Trusts In An Employment Context

When one thinks of trusts, one tends to think of the private family trusts which enable wealthy families to manage the transfer of their assets efficiently down the generations. Yet in fact some of the largest trusts in the world are found in the employment context and many ordinary workers will be beneficiaries of colossal trusts. For example, the Universities Superannuation Scheme in the UK had around £75 billion of assets under management as at 31st March 2023 – more than the GDP of some countries.

There are two main types of pension schemes – defined benefit schemes and defined contribution schemes. Defined benefit schemes promise to provide a certain level of benefits for each year of retirement (usually calculated by reference to final pensionable salary and taking into account inflation in some way). As the cost of providing these benefits cannot be known in advance − not least because individual life expectancy cannot be predicted all that can be done is to