƵ Pensions expert
Practice notes

Managing conflicts of interest in pensions


Published by a ½Û×ÓÊÓƵ Pensions expert

Practice notes
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THIS PRACTICE NOTE APPLIES TO TRUST-BASED OCCUPATIONAL pension schemeS

Legal requirements in relation to conflicts of interest

Pension scheme trustees have a duty to act in the best interests of the scheme's beneficiaries. However, trustees may owe duties to other parties or have personal interests which conflict with that duty.

It is a general principle of trust law that trustees should not put themselves in a position where their duty to act in the best interests of beneficiaries conflicts with duties that they owe to other parties or with their personal interests. If trustees make decisions while subject to a conflict of interest that has not been appropriately managed, there is a risk that those decisions may be challenged by scheme members or overturned by the courts. It is important that the members of a scheme should perceive a conflict or potential conflict as having been properly managed.

The directors of a company that acts as a trustee of a scheme may also be subject to conflicts of interest.

Company directors have a statutory duty to

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Jurisdiction(s):
United Kingdom
Related legal acts:
Key definition:
Pension scheme definition
What does Pension scheme mean?

A pension scheme is a scheme or other arrangement which is comprised in one or more instruments or agreements, having or capable of having effect so as to provide benefits to or in respect of persons on retirement, on death, on having reached a particular age, on the onset of serious ill-health or incapacity or in similar circumstances.

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