However, HMRC has introduced several measures to combat the problem of SSAS misuse. From September 2014, the revenue has made it a requirement that a fit and proper scheme administrator be in place at registration and throughout the life of an occupational pension scheme.
The responsibilities of an administrator are numerous, but in particular they will be expected to understand the reporting requirements and tax legislation necessary to fulfil the role. If HMRC has reason to believe the administrator is not fit and proper, the scheme’s registered status can be removed and subsequent tax penalties would be incurred.
Sadly, even between professional administrators, the role varies and there is no requirement for it to overlap with the role of trustee or for it to include influence over investments made within the scheme.
In itself the fit and proper administrator does not solve all the problems, and even where legitimate SSAS investments are made such as loan-backs, incorrect documentation could still result in tax charges.
The registration process itself has also evolved. The online registration process often resulted in almost instantaneous registration, but since 2014 HMRC has been enhancing its checks in advance of registration procedures.
Administrators will now receive a supplemental request for information that targets details of the introducer or promoter of the scheme, the employer, the intended investment and any parties involved in the administration of the scheme. Latest proposals
A further consultation was released in December as part of Project Bloom, a cross-government taskforce intending to tackle all of forms of pension scams. The document sets out key areas where it believes that direct intervention is necessary.
Limiting the statutory right to transfer:
Under current legislation, even where a transferring scheme believes the transfer is to a fraudulent scheme and thus jeopardises the safety of an individual’s pension savings, it is largely powerless to refuse the transfer.
The latest proposals state that while a statutory right to transfer should still exist, it would apply only in circumstances where the receiving scheme was either a personal scheme regulated by the FCA, where there was a genuine employment link to the new scheme, or where the receiving scheme was an authorised master trust.
Making it more difficult to open fraudulent schemes:
In addition to the measures already taken, it is proposed that the law be changed such that new pension scheme registrations can be made only through an active (non-dormant) company. The consultation asks what additional actions might be necessary, which appears to open the door for suggestions such as the reintroduction of a regulated body necessary for initial and continued scheme registration.
