Power & Duties

Pension Trustees

The law of trusts as modified by statute and by the terms of the pension deed applies to pension trustees. The scheme members are the beneficiaries of a trust.  Their benefits are defined by the trust deed and rules.  The duties of trustees are set out in the pension trust deed or other instrument. Common law, equitable and statutory principles and provisions supplement or modify those rules.

The general common law and equitable duties of a trustee are applicable to pension trustees.  They are restated in statutory form in the Pensions Act.  Member appointed trustees and employer-appointed trustees each owe much the same duties.

Other Pension Act and Revenue requirements also create duties and obligations. In particular, the scheme must be approved by Revenue and its requirement must be complied with on an ongoing basis, in order to preserve the favourable taxation status.

Basic Duties

The basic functions and duties of the trustees are confirmed by the Pensions Act to include,

  • to ensure that contributions due by employees and employers are received and invested in the requisite periods prescribed;
  • to provide for and undertake proper investment of the scheme assets in accordance with its rules;
  • to preserve preserved benefits;
  • to make arrangements for the provision and payments of pensions and benefits under the scheme;
  • to comply with the funding requirements for defined benefit schemes;
  • to disclose information to members and other  in accordance with the statutory rules
  • to keep records and accounts;
  • to prepare an annual report and arrange audited accounts;
  • to register the scheme with the Pensions Authority
  • to provide a dispute resolution mechanism
  • to furnish or disclose information to the Authority where required by law or by directions.

​Basic Governance Duties

Trustees must act collectively.  They should act through a meeting.  The general principles of meetings apply. They should convene the meetings giving notice to the trustee.  An agenda should be circulated.  Minutes should be kept. Trustees may be required to act unanimously.  The trust deed may empower them to act by a majority decision.

There is generally, a chairperson of the trustees.  Under the statutory  standard arrangement, where applicable, he or she is chosen by the employer nominated trustees and member trustees at a meeting.  If the vote on the election of a chairman is tied, the employer can select a chairman.  In the event of a tied vote, the chairman has a casting vote.  If a member trustee resigns or dies, a new member trustee is appointed for the unexpired term.

The trustees must familiarise themselves with the trust documentation.  They must act in accordance with the pension trust and the rules.  The trustee’s powers will be set out in the trust deed.  Some powers are in the nature of duties.  Others involve an element of discretion.

Accounting and Information

Trustees should keep accounts and where appropriate have them audited.  They should disclose the requisite information, including accounts and other information to members.  An annual report should be prepared and made available.

The basic trust duties to account for assets and to disclose information to the scheme members are supplemented by extensive Pensions legislation and Revenue requirements in relation to reports and the disclosure of information. Trustees must cause audited accounts, reports, actuarial valuations and annual reports to be prepared and made available to members on a regular basis. The accounts must be audited and published to members. The assets of the scheme must be valued by the scheme actuary at certain intervals.

The disclosure regulations requirements are much more detailed and prescriptive than trust law. The rights can be asserted much more easily. Members of an occupational scheme are entitled to information in relation to its terms.  Trustees must provide specific information at certain points in time, including upon a member joining a scheme, leaving a scheme, dying, or when the scheme is terminated.

Fiduciary Duties

Trustees owe strict fiduciary duties. They are held to a high standard of responsibltiy because of their position of control over the pensions assets. The trustees must act in good faith, taking into account relevant factors and not taking into account proper consideration.  They must not act for an improper motive.

The trustees must act exclusively in the best interest of the members as a whole.   They must act honestly and in good faith. They may not benefit from their position.  They must not act for an improper motive.They must account for any benefits receiver in breach of trust.

Trustees must avoid a conflict of interest.  They may not take undertake transactions and investments with themselves in a private capacity. They must maintain the confidentiality of information.  The trustees’ duties are relevant to the exercise of discretionary powers. A trustee may have a conflict as employer or member.

Where a trustee is conflicted, he should not act or should obtain a court order in relation to the proper course to be taken in the matter.  It is arguable that this general principle may be overridden by an enabling power in the deed.  It may arise from other circumstances in particular.

Duties of Care

The trustees owe duties of care to the pension beneficiaries. They may be liable for damages in a claim for negligence, if the breach of their duty of care causes finaincal loss to the pensions beneficiary. Professional trustees have a higher level of responsibility than non-professional trustees.

The duty is higher than a duty to act as one would act in relation to one’s own assets.  The fact that assets are invested for the benefit of others imports a greater degree of prudence. The duty is to take the care in investing, which a prudent man would take if he was investing for the benefit of persons for whom he is morally bound to provide.

The Courts have long recognised that the benefit of the pension is part of the consideration for the employment services.  Accordingly, pension beneficiaries are not treated as receiving gifts or as so-called volunteers.  This is an important principle in the interpretation of the pension provisions and the trustees’ duties.


Pension scheme trustees are obliged to undertake training.  This requirement applies to the trustees of occupational pension schemes.  In the case of corporate trustees, the requirements apply to the underlying controllers. Trustees were obliged to complete the statutory training by February 2012.  Retraining obligations apply every two years.

Trustees are required to receive training within six months of their appointment and at least every two years thereafter. The training undertaken must cover the Pensions Act and regulations, duties and responsibilities of trustees both under the Act and at common law and effective management of a scheme or trust RAC (see document ‘Areas to be covered by trustee training’ below). For further information on the trustee training requirements see ‘Trustee Training Requirements’ under ‘FAQs’.

The Authority supports appropriate trustee training in the following ways:

  • an e-learning facility for trustees is available free of charge and can be accessed at http://trusteetraining.pensionsauthority.ie/
  • a list of registered trainers for trustees of occupational pension schemes is available.

The application form to be a registered trainer for trustees of occupational pension schemes is available under the ‘Application forms’ section.

Trustee education

Irish Institute of Pensions Management (IIPM)

The Irish Institute of Pensions Management (IIPM) offers a Law and Governance Programme for Trustees, which focuses on the building blocks for implementing good scheme governance and risk management. The Programme is accredited on the National Framework of Qualifications. Further details are available at this link http://www.iipm.ie/page.php?id=107&title=IIPM

Life Insurance Association (LIA)

LIA has developed a course for those acting (or wanting to act) as a Trustee of a defined contribution occupational pension scheme or Trust RACs, or as a director of a company acting as a Pensioneer or Professional Trustee of such arrangements. The Professional Certificate in DC Pension Scheme Trusteeship is a two-module, distance learning course and leads to the new LIA designation Pension Trustee Practitioner, or, PTP for short. Further details are available at this link https://www.lia.ie/course/professional-certificate-dc-pension.

Reasons for Decisions

Where there is evidence that the trustees have acted in bad faith, disclosure may be ordered.  Courts have inherent powers to restrain a breach of trust.  Trustees do not have a general obligation to give reasons for their decision beyond the duties of disclosure set out in the Pensions Act.  They may make an order of disclosure.

Where a discretion has not been exercised and where the trustees have breached their duties, the Court may review the exercise of power.  The Court will not substitute its own decision.  It will intervene if the trustees have

  • exceeded their powers;
  • have acted in bad faith;
  • have not acted in good faith;
  • have taken into account irrelevant considerations or
  • failed to take into account relevant considerations.

The Court will not intervene provided that the trustees act in the exercise of discretionary powers in good faith within the above parameters.

Breach and Liability

Where trustees have breached trust, they may be personally liable.  Proprietary remedies may be exercised to recoup assets wrongfully disposed of.  Trustees are obliged to account for any profits or trust assets.

Pension deeds may provide clauses which relieve trustees from liability, other than those arising from fraud or gross negligence or wilful default. The clauses will be interpreted against the interests of the trustee.  Any exemption from liability must clearly apply in order for effectively giving to it.

The terms of the indemnity to trustees in a trust deed may be a relatively wide. They may excuse everything short of fraud in some cases.  In other cases, they may not exonerate the trustee where he has been negligent.   A professional trustee is not usually relieved from negligence.

The default position at law is that the trustee is entitled to an indemnity out of the trust assets in respect of expenses properly incurred.  He is not entitled to an indemnity in respect of matters which are a breach of trust or for his personal liability. Generally, the indemnity is provided by the employer, and there is no right against the trust assets unless this indemnity fails.

The Trustees Act provides that a trustee is chargeable only for money and assets actually received by him, notwithstanding the signing a receipt for conformity.  He is not usually liable for the failures or negligence of his fellow trustees in themselves, in the absence of wilful default

Insurance cover may be available to trustees in respect of breach of duty.  The cost may be paid by the employer or the scheme.  A trust power would be required, if the insurance is paid for by the scheme funds.

Investment Duties

Pension trustees are generally granted specific powers of investment.  The pension deed may provide for the classes of assets, in which investment may be made.

Historically, the common law and the fiduciary duties of trustees were all that applied to ensure that appropriate investments were made, in order to meet the long-term and short-term liabilities and obligations of the pension scheme.

Pensions legislation has introduced specific requirements in relation to the investment of pension scheme assets. European Union legislation has provided detailed and comprehensive obligations in relation to pension investments.  In particular, certain types of investment are prohibited, at least for most classes of scheme.

Investment Duties as Trustess

Trustees have common law and statutory duties in relation to the investment of the pension fund. The pensions legislation requires that the trustees of a pension scheme invest the scheme assets properly.  There are specific statutory duties to ensure that contributions, both by employee and employer, are received and invested.  They must be invested within 10 days.  This is in addition to the general common law duties of care and fiduciary duties of trustees.

The principal duty of trustees is to invest prudently and cautiously.  Hazardous investments are to be avoided. The default statutory trust powers require investment in a limited category of liquid and presumptively safe assets. The financial crisis has shown that assets which had been believed to be of the highest grades (such as government bonds) are vulnerable to insolvency risks, which may affect their price.

Although trustees owe a duty of care, supplemented by a statutory duty, they are likely to be allowed to make investment mistakes, provided that they act in good faith within their powers.

Professional trustees and investors, managers will be subject to a higher duty of care.  In this case, the required level of skill is that of an equivalent professional trustee or investment advisor.

Trust powers in pension trusts invariably allow trustees a greater discretion, than the default statutory trustee powers.  This does not limit their duty of care.  Trustees must act as an ordinary prudent person would act in making investments for the benefit of other persons for whom he is morally bound to provide.

Investment Powers I

The rules of the pension scheme may define the permitted investments.  Investments made must be (as all other actions taken by the trustees) within the terms of the investment power in the pension scheme deed.  There may be limitations and parameters which may be relevant.  Generally, trustee powers will be in wide terms.

Trustees must ensure that each investment is within the powers of the trust and is properly made. Investment in breach of trust would be void and, may be set aside.  Trustees are liable to the beneficiaries for breach of trust or breach of their duties of care.

The investment power is usually drafted in broad terms. It may be possible to amend the investment powers if they are too narrow.

Investment Powers II

Direct investment may be authorised. Investment may be required to take place through funds and intermediaries, such as life insurance companies.

Trustees may be empowered to borrow.  Since the implementation of the IORPS Directive, borrowing is permissible only for limited purposes of liquidity, in cases other than single member schemes.

Key investment decisions may require the consent of the employer.  The employer may be entitled to consent to or to veto particular important decisions.  This is seen as a matter of legitimate concern for the employer, where they are the principal scheme funders.


The trustees of a pension scheme must appoint a registered administrator to provide certain administration services.  This includes the preparation of annual reports, annual benefit statements and the maintenance of scheme records. Pension administrators and trustees who provide these services must register with the Pensions Board.  The details of the functions which they provide must be registered.

Every occupational pension scheme and trust-based retirement annuity scheme (other than small schemes, as defined), to appoint one or more registered administrators. The administrators may be the pension scheme trustees themselves or others who provide the core administration services for the scheme.

The trustees of schemes or trust RACs (other than a small trust RAC) have an obligation to ensure that at all times a registered administrator is appointed to perform the relevant duties unless they are registered as the provider. The trustees may themselves apply to the Authority to be appointed as the registered administrator for a scheme or trust RAC, provided that they meet the statutory requirements.

The registered administrator is responsible for keeping accurate and sufficient records of members and their entitlements. It must prepare the annual report and the annual benefit statement on behalf of the trustees of the scheme. It must undertake such other duties as the Minister may from time to time prescribe in regulations.

A service or product shall not be marketed is such a way as to make the purchase of that service or product dependent on the purchase of the services of a particular registered administrator or vice-versa.

Investment Manager and Custodian

Trustees must generally appoint or use appropriate investment advisers in accordance with their common law and statutory duties of care.  Although the trustees may not delegate their obligations, they may, and prudence will often usually, require that they should delegate day to day investment decisions to investment managers, subject to their general direction and instructions.

It is usually appropriate and necessary to place investment decisions in the hands of a professional advisor such as placing the funds with a life assurance company or retaining an investment manager. Prudence and care will be required in the appointment of professional investors and in the outsourcing of investment decisions. Many schemes, particularly those which are smaller and medium in scale will undertake most investment functions through life insurance companies.

An investment manager may be appointed to deal with the investments of a pension scheme.  There should be a written appointment incorporating the terms of the agreement.    The investment objectives should be set out.  The level of discretion afforded to the investment manager should be provided.

Other Service Providers /  Advisers

Pension assets should be, held in the name of a custodian or nominee. Custodians hold pension assets separate from the trustees and the investment managers.  Custodians act as guardians to ensure that the rules of the trust are followed. This acts as an important control.  A regulated custodian should be appointed.

There are various pieces of financial services legislation and rules which are designed to protect investors.  Life insurance companies are highly regulated.  Their funds are segregated and are not available to their creditors or for use for other classes of insurance business.

Pension funds may invest in life-assurance-linked funds or unit-linked funds established by investment managers.  Life assurance companies, fund providers, intermediaries and brokers are regulated in relation to their financial stability and conduct of business.

References and Sources

Irish Books

Irish Pensions Law & Practice Buggy, Finucane & Tighe      2nd Ed (2005)  Ch.10

Pensions; Revenue Law and Practice (ITI) Dolan, Murray, Reynolds, McLoughlin (2013)

Trustee Handbook the Pensions Authority 5th Ed 2016

Statutory Guidance the Pensions Authority (Various)



UK Books

Pensions Law Handbook 12 Ed Nabarro Nathanson Bloomsbury

Corporate Insolvency 6e: Employment & Pension Rights (6th Revised edition)

Occupational Pensions (Subscription) Lexis Nexis

Pensions Law and Practice with Precedents (Subscription) Sweet & Maxwell

Sweet & Maxwell’s Law of Pension Schemes (Subscription)

The Guide for Pension Trustees World Economics Ltd

The Guide for Pension Trustees website, you can:

Tolley’s Pensions Law Looseleaf Service (Subscription)


Pensions Act, 1990

Pensions (Amendment) Act, 1996

Pensions (Amendment) Act, 2002

Pensions (Amendment) Act, 2006

Social Welfare and Pensions Act, 2005 (Part 3)

Social Welfare Reform and Pensions Act 2006

Social Welfare and Pensions Act 2007

Social Welfare and Pensions Act 2008

Social Welfare (Miscellaneous Provisions) Act 2008

Social Welfare and Pensions Act 2009

Social Welfare and Pensions (No. 2) Act 2009

Social Welfare (Miscellaneous Provisions) Act 2010

Social Welfare and Pensions Act 2010

Social Welfare and Pensions Act 2011

Social Welfare and Pensions Act 2012

Social Welfare and Pensions (Miscellaneous Provisions) Act 2013

Social Welfare and Pensions Act 2013

Social Welfare and Pensions (No. 2) Act 2013 49/2013

Social Welfare and Pensions Act 2014

Social Welfare and Pensions (No. 2) Act 2014 41/2014

Social Welfare (Miscellaneous Provisions) Act 2015 12/2015

Social Welfare and Pensions Act 2015 (Part 3)


Section 59:


Pensions Act (Disclosure Of Information) (Amendment) Regulations, 2007


Trust RACS (Disclosure Of Information) Regulations, 2007


Occupational Pension Schemes (Disclosure of Information) (Amendment) Regulations, 2006


Occupational Pension Schemes (Disclosure of Information) Regulations, 2006


Occupational Pension Schemes (Disclosure of Information) Regulations, 2005     Revoked

Section 59(1) and (1A)


The Occupational Pension Schemes (Investment) (Amendment) Regulations, 2010

Section 59(1), (1A) and (1C):


Occupational Pension Schemes (Investment) (Amendment) Regulations, 2007


Trust RACS (Investment) Regulations, 2007


Occupational Pensions Schemes (Investment) Regulations, 2006


Section 59A:


Trust RACS (Trustee) Regulations, 2007


Occupational Pension Schemes (Trustee) Regulations, 2006


Section 60:


Trust RACS (Registration) Regulations, 2007


Occupational Pension Schemes (Registration) Regulations, 1991


Section 61B:


Trust RACS (Investment) Regulations, 2007


Occupational Pensions Schemes (Investment) Regulations, 2006