Small Corporate Pension Schemes
Executive Pension
Schemes ("EPPs")
These were mainly for senior staff and people who
control their own company. They follow occupational scheme legislation, as
opposed to the rules for personal pensions. However since the
simplification rules now allow controlling directors full access to
personal pensions and SIPPS, these schemes are of limited interest to such
executives nowadays as they have little or no advantage over
personal plans. Indeed many EPPs were set up under rather cumbersome
contract terms and/or onerous charges, and many are now being dismantled, with
the proceeds being transferred to new personal pensions and SIPPs.
The main advantage for following such a
scheme used to be that it was possible to pay in higher contributions
(through a combination of employee's and employer's) than into personal
pensions. However this is no longer the case.
Small
Self-Administered Schemes ("SSAS")
A step up from the old EPP,
these pension schemes were suitable for small companies and had wide
powers:
-
The ability to
make loans (e.g. back to the company), subject to governing rules;
-
The ability to
invest in commercial property - including property which the
company (which can lead to some very favorable tax
structures)
-
Useful in
succession planning.
A SSAS may have up to
eleven members, is administered by a trustee, and monitored by the Inland
Revenue to ensure compliance with the rules. Unlike an EPP, a company may
only have one SSAS.
Bates pension specialists are skilled in
advising on these types of scheme. Please call for further advice.
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