Is my money protected?

Occupational pension schemes in the private sector are set up under trust law. The trustees must run the scheme in the interests of the members and in line with:

• trust law;
• the trust deed (a legal document) and rules; and
• specific laws about pensions.

Although your employer pays into the scheme and may be a trustee, the assets of the pension scheme belong to the scheme, not to your employer. As a scheme member, you are protected by a number of laws designed to make sure schemes are run properly and to make sure funds are used properly.

In particular, there are laws about:

• the way occupational pension schemes must be run;
• the information you must be given;
• people who are not eligible to be trustees (for example, anyone convicted of dishonesty or deception);
• some of the trustees being nominated by the members;
• who the trustees should be (including member-nominated trustees);
• the way funds should be invested;
• the records that the scheme provider must keep; and
• who is authorised to manage pension investments.

Every scheme must provide an annual report, a copy of which you, as a scheme member, can ask for.

All money purchase schemes and most salary-related schemes automatically provide their members with a pension statement every year. If this does not happen, salary related scheme members can ask for one.

The Occupational Pensions Regulatory Authority (OPRA) is responsible for regulating occupational pension schemes. Opra can act quickly to protect your interests if the trustees who run your scheme, or your employers, do not meet their obligations. Scheme auditors and actuaries must tell Opra if the law has been broken, but anyone else can also contact them if they think the scheme is being run in the wrong way. Opra can place restrictions on trustees or even disqualify them. Opra can also fine people who are found to have broken the pension laws. A few serious matters are criminal offences and Opra can take court action. Click here for details about how to contact Opra.

Some of the biggest pension schemes, particularly in the public sector, are set up by Acts of Parliament and so don’t have a trustee structure. They often don’t have pension funds. Instead, the employer pays pensions as they go along.