What lies ahead?
Barnett Waddingham predicts that there are some “big eyes watching” what is going on in the market. “HMRC has tightened up its registration process for new schemes in a valiant effort to stop new schemes intend on liberating funds.”
The issue remains, however, that there is uncertainty over how the HMRC is determining whether a scheme is legitimate or not. The firm says an unfair assumption could be that SSASs are generally bad schemes. They are not, and liberation is most definitely not confined to a SSAS if you define SSAS as requiring members to be trustees.”
In late 2013, The Pensions Regulator issued a code of practice for defined contribution schemes. It lists various marks they expect DC schemes to have.
Barnett Waddingham says because there is no published exemption for SSASs, and with the guidance directed at trustees rather than administrators, it seems that the member trustees of SSASs need to up their game when it comes to communicating with themselves.
“This sounds too flippant,” the firm says, “there are some useful comments in the code of practice that, with careful amendment and application, could prove a useful blueprint of the gold standard of SSAS administration.”
In the pre-RDR world, the commission structure of pensions did not sit well with SSASs since it was typically based on funds under management. It was always difficult to make a commission fee structure work with such products. But what has changed in the new post-RDR world, is that commission is off the table and fees should all be agreed upon from the outset. This could theoretically bring back advisers to SSASs, and we may perhaps see a revival over the next few years – particularly as property investments are heating up once again.
One thing that is for sure is that SSASs are not going away any time soon.
