Pension Trusts


Occupational pension schemes take various forms, but in essence trust law will apply where assets are segregated and invested to provide pension benefits. Most private schemes are funded and the fund is held on trust to make provision in advance for future liabilities to members by accumulating assets. The assets are invested and the investments held by the trustees.

In most countries statutory provisions apply special rules to pension trusts. In England for example, these are contained in the Pensions Acts 1995 and 2004. There is significant tax relief for “exempt approved schemes” in onshore countries but to secure that status pension schemes must satisfy certain stringent conditions. Many trustees of pension funds may therefore look elsewhere to offshore jurisdictions like Belize that have good assets protection laws to protect the pension funds and investments from contentious proceedings and possibly judgments that may arise over entitlement to surplus funds normally involving beneficiaries, employers, creditor s of an insolvent employer or companies which have taken over the employer company and wish to syphon off the surplus (take over raiders or predators). By going offshore to set up pension trust funds, employers may significantly reduce the risk from the claims of creditors. Offshore Services providers can be very useful in providing special offshore banking arrangements and accounting services to pension fund trustees.