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Dim view of professional trustee relying on exoneration clause 1

United Kingdom
04/01/2007
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Reference: N00827

Prolonged delay in implementing an investment switch agreed in December 2000 led to it only being implemented just after the “9/11” attacks in 2001, by which time the assets of the scheme had shrunk by 35%. The Ombudsman found the statutory independent trustee, previously appointed on the employer's insolvency, to be guilty of maladministration for its part in the delay.



The Ombudsman held that the trustee was entitled to rely on the trust's exoneration clause, which excluded liability of any trustee save for “wilful default”. Nevertheless, the Ombudsman observed that "it does not seem to me to be acceptable for a trustee who is being paid for his professional services to avoid the consequences of maladministration when carrying out such work". Noting that the trustee was on the Pension Regulator's register of independent trustees, he said that he would be drawing the facts of the determination to the attention of the Regulator in order that it could “consider whether the trustee continued to satisfy conditions for registration".

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