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Exclusion clause (Pensions) meaning

What does Exclusion clause (Pensions) mean?
In pensions practice, an exclusion clause (also called a trustee exoneration clause) is wording in a scheme’s trust deed and rules that seeks to limit or exclude trustees’ personal liability for breach of trust. Across the UK, legislation significantly restricts such provisions. In Great Britain, section 33 of the Pensions Act 1995 renders void any term that purports to exempt a trustee from liability for breach of trust or to indemnify a trustee out of scheme assets; schemes may, however, pay premiums for trustee liability insurance. An equivalent rule applies in Northern Ireland. By contrast, general (non‑pensions) trust law in England and Wales (for example, Armitage v Nurse) permits exoneration for negligence but never for fraud or dishonesty; courts construe these clauses strictly. In Ireland, exclusion clauses are used in pension scheme rules but cannot exclude liability for fraud or dishonesty and operate subject to the Pensions Act 1990 and Irish trust law; employer indemnities and insurance are commonly used instead of broad exoneration. Practically, any exclusion wording must be read with the statutory override, and carve‑outs for gross negligence or wilful default are typical. Trustees should rely on robust governance, regulated advice and appropriate insurance rather than expecting scheme rules to...
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View the related Practice Notes about Exclusion clause (Pensions)

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