Chris Smeaton, director of marketing at James Hay Partnership, says the changes from April also offer “exciting opportunities” to family-run businesses.
“The facility to pass on pension funds to non-dependants opens up significant succession planning opportunities because it will be possible to pass on the assets of the scheme to multiple generations with potentially little in the way of tax consequences.”
David Littlewood, director at Ebor Trustees, thinks the changes to allow freedom and choice will be appreciated by scheme members. “Of greater long-term benefit to scheme members could be the removal of the withholding tax on transfer lump sum death benefits. This will be of tremendous significance when a scheme has illiquid assets – such as commercial property – and a scheme member has no ‘financial dependant’. A new class of ‘nominated beneficiary’ will greatly aid continuity of schemes and the sponsoring business.”
Complex charging
As with any product, it is important to know what is being offered and the cost. Table 2 looks into a breakdown of what is available, along with charges from each provider for their SSASs. Charges differ greatly. Some scheme providers, such as IPM Trustees, say there is no initial fee, while others, such as Bespoke Pension Management, charge £1,760.
Talbot & Muir’s Ms Trott explains the charging structures surrounding SSASs are incredibly variable, making an initial comparison difficult.
“There are functions that need to be conducted annually, which are not necessarily member-dependent such as the annual return to HMRC,” she says. This is not always included in the annual fee, hence the headline fee could be very misleading to an adviser or client that doesn’t have a background in SSAS. Additional charges can easily add up, especially where they are charged on a per-member basis, some providers offer a set fee with additional annual charges for additional members, again making the cost at outset hard to gauge from just a fee overview.”
It is suggested to always acquire an estimate based on specific circumstances of each new SSAS taking into account any issues – such as who will be members, whether there will be property involved, borrowing and loanbacks as examples. Ms Trott says this will give a clearer overview of what the client can then expect to pay. “This will make comparisons with other providers – and possibly Sipps – easier to make and will also mean there should be no nasty surprises. Even where there is a time cost element, which is often the case, providers should be able to give ballpark estimates based on information provided.”
