Mistakes can happen, and individual and corporate trustees can be held liable for a breach of trust, whether it was deliberate, negligent or innocent.
Exoneration clauses operate so that a trustee is not liable to the scheme's beneficiaries for any breach of trust. They can cover a wide range of conduct, including: "negligence"; "gross negligence", innocent breaches and "wilful default". Indemnity clauses are designed to protect trustees from the financial effects of legal liability. They protect the trustees against loss which arises as a consequence of their role as a trustee.
Nabarro's eighth pensions clarity guide explains the differences between exoneration and indemnity clauses in a scheme's trust deed and rules.
To learn more, click 'View Briefing'.