Why a Trust?

Why does CRISP have Trustees?

CRISP is set up under an irrevocable trust. A trust is simply an arrangement under which a group of people, ‘the Trustees’, hold property, ‘the assets of the trust’, for the benefit of others, ‘the beneficiaries’. A trust creates rights, which are enforceable by third parties, and the Trustees are appointed to ensure the sound management of the schemes’ assets for the good of the beneficiaries.

Apart from the management of assets, there are two other equally important reasons for setting the scheme up under a trust:

1)     To legally separate the assets of the pension fund from the assets of the Company. They are therefore held in a separate legal capacity and are not available to the employer’s creditors. This creates a valuable protection for members and their dependants. It also allows assets to the invested to produce a return for the fund.

2)     To obtain Inland Revenue approval for the pension arrangement in order to qualify for valuable tax concessions, i.e:

  • Tax relief on employee and employer contributions;
  • Exemptions for employees from tax on the contributions paid by the Company (i.e. not treated as a ‘benefit in kind’); and
  • Exemption from tax on the fund’s investment income and capital gains, where applicable.

In each case, apart from the Trustee Directors who have been ‘Member Nominated’, Compass Group PLC has the power to appoint and remove Directors of the Trustee Company as necessary. However, it should be recognised that there are no Compass Group PLC main board directors on the board of the Trustee, although Mark White is the Group General Counsel and Company Secretary.

In broad terms, the Trustee Company has the following duties:

  • To hold the assets of the scheme for the benefit of the members and their dependants.
  • To act in accordance with the Trust Deed and Rules of the scheme, within the framework of the law.
  • To act in the best interest of the beneficiaries, and in doing so, must act impartially towards all the beneficiaries. This means that Trustees cannot favour one category of members at the expense of another.
  • To carry out the duties with reasonable care and good faith.
  • To obtain and consider proper expert advice in areas where Trustees lack that expertise. The Trustees should merely take guidance from the experts, the final decision is theirs.
  • To ensure that money owed to the scheme is paid to the scheme.
  • To keep proper accounts of the transactions and proceedings of the scheme and ensure that accounts are properly audited by a professionally qualified auditor.