News and Insights
7 July 2021
This decision of the Royal Court of Jersey confirms the risks which may arise where directors of a business are also trustees of the employee pension scheme.
In this case on the winding up of a final salary pension scheme a proportion of the proceeds was paid into the business. In taking this step there was a failure to utilise as much of the proceeds as was required in order to secure for prospective pensioners the pensions to which they were entitled, as beneficiaries of the scheme. In authorising this step to be taken by the scheme provider, the directors/trustees failed in their duties to scheme members and acted in breach of trust. The fact that, in their capacity as directors, the individuals in question may have had grounds for making the decision in question, which was a lawful step under the rules of the scheme, did not exculpate them from their liability as trustees to act in the interest of members and not the employer.
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