Contractual Trust Agreement

To do this in the case of a dual trust, it is not enough to agree on a single administrative trust between the agent and the administrator, as this does not sufficiently separate the assets from those of the administrator in the event of insolvency. In an administrative trust fund, the President`s estate is managed by the agent in the name and benefit of the settlor. Such trust will cease to exist in the administrator`s insolvency through legal conduct. In order to sufficiently separate the assets of the trust from the assets of the Settlor simt, it is necessary to set up, in addition to this administrative trust, an agent responsible for security between the agent and the beneficiary of the trust. This requires an explicit trust agreement that gives the recipient the right to claim against the agent, without the Settlor being able to interfere with that right. As a result, the beneficiaries are able to allow the agent to demand separate satisfaction in favour of the beneficiary in the event of a default of the settlor. There are not yet any decisions of the Bundesgerichtshof which clearly state what conditions must be met to ensure that workers` pension rights are sufficiently protected in the event of employer insolvency. The agent is entitled to a separate satisfaction in favour of the workers in the event of the employer`s insolvency under Section 50 of the Insolvency Code. The decision clearly shows that in the event of the administrator`s insolvency, it is essential that all elements of dual trust are properly implemented in the underlying trust contract and that it is not enough to agree solely on the trust`s objective of guaranteeing beneficiaries in the event of insolvency.

The underlying trust agreement must therefore ensure that: outsourcing pension provisions for balance sheet purposes requires that the fiduciary assets that the agent contributes to the CTA comply with the balance sheet requirements as clearing hedging assets (Article 246, paragraph 2, 2nd sentence) or as a clearing fund (IAS 19.8) based on the applicability of the German accounting approach GAAP/HGB or IFRS. One of the common characteristics of the two accounting approaches is that the ability to compensate require, among other things, that the conditions of exclusivity of purpose and the prohibition of handover be met. The exclusivity of the object assumes that the loyalty credit provided by the Trustor to the CTA can only be used to satisfy the rights of the beneficiaries. The broadcasting ban provides that the return of the trust to Settlor is in principle excluded and can only be carried out in exceptional cases as a return resulting from overpayment or reimbursement of payments already made by settlor to the beneficiaries. Although two trusts are generally structured in this way, the judgment emphasizes the importance of all of these elements and makes it clear that a departure from this standard may jeopardize the security interests of beneficiaries. The Tribunal challenged the existence of a right to separate satisfaction from the agent in favour of the former employee, as the trust had not been properly structured. Recipients were not given the opportunity to directly charge the agent in the form of a contract for the benefit of a random third party. In theory, even under current liquidity protection measures, companies continue to transfer assets to trust in the event of over-insurance.