Submitted by Sestini & Co
| on Fri, 11/17/2017 - 8:01 | In Pensions
, Tax planning and pensions
Auto-enrolment has been gradually introduced since 2012 in the UK, with the largest employers being the first to be expected to comply. The dates were phased for existing employers according to the start date of employees and size of business.
The Pensions Regulator has kept employers up to date with their duties via letters as well as a sizeable publicity machine.
Employees between 22 and state pension age, whose yearly income exceeds £10,000 and who are employed in the UK must be enrolled.
However, despite the relatively long lead in time and considerable fanfare, there are employers who are flouting the rules and the first prosecution took place recently, of Stotts Tours (Oldham), a bus firm where 36 members of staff were not put into a workplace pension. The first court hearing was due to take place on 4th October.
Generally we have found that the scheme has bedded in well since 2012 and that there is a great deal of clear and helpful guidance available from the Pensions Regulator.
Having said that, many of the companies we deal with (especially smaller businesses) are finding that the ‘standard’ offerings for auto-enrolment pensions are not flexible enough for their needs, especially where there is an appetite for using pensions as part of the employee reward package rather than simply in order to comply with the legislation.
Entrepreneurs and small business owners are starting to look at other pensions which are also auto-enrolment compliant but provide the greater flexibility they desire, particularly for key staff members. These can include personal pensions, Group personal pensions or SIPPs and can also include a company SSAS.
What are the benefits of using a SSAS (Small Self-Administered Scheme) as your pension vehicle?
One of the advantages is that it gives the sponsoring employer more freedom than a traditional pension or than a SIPP (Self-Invested Personal Pension) over where the funds are invested.
The Trustees of the scheme are free to make investment decisions within the parameters set by HMRC and this allows for a wide variety of options so long as the investment is genuine and made in the interests of members and their beneficiaries. For example the scheme could purchase:
· Shares (including up to 5% of the fund value in shares of the sponsoring company)
· Commercial property
· Business assets for the sponsoring company
· Gold bullion
· Investment trusts
The scheme can also loan money to the sponsoring business or another business.
Agreement from all members (who are also all Trustees) is required to make investment decisions and for this reason a SSAS must have a maximum of 12 members in the plan.
How can we help?
At Sestini & Co Pension Trustees Ltd we provide bespoke pension administration services to support those who wish to take control of their retirement plans and act as Professional Trustees for SSAS schemes.
Get in touch
Telephone: 01761 252520
Find out more, download our brochure.
Ready to apply? Click here to complete our application form.