Family plan - to be or not to be
Some have labelled Ssas as a solution to act as a family pension plan due to its capability of having multiple members.
Mattison said: “With Ssas’, there are many occupational schemes so you can have multiple members and they are the perfect structure for the family pension scheme, which is an underused strength of the product.
“You can have 11 family members but if somebody dies, you can have unlimited beneficiaries, which means that the product can cascade down the generations. We have a number of clients that do that and these schemes tend to build up to being quite large in terms of the fund size.”
Funds can sometimes be £10bnn plus where one adviser is running the family scheme or overseeing it.
“Everybody gets together once a year for a big family meeting to review the investment performance and the investments can be spread across a whole range of different things or they could all be invested through one managed fund or one discretionary managed fund for the whole family.”
But Penney, Ruddy & Winter chartered financial planner David Penney argued otherwise.
“I can’t see how it works better as a “family pension scheme” than a series of Sipps, unless it was a family business where the pension scheme owns the commercial premises,” he said.
“It’s an additional lawyer of fees, complexity and trustee duties that most people don’t need in my view.”
Likewise Neall, said: “The advantages of a Ssas compared to other products for a family run business are really few and not quite as they seem.
“A family with an unencumbered house can raise a loan back to the company from the Ssas against the security of the property, and the rate of interest can be favourable. This loan back feature is the only real advantage over a Sipp or group Sipp arrangement.”
Neall said some argue that you can minimise cost because you can set up your own trust and scheme registration.
“This is only really true if either you have someone with the appropriate skills within the company/family or the assets of the scheme are very significant so the flat fees incurred are low as a percentage compared to a Sipp provider where you will probably pay a percentage custody charge,” he said.
“The pooling of funds and inclusion of family members is sold as an attractive feature, but I see them as red herrings. What if not all the family work in the business, do the non-working members deserve the same pension? If you have numerous members, will they all agree on the same overall investment strategy?”
