Hammonds urges trustee boards to deal with conflicts of interests

Hammonds partner and head of pensions Francois Barker said it was essential the scope of a trustee secretary's duties were investigated.

Speaking at the Pensions Management Institute's first secretary to trustees seminar he said: "Quite often the role of the secretary to the trustee is not particularly well defined. Where the secretary also performs a corporate role, this can create difficulties and conflicts of interest, and potentially expose trustees to maladministration claims.

"It is essential to scope out the secretary's role clearly and, where there are competing duties at play, decide which should take precedence when they come into conflict."

He added that recent court cases and Pensions Ombudsman decisions have highlighted the fact that individual trustees are potentially exposed to personal liability for breach of trust - whereas it is almost impossible to attack directors of a corporate trustee.

He added: "Moving to a corporate trustee structure will entail additional compliance with the Companies Act 2006 - but this is a small price to pay for the added protection involved."

Hewitt consultant Wendy Donnelly said the role of scheme secretary had become "pivotal".

"With increasing demands on trustees, the role of scheme secretary has become pivotal, with the maintenance of appropriate and accurate records being crucial to the effective running of schemes. The scheme secretary also plays a vital role in managing relationships and ensuring that information is shared appropriately", she said.