Introduction

In essence, a conflict of interest will arise where one party owes obligations to two or more other parties and the interests of those parties conflict. Whilst the potential for conflicts of interest has always existed in the occupational pension scheme regime, the risk of such conflicts arising has increased in recent years. Changes in the scheme funding and section 75 debt regimes, the existence of scheme funding deficits and the introduction of the Pensions Regulator (TPR) and the statutory codification of conflicts in the Companies Act 2006 have all played a part. The heightened risk of conflicts arising calls for a heightened awareness amongst trustees, employers and their professional advisers as to how to manage these risks. In this chapter we consider the framework surrounding conflicts of interest and the practical implications for pension scheme governance.