A number of members have asked about the role of trustees and this is an excerpt from the Pension Authority guidelines.
DC Code – Conflicts of interest.
Trustees should be able to demonstrate that they effectively manage conflicts of interest. The trustee’s duty first and foremost is to act in the best interests of their members and beneficiaries. While conflicts of interest may emerge in their stewardship of the scheme, it is important that these are properly managed and monitored so that trustees can explain how they handle conflicts, with a focus on how these could influence decisions about how the scheme is run. Trustees therefore should have documented processes and procedures in place to manage their conflicts.
Conflicts can occur where there are trustees who are directors of either a corporate trustee or of their employer when they might have an interest that conflicts with the interests of the scheme.
Conflicts can also arise where a trustee has a perception that they are representing the interests of a particular faction or group rather than the interests of the membership as a whole.
Whatever is the trustee’s background, their duty is always to serve all of the members’ best interests.
Trustee duties and responsibilities – general principles (Chapter 2)
6. It is very important that trustees act in the best interests of beneficiaries. In this context the phrase “best interests” is usually taken to mean best financial interests (par. 2.9).
7. Persons acting in their capacity as trustees should be aware that they are not to act as a representative of the group or interest from which they are drawn, but must serve all classes of beneficiary impartially (par. 2.9).
8. Acting prudently in the context of trusteeship means that trustees should take the same care as ordinary prudent persons would take in managing the affairs of other people for whom they feel morally bound to provide (par. 2.9).
9. Trustees should seek and obtain advice on technical matters and any other matters which they do not understand (par. 2.9).
10. Trustees should maintain confidentially any information which they have acquired in their capacity as trustees and should not disclose any matters relating to the business and affairs of the employers and members of which they become aware by reason of their position as trustees. Trustees should also bear in mind that information they receive which includes details of the personal, family or financial circumstances of individuals or groups of scheme members and/or their dependants is available to them only to enable them perform their duties as trustees effectively (par. 2.9).
11. Trustees who acquire confidential information should not use it for any purpose other than the purposes of the scheme. Trustees should also ensure that any commercially sensitive information they gain about the employer, and those providing services to them, is also only used in connection with the proper administration of the scheme. A trustee will generally have a fiduciary duty to disclose information received in another capacity to his fellow trustees, if it is necessary to enable them to perform their duties as trustees effectively. Should trustees have any doubt regarding their disclosure obligations in such circumstances, they should seek appropriate legal advice (par. 2.9).
12. Trustees should ensure that sensitive information is held securely with levels of access appropriately limited to avoid misuse. Trustees should also establish a policy identifying what aspect of trustee business may be disclosed (freely or on confidential terms) and to whom. Such a policy will ensure uniformity in approach (par. 2.9). 13. Many individuals appointed as trustees could be in a position where there may be a conflict between their duty as a trustee and their other interests. Their duty as a trustee must prevail when taking decisions. A trustee cannot act with a conflict so great so as to overwhelm his or her decision making ability.
https://www.pensionsauthority.ie/en/Trustees_Registered_Administrators/180928_Trustee_Handbook_1.pdf
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