Trusts and retirement funds (by MD of RFS)
An article that appeared in ‘Pensions World’ magazine of September 2010, deals with payment of a lump sum death benefit by a fund to a testamentary trust. Where member directs payment of death lump sum to his/her testamentary trust, the trust deed must provide for the following:
• It must make provision to receive money from a retirement fund.
• It must provide for fund benefits to be dealt with by the trustees of the trust, in the manner directed by the fund.
• Capital must be ring-fenced, capital and income must vest in the designated beneficiary and may not be redistributed.
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