APT·TRUST-LAW · Module 1: Trust Law and the Role of the Trustee·UnitTRUST-LAW · Unit 02Access: Premium
Unit 1.2: Appointment, Composition and Removal of Trustees
Unit 1.2 deals with who sits on a trustee board and how they get there. It covers what fitness and properness means for someone acting as a pension trustee, the process by which a trustee takes office and what needs to be in place from the first day, the ways a trustee ceases to hold office through resignation, removal or disqualification, and how a board organises itself through its chair, its committees and its meeting cycle. Member-nominated trustee requirements and the use of a corporate trustee both appear here, and both return in Module 5 when the same ground is looked at through the scheme documentation.
What’s in it.
4 topics- Topic 01
Fitness and Properness to Act as a Trustee
45 questions - Topic 02
Trustees Taking Office
45 questions - Topic 03
Trustees Ceasing to Hold Office
45 questions - Topic 04
The Organisation of Trustees
Coming soon
Sample questions
3 of manyA few questions from this unit, with the answer and a full explanation. The complete bank is available when you start practising.
What form must a trustee's retirement generally take under the statutory mechanism in the Trustee Act 1925?
- It must be effected by deedCorrect answer
- It must be recorded only in the minutes of a trustee meeting
- It must be approved in writing by The Pensions Regulator
- It must be published in a local newspaper
ExplanationThe Trustee Act 1925 requires a trustee's retirement, and the consents that accompany it, to be given effect by deed. Oral notice, meeting minutes alone, an email, or newspaper publication do not satisfy this formality, and The Pensions Regulator has no approval role in the mechanism itself. Key takeaway: a deed is the required legal form, not just any written or recorded confirmation.
A scheme's trust deed gives the principal employer a general power to remove trustees. The employer wants to remove a member-nominated trustee following a disagreement over funding strategy, with no misconduct alleged. A candidate is asked why this situation is treated more cautiously in principle than removing an employer-nominated trustee in the same circumstances, without reference to any specific procedural sub-clause. What is the best general answer?
- Because the trust deed's general removal power is legally invalid wherever it applies to any trustee at all
- Because employer-nominated trustees can, in general, be removed only by a court order, unlike member-nominated trustees
- Because member-nominated trustees are, in general, more experienced than employer-nominated trustees
- Because a member-nominated trustee's role reflects a distinct nomination and selection process representing the membership, the law provides an additional safeguard so that role cannot simply be removed at the employer's unilateral discretionCorrect answer
ExplanationThe additional safeguard for member-nominated trustee removal exists to protect the independence of the member representation channel from being undermined by the employer simply removing an inconvenient trustee, not because of any assumed difference in experience, an automatic regulator role, or a disqualifying event arising from disagreement. Key takeaway: the underlying purpose, protecting member representation, is what candidates need to understand, not a specific procedural sub-clause.
Does automatic disqualification of a trustee require a decision by the trustee board, the employer, or The Pensions Regulator?
- Yes, but only where the disqualifying event relates to bankruptcy specifically
- No, automatic disqualification takes effect by operation of law with no decision required from any of themCorrect answer
- Yes, it requires a decision by the trustee board
- Yes, it requires a decision by the sponsoring employer
ExplanationAutomatic disqualification under the Pensions Act 1995 operates by law as soon as a specified event occurs, with no decision needed from the trustee board, the employer, or The Pensions Regulator, and this applies to any of the statutory disqualifying events, not just bankruptcy. Key takeaway: nothing needs to happen procedurally for automatic disqualification to take legal effect.