How Ssas’ are unique
One option to avoid the larger levy would be for schemes to consolidate but, due to their unique holdings and nature, this would not be simple.
Richard Mattison, director at Whitehall Group, explained Ssas have access to the widest range of investment options, including direct commercial property, and employer-related investments such as loans, leases, and unquoted shares.
“If Ssas products closed and consolidated into larger pension schemes to avoid the unfair additional levy premium on members, assets would not be transferrable as they are not permitted in larger schemes,” Mattison said.
“This would reduce member’s range of investment opportunities and possibly impact the small businesses that are the sponsoring employer of such schemes as they need to sell properties they occupy, repay loans, and sell shares earlier in the investment proposals.
“The range of investment and pension saving options in the market would become restricted, not diversified.”
Tully echoed this problem saying that if schemes consolidated there would be fewer paying the £10,000 levy which may mean the amount raised isn’t sufficient to meet the levy deficit.
“Ssas can’t easily consolidate as many hold commercial property or other illiquid assets, and there is usually a business specific reason a Ssas has been chosen rather than another type of scheme,” he added.
Calls to bring back pensioneer trustees
In April 2006, HMRC changed the rules so schemes no longer had to have a pensioneer trustee to operate.
Pensioneer trustee is a status conferred by HMRC on individuals or firms with specialist knowledge in the area of pensions law and pensions administration.
The role of the pensioneer trustee typically involves the establishment and administration of self-administered pensions.
There have now been calls to reinstate this requirement.
Bridgeman said: “To improve governance of pension schemes the solution is very simple. Return to where we were with professional pensioneer trustees running schemes who are both fully licensed and qualified. Give the liability and accountability back to pensioneer trustees and make it compulsory again to have a pensioneer trustee”.
Mattison agreed questioning why the government does not not reinstate this requirement and “regulate the professional trustee in the same way the FCA regulates Sipp providers?”.
amy.austin@ft.com
