95 / 462
g a z e t t e
april
1991
Trusteeship and the Pensions Act 1990
Introduction
What follows is a ganaral look at the Pensions Act 1990 from a
trustee's point of view, without attempting to review the Act in
detail.
Before the passing of the Act, the activities of trustees in relation
to schemes were governed by the Trustee Act 1893 and the
provisions of the documents constituting the scheme and, in
relation to the tax treatment of schemes, the Finance Acts of 1958,
1972 and 1974, the Income Tax Act 1967 and the Revenue
Commissioners' practice thereunder.
As a result of the passing of the Act, since the Act defines a trustee
Act, trustees will have to comply,
in addition, w i th the specific
requirements of the Act and of the
numerous orders and regulations
which will be made thereunder and
may be affected by directions,
orders, guidelines or codes of
practice from, and inspections or
investigations by, the Pensions
Board. While the diligent and
industrious trustee should have
nothing to fear, nevertheless he will
now need to devote much more
t ime to his t r us t eesh ip t han
heretofore in view of the extensive
requirements to be observed.
It appears that there may be
practical d i f f i cu l t i es in imple-
menting some aspects of the Act.
In addition, since trustees and
others involved will be dealing wi th
new law, much of which probably
" . . . one of the functions of the
Pensions Bosrd will be to
encoursge the treining of
trustees."
will develop on a day-to-day or
case-by-case basis, I believe there
will be a considerable need for a
high degree of co - ope r a t i on
between practitioners, trustees and
the officials of the Pensions Board
and of the Department of Social
Welfare in the operation of the Act
and t hat both solicitors and
trustees will ease their burdens if
particular care is given to the
d r a f t i ng of pens i on scheme
documentation.
Appllcstion
Some schemes are not established
under the formality of a trust, but
the persons responsible for admin-
istering them will be bound by the
as including a person who is
administrator of a scheme which is
not established under a trust. The
Act does not go so far as requiring
trustees to have any particular
qualification for acting as such, but
one of the f unc t i ons of the
Pensions Board will be to en-
courage the training of trustees.
by
Chetwode Hamilton,
Solicitor
General duties
By section 59, the Act imposes on
scheme trustees general duties,
wh i ch are expressly w i t h o ut
prejudice to t r us t ees' du t i es
generally and are in addition to any
other requirements under the Act.
These general duties are:
(a) To ensure, so far as is reason-
able, that the contributions
payable by the employer, and
the members where appropri-
ate, are received.
There is nothing to indicate
how a trustee should ensure
receipt of the contributions. If
contributions are to be paid on
a regular basis by specified
dates, a trustee might issue a
reminder if the relevant date
passes without any contri-
bution having been received.
Should he insist that payment
be made by standing order
and/or that arrangements be
put in place to deduct
contributions from wages?
What if the employer pleads
inability to pay? What is
"reasonable" will vary from
s cheme to scheme. The
Pensions Board may issue a
guideline or a code of practice
on this, as on other matters
whe re the Act does not
express spec i f ic require-
ments.
(b) To provide for the proper
investment of the resources of
the scheme in accordance
w i th its rules.
There is nothing to help the
trustee in indicating what con-
stitutes proper investment. To
some extent his attitude, and
that of practitioners advising
him, will depend on whehter
the fund is an insured or non-
insured fund. If it is non-
insured and management of a
fund is delegated to particular
firms or individuals then a
trustee may expect that he
would be regarded as owing a
duty of care in his selection of
the manager, if that function is
open to him. A trustee should
insist that management per-
formance should be monitored
and reviewed. In general, as
long as a trustee ensures that
the investment is in accord-
ance w i t h t he s cheme 's
constitution, he should have
nothing to fear. It follows that
trustees and practitioners
should ensure that the rules of
the scheme adequately pro-
vide for investment and give
the trustees clear directions
and discretions.
(c) Where appropriate, to arrange
for payment of the benefits
provided under the rules, as
they become due.
This is directed to ensuring
that trustees arrange for the
benefits actually to be paid. As
w i t h t he i nves tment and
management of funds, I doubt
if it is sufficient for a trustee
simply to ask someone else to
make the payments without
afterwards checking to see
that the payment arrange-
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