Pension Trustee Liability

Why do you need it

Similar to D&O’s, Pension Trustees are personally liable should a claim be made against them alleging a wrongful act.

Generally, these individuals are volunteers and are unaware of the risks they face. Trustees are the legal owners of the pension scheme assets and they have to act:

  • In line with the pension scheme trust deed and rules
  • In the best interests of the pension scheme members
  • Impartially, prudently, responsibly and honestly

See our article here on the role of a Pension Trustee.

The Pensions Regulator can take action against trustees who commit breaches of trust or against those who have breached pension law. Recently, the conversion from defined benefit schemes to defined contribution schemes has also continued. This has generally meant potentially lower benefits under new schemes which has also given rise to closer scrutiny from members and trade unions with more issues arising for trustees to deal with as a result.

What is covered

We cover the defence costs of any action brought, as well as awards, damages and investigation costs.

  • Broad Pension Wrongful Acts definition
  • Coverage for Exonerated Losses
  • Loss incurred by a Trustee in the event of a Contribution Notice being issued against them

A trustee’s personal exposure does not cease when they retire and their post retirement situation may make them particularly vulnerable. The solution is for retired trustees to have the guarantee of cover in the event that the scheme ceases to be insured. They can then rest assured that they have cover personal to them, irrespective of what the employer or trustees have done, or not done, about insurance since they retired.

PTL insurance is provided on a claims-made basis. This means that claims are only covered if they are made while the policy is in effect or within a contractually agreed extended reporting period, irrespective of when the event giving rise to the claim occurred.

What we do

Similar to the approach we have taken on our D&O wording, our Pension Trustees' Liability policy provides ground up coverage with no compulsory deductible.

Limits & Policy

Limits available up to GBP 10,000,000
Any One Claim (AOC) language as standard
Access to a dedicated legal helpline to assist with legal issues

Generous Additional Policy Benefits, including:

  • Cover for newly created/acquired plans
  • Loss of documents sub-limit
  • Ongoing cover for a plans being wound up


Feel free to contact us or pick up the phone to see how Plus Risk can assist you and your clients.


Claims Examples

Mistaken offer of early retirement option

An employer was sued for £3,0000,000 by scheme participants for withdrawing an offer of an early retirement pension following Inland Revenue advise that it did not have the rights to make this offer.

Loan & Liquidation - Trustees personally liable after insolvency

Trustees loaned pension fund assets to the sponsoring employer who then went into liquidation and could not repay. They faced personal liability for the lost £5,000,000.

Error in Administration

A scheme member left her employers, at which point she became a deferred member of their pension scheme. The scheme trustees advised her to transfer her value in the scheme to an additional voluntary contribution fund. They said that this would ensure that her annual pension at normal retirement age would be higher. But it transpired that she should have stayed in the scheme as a deferred member. Some years later, she noticed the shortfall in her benefits. The same advise had also been provided to other scheme members. The trustees incurred defence costs and settlement payments exceeding £150,000