PRESS RELEASE
17 January 2007

We are surprised that it has taken so long for this issue to be raised. Trustees, in a time of increased responsibilities and amplified burdens should be afforded the peace of mind that Pension Trustee Liability (PTL) insurance brings. Let's not forget that the majority of trustees are 'lay' trustees who have their full-time jobs to take care of in addition to being a trustee!

In no other industry would a person be held so individually responsible for a job without mandatory insurance. It is now time that the Pensions Regulator stepped in to enforce this.

The cost of PTL insurance is negligible. Take for example a scheme with assets of £50m. The annual cost for £1m cover would be approximately £4,500. The potential benefits of the cover far outweigh the cost with most policies offering a broad, wide-ranging cover for any breach of duty, cover for Regulator fines & awards, legal costs, retired trustees and even include the sponsoring employer & the scheme within the definition of the insured meaning that not only are the trustees covered under the policy, but also the sponsoring employer and the pension scheme itself (which ultimately benefits the scheme members).

Concerns that trustees would have a false sense of security as a result of mandatory PTL insurance are unfounded. Does a person driving a car act less carefully because they have insurance? The Pensions Regulator would still demand the highest standards & diligence from trustees, but the huge burdens of being a trustee in the current climate would be eased slightly by the fact that they have a safety net should a breach of duty occur.

Compulsory levels of cover are something that would probably have to depend on the size of the schemes - it would be unreasonable to demand a small scheme to have a limit of £1m whereas this limit for a large scheme may not be enough. A PTL risk-assessment procedure should be sent to all schemes to be discussed annually at trustee meetings - the level of cover should then be determined from the results of this.

The Regulator aims to 'protect the benefits of members of work-based pension schemes' and to 'provide support and guidance to trustees in their work in running schemes'. PTL insurance would help them to do exactly this.

Ends

For further information contact:

Jamie Ricketts, Assistant Underwriter, E&O Professionals: 020 7220 0023
Vaughan Andrewartha, Votive Communications: 020 7402 2448
Email: enquiries@eoprof.co.uk
Web: www.eoprof.co.uk