Should employers think twice before taking on the role of trustee? (Sponsored)

Aug 15, 2019

Quite often, directors of a company will unintentionally find themselves in the role of a pension scheme trustee. As settlor, the company has an interest in the success of the scheme. As trustee, the employer is obliged to discharge their duties imposed under equity and legislation, and also run the scheme in accordance with the trust deed and rules and in the best interest of its members. Having the employer as trustee has both advantages and disadvantages.

Time and cost

It is a quick and easy decision to have the employer as trustee, and it eliminates the fees associated with a professional. However, there is a significant time/cost involved for each director, which includes regular trustee meetings and ongoing trustee training. The onus is on the employer to remain up-to-date with changing pension regulations.

Conflict of interest

Having the employer as trustee may, at times, give rise to conflicts of interest. Funding issues (increased employer contribution), deciding to wind-up or cease the payment of benefits are all areas where conflict could potentially arise. There may be times when the employer finds it challenging to act impartially if the resulting decision means additional cost for the employer.


A critical trustee task is to ensure that contributions are passed over to the investment company within the 21-day rule. With the employer as trustee, this removes a layer of protection for the members as the employer will mainly only be accountable to itself should the time constraints not be met.

So, is there another solution?

An option an employer should consider is outsourcing the trusteeship of the scheme to an expert like Zurich Trustee Services Limited (ZTSL). ZTSL is a professional corporate trustee company with a wealth of knowledge and experience in trusteeship and pensions generally. Appointing ZTSL as trustee offers the following benefits:

  • ZTSL has the knowledge, experience and expertise to carry out the role of trustee effectively.
  • ZTSL carries the responsibility for ensuring the scheme’s compliance with all legislative requirements and that a high-level of governance is maintained.
  • ZTSL manages the relationships of the scheme with the Pensions Authority, the Revenue Commissioners, and the Financial Services and Pensions Ombudsman.
  • ZTSL has a vast amount of investment knowledge and will engage with members regarding their investment options and decisions.

Employers who outsource trusteeship to an expert like ZTSL can have peace of mind that their scheme is being taken care of and can, instead, focus on running and managing their business.

This article is sponsored by Zurich Life.