Are deposits held by trustees of large defined benefit occupational pension schemes covered by the Deposit Guarantee Scheme?

• A. Yes
• B. No
• C. Only if the trustees are part of a charity
• D. Only if the schemes are defined as small

Answer: (B)

The key idea is who the money actually belongs to as a depositor. The Deposit Guarantee Scheme protects deposits that belong to the person or entity named as the depositor. In a defined benefit occupational pension scheme, the cash is held by trustees in trust for the scheme members. The trustees act as fiduciaries, but the funds aren’t the trustees’ own money in their personal capacity or in a form that the DGS covers. Because deposits held in trust for third parties aren’t treated as the depositor’s own retail deposits, they fall outside the scheme’s protection. Size or charity status doesn’t change this, so deposits held by trustees for large pension schemes aren’t covered by the Deposit Guarantee Scheme.