Trusts


Our Group Life Assurance policies are designed to work in conjunction with a discretionary trust. Any benefits, in the form of a lump sum or dependant’s pension, will be payable to the scheme trustees. Employers can establish their own trust. Alternatively, our Group Life Master Trust, which is available through CLASS, could be an ideal solution for small employers who do not have any Group Life Assurance cover in place.

 

Employer-Established Trusts

Group Life benefits can be paid through a pension scheme (which should already have a trust in place), or a standalone Group Life scheme.

Registered

When setting up a registered standalone Group Life scheme under a discretionary trust, we would expect the following steps to be completed before a policy is placed on-risk:

1. Set up the scheme by executing a trust deed

Canada Life provides a specimen trust deed to use, however we strongly recommend that the deed is referred to legal advisers for vetting and tailoring to suit specific needs. 

Please note, a policy cannot go on-risk prior to the execution date of the trust deed.

2. The registered trust deed will appoint a scheme administrator, who needs to register using the HMRC Pension Scheme Online Service

If the scheme administrator has not previously registered, this can take a few days to complete.

3. Register the scheme

This is completed through the HMRC Pension Scheme Online Service. A guide to using this service is available here.

Once the scheme is registered the Pension Scheme Tax Reference (PSTR) number will be available. You will need this number and the date of the trust deed to assume risk with Canada Life for registered schemes.

Excepted

In some circumstances, an excepted scheme may be more appropriate. Canada Life provides a specimen trust deed to use, however as with our registered trust deed we recommend this is referred to a legal adviser. To help determine the difference, we have produced a comparison of the two which can be found here.


Any amendments to a trust deed that affect the policy must be agreed by Canada Life first. Changes to a trust deed will not be automatically applied to a policy.

All deeds provided are Word templates with multiple signature blocks to allow for nearly all scenarios. It is important to remember trust deeds are the property of the trustees and should not be returned to Canada Life.

This specimen deed (and accompanying scheme rules) is available to set up a standalone Group Life Assurance scheme, providing lump sum and/or dependant’s Death in Service Pension benefits for employees. This can be registered with HMRC and must be in accordance with the Finance Act 2004. Participating employers who are joining the trust at the beginning can also be included using this deed. Additional signature sections can be added as necessary.

Notes about how to use and complete are attached to the deed. Independent legal advice is recommended in all circumstances.

This specimen deed changes the provisions of declarations of trust (and accompanying scheme rules). This is available for registered standalone Group Life Assurance schemes to update the trust deed and rules to the most up-to-date versions, meeting the requirements of the Finance Act 2004.

Notes about how to use and complete are attached to the deed. Independent legal advice is recommended in all circumstances.

The following specimen deed is available for use with standalone excepted Group Life Assurance policies and relevant life policies for an individual. This deed can provide lump sum benefits for schemes that are not registered with HMRC.

Please note that this deed is not suitable for completion with arrangements in the Channel Islands or the Isle of Man. Independent legal advice is recommended in all circumstances.

This deed is needed if:

  • The business of the outgoing principal employer has been purchased by the new principal employer
  • The outgoing principal employer has been dissolved but its employees have been re-employed by the new principal employer, who wishes to maintain the existing scheme
  • There is an internal restructure of the corporate group the principal employer belongs to and it is decided another company within the corporate group should become the principal employer

Please note that this list is not exhaustive. There may be other instances where this deed might be appropriate.

This deed can also be used to update the scheme name, reflecting any changes in principal employer if required.

Notes about how to use and complete are attached to the deed. Independent legal advice is recommended in all circumstances.

If you need to change your policyholder, we will also require a Change of Policyholder form – Download here

This deed is needed when a principal employer or trustee wishes to extend cover under the Group Life Assurance policy to the employees of another employer.

Notes about use and completion are attached to the deed. Independent legal advice is recommended in all circumstances.

This deed is needed when a principal employer wishes to appoint a new or replacement trustee under an existing trust.

Notes about use and completion are attached to the deed. Independent legal advice is recommended in all circumstances.

This deed is needed when a principal employer wants to remove a trustee from an existing trust where the principal employer and/or one or more individuals will continue to be trustees. This deed does not require the signature of the trustee being removed. If the trustee to be removed is available to sign, then the ‘Deed to retire’ a trustee should be used.

Notes about how to use and complete are attached to the deed. Independent legal advice is recommended in all circumstances.

This deed is needed when a principal employer wants to retire a trustee from an existing trust where the principal employer and/or one or more individuals will continue to be trustees. The retiring trustee must be available to sign the deed.  If they are not then the ‘Deed to remove a trustee’ should be used.

Notes about how to use and complete are attached to the deed. Independent legal advice is recommended in all circumstances.

This deed is used by the trustees of a Group Life Assurance scheme to change the name of the scheme.

Notes about how to use and complete are attached to the deed. Independent legal advice is recommended in all circumstances.

If there is any uncertainty about which document to use or whether a document is suitable for your organisation, we recommend seeking independent legal advice.

We strongly recommend that the deed is referred to legal advisers for vetting and tailoring. If there is any uncertainty about which document to use or whether a document is suitable for your organisation, we recommend seeking independent legal advice.

Master Trust

The Canada Life Group Life Master Trust scheme is already in place, so there is no need for the employer to set up a trust and register their own. The administration of the trust, including reporting to HMRC, is taken care of by independent scheme trustees. The scheme trustees take full responsibility for deciding who receives benefits if a claim becomes payable. All employees included in the scheme should be encouraged to complete an Expression of Wish form to assist the trustees in making their decision. We will request any further information required about the employee’s circumstances on receipt of a claim. We have no control over this decision-making process and are not liable for any act or omission of the independent trustee.

Employers must ensure that the Canada Life Group Life Master Trust is appropriate and meets their needs. We strongly recommend employers seek appropriate advice before taking action in respect of the Canada Life Group Life Master Trust.

  • The Canada Life Group Life Master Trust is only available in association with Registered Group Life Assurance policies issued by Canada Life.
  • It provides lump sum benefits for PAYE-taxed employees. It is not suitable for the provision of death in service pension benefits or benefits for non-PAYE taxed individuals.
  • Employers receive all of the tax advantages applicable to a registered pension scheme.
  • Inclusion in the Canada Life Group Life Master Trust is available to employers subject to completing a Deed of Participation.
  • There is no additional cost to use this service.
  • If the principal employer cancels the policy, then they and all associated employers will immediately exit the master trust on the date the policy ceases.

The Canada Life Group Life Master Trust is an HMRC-registered pension scheme administered by Trustee Solutions Limited, who will ensure that the trust is maintained and complete the necessary reports for HMRC. A copy of the master trust deed can be viewed here.

Trusts

This website is for UK professional advisers only and is not approved for use by private customers.

Canada Life Limited is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority.

Canada Life International Limited and CLI Institutional Limited are Isle of Man registered companies authorised and regulated by the Isle of Man Financial Services Authority.

Canada Life International Assurance (Ireland) DAC is authorised and regulated by the Central Bank of Ireland.