[ ]
(the "Principal Employer")
- and -
[ ]
(the Trustee(s))
Trust Deed
- relating to -
[ ] Scheme
(the "Scheme")
commencement date: [ ]
SampleTrustDeed-May13-1
- 1 -
This Deed is made on2010
Between:
(1) [ ] Limited / PLC (registered number [] ) whose registered office is at [], the "Principal Employer"; [and]
EITHER
(2)[The Trustee(s) company] Limited (registered number [] ) whose registered office is at [] (the Trustee(s)").
OR
(2)[] of [ ], [ ] of [] and [] of [ ] (the "Trustee(s)s").
Recitals:
(A)The Principal Employer wishes to establish the Scheme for the purpose of providing death in service benefits covered by one or more life assurance policies for such present and future individuals as are notified by the Employers to the Trustee(s).
(B)The Scheme will be governed by the terms of this Deed as amended from time to time. The Scheme will be a registered pension scheme in accordance with the provisions of the Finance Act 2004.
(C)The persons identified above as the Trustee or Trustees, at the request of the Principal Employer, has or have agreed to become the first Trustee(s) of the Scheme.
Operative Provisions:
1.Interpretation
1.1In this Deed and its Schedule 1:
(a)save where the context otherwise requires, a reference to a statute or statutory provision shall include a reference:
(i)to that statute or provision as from time to time consolidated, modified, re enacted or replaced by any statute or statutory provision; and
(ii)any subordinate legislation made under the relevant statute;
(b)unless otherwise specified, references to Clauses are to clauses of this Deed;
(c)references to any of the masculine, the feminine and the neuter shall include the other genders;
(d)references to the singular shall include the plural, and vice versa; and
(e)the words "include", "includes" and "including" shall be construed as if they were followed by the words "without limitation".
1.2Certain terms used in this Deed and its Schedule 1 are defined and where used shall have the meanings set out in Schedule 2.
2.Constitution and Object of the Scheme
2.1With effect on and from the Commencement Date the Principal Employer hereby establishes the Scheme as a Registered Pension Scheme and under irrevocable trust. The purpose of the Scheme is to provide death in service benefits to Employees. The Trustee(s) will secure insurance cover in respect of their obligation to pay death in service benefits under the Rules by one or more life assurance policies.
2.2The Scheme will provide a Lump Sum Benefit and/or a Dependants' Pension Benefit on death in respect of Employees, and any other person to whom the Principal Employer wishes to extend the Scheme, in accordance with the Rules.
2.3The perpetuity period applicable to the Scheme under the rule of perpetuities will be 80years from the date of this Deed.
2.4The Principal Employer hereby appoints the person(s) named as Trustee(s) as the first Trustee(s) of the Scheme and they accept such appointment.
3.Covenant by the Principal Employer
3.1The Principal Employer hereby agrees to observe and perform all the provisions of the Scheme that apply to them.
4.Participation by Employers
4.1The Principal Employer may admit as a Participating Employer of the Scheme another company or entity with which the Principal Employer considers itself to have a community of interest, subject to that company or entity confirming in writing to the Trustee(s) that it will perform all obligations under the Scheme applicable to it. The Principal Employer may extend the Scheme to such individuals as it agrees with the Participating Employer.
4.2Another company or undertaking (the "Successor") may by deed be substituted for the Principal Employer as the Principal Employer if:
(a)the Successor by that deed assumes the rights and obligations of the role of Principal Employer;
(b)that deed makes clear whether or not the outgoing Principal Employer will continue as a Participating Employer; and
(c)the Principal Employer (unless it has been dissolved) agrees.
4.3A Participating Employer may withdraw from the Scheme by giving the Trustee(s) one month's written notice of its intention to do so. Such notice shall not affect the liability of the Participating Employer to the Scheme prior to the withdrawal having effect.
4.4The Principal Employer will, and will procure that each Employer will, provide such information to the Trustee(s) as is required by law or that the Trustee(s) may reasonably require in order to administer the Scheme.
5.Amendment of Scheme
The Principal Employer may, with the consent of the Trustee(s), amend by deed the provisions of this Deed.
6.Appointment, Removal and Resignation of Trustee(s)
6.1The Principal Employer may appoint and remove a Trustee by deed. The Principal Employer may appoint a corporate Trustee (whether or not being a trust corporation) to act either as sole Trustee of the Scheme or as a co-Trustee. The Principal Employer may appoint a professional Trustee. Unless there is a corporate Trustee acting as sole Trustee then the number of Trustees of the Scheme will be at least two.
6.2A Trustee may at any time resign as a Trustee by giving one month's written notice to the Principal Employer. The Principal Employer may agree to accept a shorter period of notice from a Trustee.
6.3A Trustee will be entitled to such remuneration (if any) as may from time to time be determined by the Principal Employer. Such remuneration will be paid by the Principal Employer.
7.Powers and Discretions of Trustee(s)s
7.1The Trustee(s) have all powers necessary for the proper implementation and administration of the Scheme. The Trustee(s) may delegate the exercise of any of their powers, duties and discretions as they consider appropriate. In doing so, the Trustee(s) may impose such conditions and restrictions as they think prudent in the circumstances.
7.2No decision or exercise of a power or discretion by the Trustee(s) will be invalidated or questioned on the grounds that the Trustee(s) had a direct or other personal interest in the making or result of the decision or in the exercise of the power or discretion.
8.Trustees' Meetings
8.1The Trustee(s) will determine how the business of the Scheme will be transacted, whether by meetings in person or electronic means such as telephone.
8.2Any minutes signed by the chairman of the meeting of which they are a record (or at which they are approved) will be treated as conclusive evidence of what happened at the meeting except where there is an obvious error. A written resolution signed by the Trustee(s) (whether as one document or as several documents setting out materially the same resolution) is a valid resolution of the Trustee(s) whether or not approved at a meeting.
9.Administration and management
9.1The Trustee(s) are the administrator of the Scheme for the purposes of the Finance Act unless and until it appoints in writing another person or body to be the administrator.
9.2The Trustee(s) will:
(a)arrange and maintain such insurance policies as are required to cover their obligations under the Rules;
(b)diligently make and pursue any claims which they are entitled to make under the terms of a Policy;
(c)keep full accounts of all moneys for which the Trustee(s) is/are accountable;
(d)keep a record of all Members;
(e)keep receipts for the expenses for which the Trustee(s) becomes liable;
(f)operate a dedicated bank account in respect of payments into and out of the Scheme which is separate from any other registered pension scheme or employer-financed retirement benefits scheme and which is used solely for the purposes of administering the Scheme; and
(g)make all records relating to the Scheme available for the inspection of the Principal Employer, an Employer or HMRC.
9.3The Trustee(s) may obtain advice from, and engage the services of, any person on any terms which it thinks fit. The Employers will pay the fees and expenses of such persons in accordance with Clause 16.
9.4The Principal Employer shall procure that all Members are obliged, upon request from the Insurance Company or the Trustee(s), to:
(a)supply in a manner determined by the Trustee(s) any evidence reasonably requested by the Insurance Company or Trustee(s) concerning his membership of the Scheme or entitlement to benefit under the Scheme (including evidence of date of birth);
(b)supply such documentary or other evidence of health (including submission to medical examination), and complete such forms at such time with regard to health, as may be required from time to time by the Trustee(s) and the Insurance Company; and
(c)produce such documentary evidence as may be reasonably requested by the Employers, Trustee(s) or Insurance Company.
The Principal Employer shall procure that all Members are aware and agree that the Trustee(s) may exclude a Member from benefit, withhold payment of benefit or limit or decline to increase benefits until the Member has provided the evidence or information requested under this Clause.
9.5The Trustee(s) may, with the consent of the Principal Employer, delegate any of their posts, duties and discretions to any person on (whether or not a Trustee) and pay any person to whom they have appointed, employed, retained or authorised in accordance with this power such remuneration as the Trustee(s) and Principal Employer decide.
10.Indemnification of Trustee(s)
10.1Except where a liability or expense arises from a Trustee's wilful neglect or default, fraud or deliberate breach of trust:
(a)a Trustee will not be liable for the consequences of any act or failure to act in connection with the Scheme; and
(b)the Principal Employer will indemnify the Trustee(s) for any and all liabilities and expenses incurred in the exercise of their duties as Trustee(s).
10.2The Trustee(s) may purchase an insurance policy or policies from an authorised insurer to insure the Trustee(s) against any Trustee liabilities and expenses in relation to the Scheme. The premium for such insurance policies shall be paid by the Principal Employer.
10.3References to the "Trustee(s)" in this Clause 10 include the directors and officers of a corporate Trustee to the extent permitted by law. All exonerations, limitations of liability and indemnities given to a corporate Trustee and its directors are limited so far as is required to comply with sections 232 and 235 of the Companies Act 2006.
11.Termination of the Scheme
11.1The Scheme will be terminated on the earliest of the following events:
(a)the expiry of the perpetuity period;
(b)the liquidation of the Principal Employer (other than for the purpose of reconstruction or amalgamation);
(c)the expiry of not less than 90 days prior written notice to the Trustee(s) by the Principal Employer terminating the Scheme; or
(d)if the Trustee(s) so decide, the failure by the Principal Employer to pay any sum due under the Scheme within 90 days of such sum falling due.
11.2Termination will not be retrospective. Termination will not affect any benefit which has already become payable under the Scheme. No benefit will become payable to or in respect of a Member at any time after the termination of the Scheme.
11.3Any Policy may (unless prohibited by its terms) be assigned as directed by the Principal Employer after termination of the Scheme, and if not assigned it shall be surrendered. Any remaining assets of the Scheme will be applied in paying any outstanding costs and expenses payable by the Scheme and the balance of the assets shall be paid as the Principal Employer directs.
12.Taxation
The Principal Employer, the Trustee(s) and (where appropriate) the Employers will take such steps as are necessary from time to time, and are within their respective powers, to ensure that the Scheme is administered in such a way as to conform with the following requirements:
(a)the benefits payable under the Scheme are benefits secured by a Policy;
(b)any tax or duty for which the Trustee(s) (or any administrator to whom the Trustee(s) has delegated the administration of the Scheme) is or may be accountable to HMRC under any enactment may be deducted by the Trustee(s) from any benefit payable by the Trustee(s) under the Scheme;
(c)the Trustee(s) will report to HMRC as required by relevant legislation.
13.Matters of Doubt
Subject to the powers expressly given to the Principal Employer or the Employers under the Scheme, the Trustee(s) will decide any questions or matters of doubt in relation to the Scheme.
14.Disputes
14.1The Trustee(s) may adopt and amend a procedure for the resolution of disputes with any Member or Dependant.
14.2Any disputes between the parties to this Deed will be subject to the exclusive jurisdiction of the courts of England and Wales.
15.Applicable Law
This Deed and the Rules are governed by the laws of England and Wales.
16.Costs
16.1The costs of establishing and maintaining the Scheme will be met by the Employers.
16.2The Principal Employer shall procure that each Employer will pay to the Trustee(s) (in addition to the premiums payable by it under Rule 3) an appropriate proportion (as determined by the Principal Employer) of the costs and expenses incurred by the Trustee(s) from time to time with regard to the ongoing management and administration of the Scheme or with regard to the termination of the Scheme under Clause 11.
16.3If the Trustee(s) are not satisfied that any costs, charges or expenses arising in relation to the Scheme will be either payable by or recoverable from the Employers, or recoverable from the Scheme, the Trustee(s)s will not be required to act in accordance with the provisions of this Deed or be responsible for the consequences of any action or omission on their part in relation to the Scheme or be personally responsible for paying any costs, charges and expenses incurred in relation to the Scheme.
17.Counterparts
This Deed may be executed in counterparts each of which shall be an original but which shall together constitute one single instrument.
In Witness of which this Deed is executed and delivered as a deed on the date first above written.
Executed as a deed by [ ] acting by:Director
Director/Secretary / )
Executed as a deed by [ ] acting by:
Director
Director/Secretary / )
Schedule 1
The Rules
1.Definitions and Interpretations
1.1In these Rules:
(a)save where the context otherwise requires, a reference to a statute or statutory provision shall include a reference:
(i)to that statute or provision as from time to time consolidated, modified, re enacted or replaced by any statute or statutory provision; and
(ii)any subordinate legislation made under the relevant statute;
(b)unless otherwise specified, references to Clauses are to clauses of the Deed;
(c)references to any of the masculine, the feminine and the neuter shall include the other genders;
(d)references to the singular shall include the plural, and vice versa; and
(e)the words "include", "includes" and "including" shall be construed as if they were followed by the words "without limitation".
1.2Certain terms used in these Rules are defined and where used shall have the meanings set out in Schedule 2.
2.Membership
2.1An Employee will become a Member when his Employer, with the consent of the Principal Employer, designates him a Member or in accordance with any procedures or eligibility conditions established by the Principal Employer or conditions imposed under the terms of a Policy.
2.2A Member's Employer may terminate a Member's Membership without prior notice to the Member.
2.3A Member may terminate his Membership, or choose not to join the Scheme, by notifying his Employer in such manner and on such notice as the Principal Employerdetermines.
2.4Membership will be subject to any conditions or restrictions (including terms as to the payment of premiums) imposed by the Insurance Company.
2.5A Member will cease to be in Membership of the Scheme on the date on which any of the following events first occur:
(a)the Member’s Membership terminates pursuant to Rule 2.2;
(b)the Member ceases to be an Employee;
(c)the Member gives notice under Rule 2.3, and any notice period expires;
(d)the Scheme is terminated in accordance with Clause 11 of the Deed;
(e)the withdrawal of the Member's Employer from participation in the Scheme;
(f)the Member dies;
(g)the Member ceases to be a relevant UK individual as defined by the Finance Act;
(h)the Member has been absent from work (with the approval of their Employer) for three years for a reason other than ill-health or statutory leave; or
(i)the Member reaches the age stated in any Policy on which cover under such Policy ceases.
3.Premiums
The Principal Employer will pay premiums to the Scheme or, where so agreed with the Trustees, directly to the Insurance Company, of such amounts and at such times and frequencies as the Principal Employer and the Trustee(s) agree.
4.The Policy
4.1The Trustee(s) will ensure as far as practicable that the obligations of the Trustee(s) to pay benefits under the Scheme are covered by a Policy until the Scheme is terminated in accordance with Clause 11 of the Deed.
4.2The Trustee(s) will pay or arrange payment of all premiums and benefits in accordance with and subject to the Policy provisions from time to time in force. The payment of a Lump Sum Benefit and/or a Dependants' Pension Benefit will be subject to such terms and conditions as are contained in the Policy.
4.3Notwithstanding the provisions of these Rules, no person shall have an entitlement to any benefit the payment of which is not fully secured by a Policy. In the event that the Policy does not secure, either in full or in part, a benefit otherwise payable under the Scheme, the benefit shall cease to be payable or shall be payable in part (as applicable) to reflect the cover available under the Policy.
5.Lump Sum Benefit
5.1In the event of the death of a Member the Trustee(s) will pay a Lump Sum Benefit in respect of that Member, provided that a Lump Sum Benefit is payable under a Policy.
5.2The amount of the Lump Sum Benefit will depend on the terms of the relevant Policy.
5.3In accordance with Rule 4.3, in no event will the Member be entitled to a Lump Sum Benefit that is greater than the benefit secured in respect of him under the Policy. However, where the Lump Sum Benefit has been restricted to the proceeds of the Policy in respect of a Member in accordance with Rule 4.3, the Trustee(s) may augment the Lump Sum Benefit where the Principal Employer agrees, and will augment the Lump Sum Benefit when the Principal Employer instructs it to do so, provided that (in either case) the Principal Employer pays any additional contributions or such other sum that the Trustee(s) and Principal Employer agree are necessary.
5.4No Lump Sum Benefit will be payable in respect of a Deceased Member where the cause of death is excluded from coverage under the Policy.