(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)
[PN2.5]
A settlor (i.e. the person setting up a trust) may generally
appoint any individual to be a trustee or may appoint a trustee
company or some other body. With pension schemes the employer, or
the directors or partners, are often the trustee(s) and there is no
objection to this. But where the director is a scheme member as
well as a trustee the basic concept of alienation is clearly
weakened and conflicts of interest can arise. This generally causes
no problems in regard to large self-administered schemes because
scheme membership is broadly based. Nor are insured schemes a
problem because the scheme funds are tied up in insurance policies.
It is however one of the reasons why we have extra requirements for
small self-administered schemes.
