Trustee indemnity insurance

Topic:

Hot topic

Date published:

Monday, 30 January 2017

Author:

Ian Eggleden

Are you a pension trustee or scheme sponsor? If so, just how much attention do you pay to trustee indemnity insurance?

I know the trustee boards of some ongoing pension schemes do consider carefully whether trustee indemnity insurance represents value for money. I suspect others may only give it cursory thought once a year when it appears on a trustee meeting agenda - and then only to make sure their scheme secretary says they are covered. Assessing the costs and benefits of this insurance given other protections that are available (for example by the employer via the pension scheme rules) is a sensible exercise for ongoing schemes to carry out.

However, for defined benefit (DB) schemes that are being, or have been, wound up it is a different story. As a professional pension trustee, I know trustee indemnity insurance deserves close attention and have put together a few examples to show just how easy it is for a claim relating to pension benefits to arise.

With payouts up to £2.4million, these case studies really do bring home the financial consequences of an error or omission.

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