PSI1.1.19 - Establishment and Administration of Retirement Benefits Schemes: Retirement Benefits Schemes - Common Trust Funds

(This archived guidance relates to HMRC discretionary practice before the 6th April 2006. For current guidance on Registered Pension Schemes see the Registered Pension Schemes Manual)

A common trust fund is the most complex form of scheme commonly found. In contrast to an earmarked scheme, all its assets are pooled in a central fund or policy from which the members' benefits are paid as they arise. The feature which usually distinguishes the documentation of a common trust fund from an earmarked scheme is the wide power of investment given to the trustees. Self-administered schemes, including small self-administered schemes, must be established as common trust funds. Most of the larger insured schemes are also set up on this basis but not necessarily with wide powers of investment