Who runs occupational pension schemes?

Most public sector schemes were set up by Acts of Parliament. They are known as statutory schemes and have their own rules. We do not cover them here.

There are strict rules governing occupational pension schemes – whether they are salary related or money purchase.

Pension fund trustees

Pension schemes are not run directly by your employer. Instead they need to be run by a board of trustees and their finances kept entirely separate from the employer's finances. The trustees will usually be made up of a mix of senior managers and representatives of scheme members. Trustees have specific legal duties – management trustees should not simply act in the interests of the firm and member trustees cannot simply be delegates from the workforce. 

The trustees (except in some very big schemes) hand over the day-to-day responsibility of running the scheme to a fund management or other finance company.

There are many legal requirements on pension funds and their trustees. They must obey the many rules set by the Inland Revenue, and need to ensure they have enough funds to meet their current and future commitments.

Not all schemes offered by employers – stakeholder and Group Personal Pensions for example – are occupational schemes in the legal sense. These do not therefore need to be run by trustees (though stakeholder schemes can be).