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
33 questions - Topic 03
Trustees Ceasing to Hold Office
35 questions - Topic 04
The Organisation of Trustees
36 questions
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.
A market analyst observes that sole trustee arrangements have grown particularly quickly in large-scale DC consolidation and master trust structures, more so than in small legacy DB arrangements. What structural feature of DC consolidation and master trust schemes most plausibly explains this trend?
- Their scale and standardised governance needs suit a specialist sole trustee, unlike small legacy DB schemesCorrect answer
- The trend reflects a temporary rule that will automatically reverse once master trust authorisation numbers stabilise
- DC consolidation and master trust schemes have no member-nominated trustee requirement at all, unlike DB schemes
- DC consolidation and master trust schemes are legally required to use a sole trustee, unlike DB arrangements
ExplanationThe plausible explanation lies in the scale and standardised governance demands of DC consolidation and master trust structures, which suit a specialist professional sole trustee, rather than any legal requirement or prohibition tied to scheme type, a purely cost-driven explanation, an absence of member-nomination requirements, or a temporary rule. Key takeaway: the trend reflects practical governance fit, not a legal mandate confined to one scheme type.
What form must a trustee's retirement generally take under the statutory mechanism in the Trustee Act 1925?
- It must be effected by a formal deed of retirementCorrect 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.
Why does a member-nominated trustee benefit from additional procedural protection against removal?
- Because member-nominated trustees are legally presumed to be more competent than other trustees
- To protect the independence of the member representation channel from unilateral removal by the employerCorrect answer
- Because member-nominated trustees are automatically also directors of any corporate trustee
- Because member-nominated trustees are personally liable for a shorter period than other trustees
ExplanationThe additional safeguard exists so that the employer cannot use a general removal power to simply remove a member-nominated trustee it finds inconvenient, protecting the independence of the member representation the one-third requirement is designed to secure. It has nothing to do with presumed competence, liability duration, exemption from disqualification, or automatic corporate trustee directorships. Key takeaway: the safeguard protects the purpose of member-nomination, not the individual trustee's personal status.