The Pensions Ombudsman has upheld a complaint against an independent trustee of a small self administered scheme who failed to act in accordance with their fiduciary duty to the beneficiaries of the scheme, to ensure the security of the scheme’s assets.

In this case, carrying out checks to ensure that a property, which formed the main asset of the scheme, was insured was “intrinsic” to the trustee’s duty to safeguard the assets of the scheme. The Ombudsman held that the administration of the scheme was inadequate and that the trustees should have taken greater steps to check that the property was insured.

The Ombudsman also referred to the Pensions Regulator’s guidance on “Holding Scheme Assets Securely”, which states that trustees should consider “possible risks” that could jeopardise the security of the investment and to take steps to insure against these.

The determination is a useful reminder of trustees’ duties to protect assets and take steps to manage and insure risks to their financial loss. Although it is not mentioned in the determination, section 249A(5) of the Pensions Act 2004 also requires trustees to ensure “arrangements and procedures to be followed for the safe custody and security of the assets of the scheme”.