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The opdu Report - Issue 19, November 2005 Bulletin Board Concerns have been expressed that the existence of exemption clauses restrict the possibility of scheme beneficiaries having a remedy against a trustee who had caused loss by his or her actions or omissions. The Law Commission have also considered potentially limiting the reliance upon the use of exemption/exoneration clauses which restrict the liability of trustees. In the past, most trustees relied upon exoneration and indemnity clauses to shield them from personal liability. However, this aspect was of particular concern to numerous employers and trustees at the time that the Pensions Act 1995 was being introduced. Accordingly, opdu was established with a view to providing proper insurance protection to trustees, internal administrators and sponsoring employers. The aim was to give comfort to trustees thereby encouraging the best quality candidates to volunteer for this valuable role. It was also considered important to provide an external resource (the opdu policy) for reimbursing losses suffered by pension funds. It was appreciated that the asset protection thereby given would ultimately be of benefit to pension fund members and enable justified claims by members to be met. Also see this issue's Insurance and Risk Management article by Jonathan Bull.
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