5. The Joint Responsibility of the Trustee

The supervisory duty of the trustee is not only a due obligation of the trustee, but also a behavior safeguarding its own interests. According to Article 30 of the Trust Law of the P. R. of China, ¡°Where the trustee, in accordance with law, entrusts another person to handle trust business on his behalf, he shall bear the responsibility for the acts committed by that person in handling such affairs.¡± It is provided in the General Principles of the Civil Law of the P. R. of China that where the agent conducts any civil legal act in the name of the principal to the extent of the delegated authority, the principal will bear the civil responsibility for the act of agent. The Trust Law of other countries generally requires the trustee to bear only the responsibility of selecting a third party and supervising the performance of its duties. If the trustee has paid due attention and fulfilled a duty of care at the time of selecting a third party or supervising its duties, then, even if the fiduciary property suffers a damage as a result of the third party¡¯s act, the trustee will not bear the responsibility for compensation. The requirements of China for the trustee are stricter than those of other countries and regions, and the trustee shall also bear a joint responsibility for the noncompliance of other managers as well as the responsibility or its own management behaviors.

6. Exemption Clauses

The principal shall also pay attention to the exemption clauses in the occupational annuity fund contract, for instance, the trustee is exempt from the responsibility for the risks brought by the principal¡¯s or the beneficiary¡¯s failing to fulfill the contractual obligation to the trustee in handling the trustee affairs. Moreover the trustee is exempt from the risks incurred as a result of exercising the relevant rights and duties as per the orders of the principal in accordance with contractual stipulations, provided that the trustees abide by the relevant regulations of the state. Both parties may partially or totally be exempt if, during the effective period of the contract, either party fails to perform the contract as a result of an act of God, or it will bring material adverse effects on both parties or either party to continue the performance of the contract. Either party, if being unable to perform the contract as a result of an act of God, shall immediately advise the other party so as to abate the loss possibly incurred to the occupational annuity fund property and the other party. The exemption clause in the contract, if in conflict with the laws and regulations of the state, will become null and void itself, but not affect the validity of the occupational annuity fund contract.

In general, the contents of the occupational annuity contract shall be in consistence with the provisions of laws and regulations, and make proper adjustments according to changes of the national policies.
The principal shall carefully study the contractual clauses on the premise of getting familiar with the relevant laws and regulations and the national policies so as to safeguard its own interests to the utmost extent.