The duties of pension fund trustees: fiduciary standards under scrutiny
Trustees hold fund assets for members, not employers. Recent determinations underline the personal consequences of failing to observe that principle.
We advise pension funds, trustees, employers and members on matters arising under the Pension Funds Act. The regulatory environment has tightened considerably, and the Pension Funds Adjudicator and the Financial Services Tribunal have shown an increasing willingness to scrutinise trustee conduct.
The core duties
- To act with care, diligence and good faith in terms of section 7C of the Pension Funds Act;
- To avoid conflicts of interest, and to declare and manage those that cannot be avoided;
- To ensure that contributions are collected and invested in accordance with the fund’s investment policy statement; and
- To communicate adequately with members, particularly on fund expenses and benefit changes.
Employer withdrawal and section 14 transfers
Transfers of business frequently carry pension consequences that are addressed too late in the transaction. A section 14 transfer requires actuarial certification and regulatory approval, and the employment law consequences of changing retirement fund arrangements must be managed alongside the transfer itself.
Our directors hold specialist pension law qualifications and have appeared before the Financial Services Tribunal on FAIS and financial sector related matters.
This article is general commentary on developments in the law. It does not constitute legal advice, and no attorney-client relationship arises from it. Please contact us if you require advice on a particular matter.