What is a SSAS?
A SSAS is a registered occupational pension scheme with a maximum of eleven members. The scheme is an occupational scheme, which means it is set up by an employer under trust for the benefit of certain of its employees. The employer can be a limited company as well as a partnership or a sole trader. This means that firms of accountants and solicitors can now set up a SSAS for their business.
The member trustees
Each member of the scheme is appointed as a trustee, which means that they control the scheme and in particular how it is invested and what benefits are paid. All decisions made by the member trustees must be unanimous.
The Independent Trustee and Administrator
D A Phillips & Co Ltd is appointed as the Independent Trustee and Administrator of the scheme. These roles are essential to the success of the scheme, due to the complex nature of this type of arrangement.
As Independent Trustee of the scheme we are jointly responsible with the member trustees for the scheme.
We act jointly with the member trustees as the Administrator of the scheme. In this role we have a joint responsibility to HM Revenue & Customs (HMRC) to ensure that it is administered in accordance with the legislation and regulations. Breach of these rules can result in tax charges and may jeopardise the tax exempt status of the scheme.
Administration of the Scheme
DP Pensions Ltd administers all SSASs that D A Phillips & Co Ltd is independent trustee of. More details of what that involves can be found in the ‘Our Role’ page below.
Funding a SSAS
Our SSAS can accept contributions both from the company(ies) and personally from the members. Clients are free to pay one-off contributions, set up regular contributions or pay them on an ad hoc basis. We can also accept contributions that are paid ‘in specie’ (ie not as cash), eg shares and property. Our SSAS can also accept transfers from other registered pension arrangements (again either in cash or with ‘in specie’ elements). More details on funding the scheme can be found in our Technical section.
Once the funds have been received, they are available for the members to invest as they decide. Our clients benefit from a wide range of investment options. Commercial property (which can be let to their business) and secured loans to their business are available as well as equity based investments. Clients can invest in insurance company funds, use discretionary fund managers, fund supermarkets or platforms, as well as invest in shares on an execution only basis. We are a party to all such transactions and co-owner of all scheme assets with the member trustees. More information, including a complete list of permitted investments can be found in our Technical section.
Members can generally take benefits at any time from age 55. There is no maximum age by which benefits must be taken. They are entitled to a lump sum payment (the pension commencement lump sum), which is tax free and a pension. The pension can be drawn from the scheme, or the member can purchase an annuity to pay their pension.
Members also have the option to take their benefits in stages through partial or phased drawdown.
How is the scheme allocated between the members?
A SSAS is a common trust which means that the assets held within it are not usually allocated to specific members. A member’s own share of the fund is expressed as a percentage of the total net value. This percentage is determined by how much money in terms of contributions and transfers has been paid in for them and what money in terms of benefits and transfers out has been paid out.