Why increased regulation of SSASs would be a retrograde step
There have recently been one or two murmurings in the pensions industry calling for increased regulation of SSASs. This could include introduction of regulation by the Financial Services Authority (FSA) and the re-introduction of the compulsory use of professional trustees (abolished by the changes to pension rules in 2006).
The main thrust of these arguments seems to be that a number of SSAS holders, acting legitimately without professional trustees, are implementing investments that are against SSAS rules. The argument is that this should be addressed in two ways. Firstly, the requirement for all SSAS providers to act as registered professional trustees in the same way as the traditional SSAS administrator companies currently do. Secondly all SSAS providers would need to be FSA regulated.
There are several reasons why this type of increased regulation of SASSs should not occur.
Firstly, our experience at SSAS Practitioner.com is that clients who attempt to abuse the rules are extremely rare, and that the insinuation by a few individuals within the industry that SSAS holders acting as their own trustees (i.e. without the use of professional trustees) can invest in whatever they like is a gross misrepresentation. At SSAS Practitioner.com we rigorously vet all potential investments by our clients, and any clients who might be tempted to make unallowable investments (for example, into residential property) would be told firmly and unequivocally not to go ahead; any client who ignored this would have their contract with us cancelled or not renewed. They would also, of course, be subject to the full rigours of a subsequent HMRC investigation and the certainty of punitive tax charges. In our experience, the vast majority of our clients are more than capable of acting properly as sole trustees of their own schemes. Since 2006 it has been possible for SSAS holders to run their own schemes, although virtually all SSAS holders now recognise that the amount and complexity of the work required is too much for them. We also believe that any SSAS practitioner allowing or encouraging clients to invest in unallowable investments should be clamped down upon by HMRC and the Pensions Regulator and put out of business.
Secondly, the suggestion that SSAS practitioners should be required to act as professional trustees would significantly slow down the speed with which SSASs could be operated. For example the set- up of a new scheme or take-over of an existing scheme by SSAS Practitioner.com routinely takes no longer than three weeks. If we were required to become a professional trustee of our SSASs this would substantially increase the time taken for SSAS set-ups and take-overs, and investments such as loanbacks and commercial property purchases etc, to be implemented.
Thirdly, and even more importantly, the requirement for us to act as professional trustees would lead to a significant increase in our costs and hence in the fees we would have to charge our clients. The recent success of new practitioner companies like SSAS Practitioner.com, largely at the expense of the traditional and more expensive SSAS providers who act as professional trustees, clearly reflects the desire of many SSAS holders for greater independence, faster implementation of investments and, above all in these time of austerity, better value.
Finally, who would gain from this increase in regulation and bureaucracy ? The traditional SSAS providers who already act as professional trustees. And who would lose ? SSAS holders.
If you wish to have your SSAS administered by SSAS experts, who provide a great service at low cost, contact SSAS Practitioner.com:
0800 112 3750
info@ssaspractitioner.com
Company Website: www.ssaspractitioner.com
There have recently been one or two murmurings in the pensions industry calling for increased regulation of SSASs. This could include introduction of regulation by the Financial Services Authority (FSA) and the re-introduction of the compulsory use of professional trustees (abolished by the changes to pension rules in 2006).
The main thrust of these arguments seems to be that a number of SSAS holders, acting legitimately without professional trustees, are implementing investments that are against SSAS rules. The argument is that this should be addressed in two ways. Firstly, the requirement for all SSAS providers to act as registered professional trustees in the same way as the traditional SSAS administrator companies currently do. Secondly all SSAS providers would need to be FSA regulated.
There are several reasons why this type of increased regulation of SASSs should not occur.
Firstly, our experience at SSAS Practitioner.com is that clients who attempt to abuse the rules are extremely rare, and that the insinuation by a few individuals within the industry that SSAS holders acting as their own trustees (i.e. without the use of professional trustees) can invest in whatever they like is a gross misrepresentation. At SSAS Practitioner.com we rigorously vet all potential investments by our clients, and any clients who might be tempted to make unallowable investments (for example, into residential property) would be told firmly and unequivocally not to go ahead; any client who ignored this would have their contract with us cancelled or not renewed. They would also, of course, be subject to the full rigours of a subsequent HMRC investigation and the certainty of punitive tax charges. In our experience, the vast majority of our clients are more than capable of acting properly as sole trustees of their own schemes. Since 2006 it has been possible for SSAS holders to run their own schemes, although virtually all SSAS holders now recognise that the amount and complexity of the work required is too much for them. We also believe that any SSAS practitioner allowing or encouraging clients to invest in unallowable investments should be clamped down upon by HMRC and the Pensions Regulator and put out of business.
Secondly, the suggestion that SSAS practitioners should be required to act as professional trustees would significantly slow down the speed with which SSASs could be operated. For example the set- up of a new scheme or take-over of an existing scheme by SSAS Practitioner.com routinely takes no longer than three weeks. If we were required to become a professional trustee of our SSASs this would substantially increase the time taken for SSAS set-ups and take-overs, and investments such as loanbacks and commercial property purchases etc, to be implemented.
Thirdly, and even more importantly, the requirement for us to act as professional trustees would lead to a significant increase in our costs and hence in the fees we would have to charge our clients. The recent success of new practitioner companies like SSAS Practitioner.com, largely at the expense of the traditional and more expensive SSAS providers who act as professional trustees, clearly reflects the desire of many SSAS holders for greater independence, faster implementation of investments and, above all in these time of austerity, better value.
Finally, who would gain from this increase in regulation and bureaucracy ? The traditional SSAS providers who already act as professional trustees. And who would lose ? SSAS holders.
If you wish to have your SSAS administered by SSAS experts, who provide a great service at low cost, contact SSAS Practitioner.com:
0800 112 3750
info@ssaspractitioner.com
Company Website: www.ssaspractitioner.com
