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Home / TRUST-LAW · Module 1: Trust Law and the Role of the Trustee
Mapped to all 92 assessment criteria in the published PMI Award in Pension Trusteeship syllabus, arranged here into 22 units and 91 topics.

APT·ModuleTRUST-LAW

Module 1: Trust Law and the Role of the Trustee

Module 1 covers the law a pension trustee works inside every day: what a trust is and how it is created, who the beneficiaries are, and how the trust deed and rules are operated and amended. It moves on to how trustees take and leave office, what fitness and properness means in practice, and how a trustee board organises itself. The largest part deals with fiduciary duties, taking and weighing professional advice, managing conflicts of interest, and the powers trustees hold alongside those held by the sponsoring employer. Unit 1.1, The Trust and Its Creation, is free to practise without a subscription. PMI publishes seven learning outcomes for the APT with no sub-grouping and no published weightings, so the five modules and twenty-two units on this site are our own arrangement of the published assessment criteria, gathered into one place for study purposes.

Questions
666
Units
4
Topics
18
Access
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What’s in it.

4 units

Sample questions

3 of many

A few questions from this module, with the answer and a full explanation. The complete bank is available when you start practising.

  1. A DB scheme's trustees need an assessment of the scheme's liabilities and a certified schedule of contributions. Which adviser provides this?

    • The investment consultant
    • The scheme actuary
      Correct answer
    • The scheme auditor
    • The covenant adviser
    Explanation

    Valuing DB liabilities and certifying the schedule of contributions is the scheme actuary's statutory function under Pensions Act 1995 s.47. The auditor checks the accounts, the investment consultant advises on strategy, the covenant adviser assesses employer strength, the legal adviser advises on the deed and rules, and the custodian safeguards assets, each a distinct function from the actuary's. Key takeaway: liability valuation and contribution certification sit with the actuary, not adjacent advisers.

  2. Why is a member's equitable interest distinct from the trustees' legal title?

    • Because members hold legal title, while trustees hold the equitable interest
    • Because equitable interest is a synonym for legal title in pensions law
    • Because the distinction only applies to DC schemes, not DB schemes
    • Trustees hold legal title; members hold the equitable interest entitling them to benefit
      Correct answer
    Explanation

    This is the fundamental legal/equitable split underlying all trusts: trustees hold legal title so they can administer the property, while beneficiaries, including scheme members, hold the equitable interest that entitles them to benefit from it, even though they hold no legal title themselves. Key takeaway: legal title (administration) and equitable interest (entitlement to benefit) are held by different parties in a trust.

  3. A trustee describes the power of amendment as 'whatever the trustees decide should change in the scheme', without reference to any specific document. Why is this description incomplete?

    • The description is incomplete only because amendment powers are created exclusively by statute, never by the deed
    • The description is complete and accurate, since the power of amendment exists independently of any trust deed provision
    • The description is incomplete only because it fails to mention the Pensions Regulator's role in approving every amendment
    • The description is incomplete: the power of amendment is defined by the trust deed provision, not the trustees' wishes
      Correct answer
    Explanation

    The power of amendment derives from, and is scoped by, the specific trust deed provision, not simply from trustees' general wishes or good faith intentions, and it is not created exclusively by statute or subject to a general regulator approval or member consent requirement for every change. Key takeaway: the deed provision defines who holds the power and what it can be used for, not the trustees' own view of what should change.

Frequently asked questions

4 questions
What are a pension trustee's fiduciary duties?

A trustee must act in the best interests of the scheme’s beneficiaries, act impartially between different classes of member, act in line with the trust deed and rules and with pensions law, take proper advice where they do not have the expertise themselves, and avoid putting themselves in a position where a personal interest conflicts with that duty.

How are member-nominated trustees appointed?

Occupational pension schemes must normally have arrangements under which at least one third of the trustee board is member-nominated. The scheme sets the nomination and selection process within the statutory requirements, and the same rule applies to member-nominated directors where the trustee is a company.

Can a pension trustee be removed?

Yes. The trust deed and rules usually set out how a trustee is appointed and removed, statute disqualifies certain people from acting, for example an undischarged bankrupt or someone convicted of an offence involving dishonesty or deception, and The Pensions Regulator holds powers to suspend, prohibit or remove a trustee.

Which part of Module 1 is free?

Unit 1.1, The Trust and Its Creation, is free to practise. It covers the basic concepts of a trust, how a trust is created, who the beneficiaries are, and operating under the trust deed and rules. You need an account so that your progress can be tracked, and you do not need to enter payment details.