Pension Trustee Liability Insurance (PTL)
Pension trustee liability is required to protect the personal assets of individuals that accept trustee positions
Compare pension trustee insurance
Compare pension trustee liability insurance that covers the maladministration of company pension schemes
At get indemnity™ pension trustee liability insurance starts at £750 per million of cover. Below we explain how pension trustee liability works and how it can protect against specific liabilities.
What is pension trustee liability insurance?
The business insurance will pay legal costs incurred in defending allegations and damages arising from any judgment, award or settlement.
Who needs pension trustee liability insurance?
The law will generally seek to protect individual trustees from personal liability where they have acted in good faith and complied with their obligations.
Taking on the role of a trustee is an important responsibility and should not be taken lightly. There are a number of resources available offering guidance:
Why purchase pension trustee liability insurance?
Regulation affecting the running of pension schemes has placed increased scrutiny on those who sponsor and manage pension schemes. The Pension Ombudsmen accepted 1,676 complaints for investigation in 2017/18; an increase of 26% when compared with 2016/17.
The above chart shows the underlying trend of new Pension Ombudsmen investigations over a period of five years – with groups removed.
The above chart shows the subject matter of new investigations brought in 2018.
How can PTL insurance claims or investigations arise?
|
Breach of trust |
Breach of duty |
Breach of law |
|
Maladministration |
Neglect |
Errors |
|
Misstatements |
Misleading statements |
Omissions |
What does pension trustee liability cover?
> Liability / Damages
> Defence Costs
> Pension Overpayments
> Investigations Costs
> Fines and Penalties
> Additional Trustee Costs
What if the sponsoring employer provides indemnification?
- the ability for the sponsoring employer to provide indemnification (for example, the company enters into administration); and
- the trust deed cannot provide protection against claims from third parties or regulatory proceedings.
Who is covered under pension trustee liability insurance?
Including their respective lawful spouse, estate, heirs, if named as co-defendant, in circumstances allegations are made against a person who is deceased, insolvent, or bankrupt.
Pension trustee liability insurance will also extend to:
> the pension schemes,
> the sponsoring employer; and
> any corporate trustees.
How do insurers underwrite your PTL insurance?
The size, type and funding levels of your pension schemes will have a direct impact on how your pension trustee liability insurance premium is calculated.
Underwriters will typically review your latest reported financial statements from Companies House to consider any negative trends and likelihood of failure.
How to compare pension trustee liability cover?
In recent years, there has been significant premium reductions available as a result of a stable claims environment and increasing competition between insurers.
To obtain the most competitive quotes we recommend you submit copies of the following with your application:
> Schedule of the pension schemes that require cover
> Latest report and accounts for each pension scheme
> Latest actuarial report for each pension scheme
Do we require cyber pension insurance?
The consequences of a cyber security breach for a pension scheme and its members could be significant. Pension trustees should familiarise themselves with the regulators guidance and ensure they meet the regulators expectations.
This guide is for information purposes and based on sources which we believe are reliable, the general risk management and insurance information is not intended to be taken as advice with respect to any individual circumstance and cannot be relied upon as such.