The High Court has held that directors of the sponsoring employer of two pension schemes did not, as trustees of those schemes, owe any fiduciary duties to the employer.

H and W were directors of a company and were trustees of the company’s main and executive pension schemes (the schemes). After H and W left the company, it issued proceedings against them, arguing that H and W had breached the directors’ duties that they owed the company by, among other things, adopting unduly conservative investment and funding strategies for the schemes. In addition, the company argued that as trustees of the schemes, H and W owed the company a fiduciary duty to act in its interests.

The High Court held that as trustees of the schemes, H and W did not owe any fiduciary duties to the company as sponsoring employer. As trustees, H and W were entitled to take account of the company’s interests, but only where those interests did not conflict with their primary duty to the schemes’ beneficiaries. H and W were not in breach of their directors’ duties to the company by adopting conservative investment and funding strategies for the schemes. While the adoption of these strategies was to the advantage of scheme members, this did not necessarily mean that it was to the disadvantage of the company or that it was contrary to the interests of the company and/or improper.