What is a Small Self Administered Scheme?

According to Pension Practitioner .Com, a true Small Self Administered Scheme (SSAS) is a pension scheme established by a business, where the members are also appointed as trustees. As trustees they invest the funds for themselves and they also ultimately pay out the benefits from the pension scheme. They are obliged to consider qualified investment advice in their investment decisions

The trustees set the rules for how funds should be applied, this can include loans back to the business plus commercial property and stocks and shares.  Given the investment powers, a SSAS may give a greater degree of flexibility on investment rules than other pension schemes, such as SIPPS. Under a SIPP, the investment rules are set by the SIPP Trustee Company, which the SIPP policyholder are required to act within.

The contributions paid from either the business or the individual is paid into a SSAS pension bank account, which is opened by the member trustees. The investments are selected by the the member trustees and they are obliged to consider investment advice in their investment decisions.

Up to 25% of the accumulated fund is paid out from age 50/55 with the balance of the fund paid a income from the pension scheme to the members.

SSAS Administration companies can administer these schemes for trustees, or they can undertake this role themselves. Given that the rules change and HMRC guidance can also be complicated, a proven SSAS Administrator such as Pension Practitioner .Com Limited can be ideal in ensuring that the pension scheme remains tax compliant.