SSAS BAN

SSAS BAN.

The Pensions Regulator (TPR) has urged the government to consider a ban on SSAS pension schemes.

SSAS stands for small self-administered scheme.  It is a company pension with the power of self-investment controlled.  In short, just like a Self Invested Personal Pension (SIPP) but for company pension schemes.  Many directors for small businesses have a SSAS.  This is because they control the investments and the SSAS can even make loans to the company, known as “loan backs”.

The TPR is worried about ever increasing abuse of such schemes.

A SSAS with two or more members must registered and therefore ‘policed’ by the TPR.  SSAS with just one member/director do not need to register.

Given that a SSAS can have its own bank account and also loan money back to the sponsoring limited company.  There are set rules as to under what terms loans are made and where cash in accounts can be invested. There is clearly scope for abuse.

Comment

There are nearly one million SSAS schemes in the UK with only 1 member.  It seems totally logical for increased regulation although an outright ban we feel is over the top.  Perhaps a simple due diligence check by a bank when the SSAS scheme is writing checks on a bank account or a requirement that a financial adviser must be appointed to adviser the scheme and member would suffice.  The adviser would take on a liability to ensure the SSAS complies with pension law.