Pension Trustees

Pat38493

I have read in various places that all pensions have to be held in trust.

If you are a DIY pension holder with one of the DIY providers, who exactly are the trustees and how do they avoid conflicts of interest with the provider's profit motive?

xylophone

I have read in various places that all pensions have to be held in trust.

See

https://www.mandg.com/pru/adviser/en-gb/insights-events/insights-library/legal-structure

Pat38493

Thanks I might have misunderstood - I thought that pensions had to be held in trust in order to get the tax relief but it seems they can be "contract based".  It seems like the contract based ones are still held in trust as some kind of paper exercise in order to avoid IHT on death benefits, but the trustees perhaps can just be the directors of the pension provider?  At least that's how I am reading it.

Albermarle

xylophone said:

I have read in various places that all pensions have to be held in trust.

See

https://www.mandg.com/pru/adviser/en-gb/insights-events/insights-library/legal-structure

Interesting link.
 I assume then with a contract based scheme with an investment platform, the provider has some kind of expert manager in place to deal with any beneficiary issues, in the same way that Trustees would do ?

xylophone

 I assume then with a contract based scheme with an investment platform, the provider has some kind of expert manager in place to deal with any beneficiary issues, in the same way that Trustees would do ?

https://techzone.abrdn.com/public/pensions/Tech-guide-pensions-IHT

Marcon

Pat38493 said:

Thanks I might have misunderstood - I thought that pensions had to be held in trust in order to get the tax relief but it seems they can be "contract based".  It seems like the contract based ones are still held in trust as some kind of paper exercise in order to avoid IHT on death benefits, but the trustees perhaps can just be the directors of the pension provider?  At least that's how I am reading it.

Statutory schemes aren't trust based or contract based; as their name suggests, they are statute based. 

Some have managers, who can exercise (very limited) discretions in relation to payment of death lump sums, and it is the discretionary nature of the decision which avoids IHT. 

Others have binding nomination forms rather than Expression of Wish forms which, by a quirk beloved of our ridiculously erratic pension system, still avoid IHT...just don't try it with a private sector scheme!