A Ssas must be established by an employer, which could be a limited company or any entity that employs someone.
“It can only be established by a sponsoring employer – therefore the business owners must be involved in process even if they don’t personally join the scheme,” explains Lisa Webster, senior technical consultant for Hornbuckle Mitchell. “In practice it will be business owners who are the members, but they may also invite others.”
Carl Lamb, managing director of Almary Green says: “Ssas are most suitable for company directors and other business owners, given the scope for the Ssas to complement the sponsoring employer’s own financial plans, whether in the form of making a loan from the scheme to the company, or tailoring the level of contributions paid to the scheme for maximum tax efficiency.
“As they are pooled arrangements, and all of the scheme members are also typically trustees of the scheme, a Ssas requires a certain amount of harmony between the members when it comes to making decisions on scheme investments and other matters.”
While the Ssas trustees can invite anyone they like into the scheme, the nature of Ssas means not everyone is suited to being placed into such a product.
“Because of the costs typically involved in operating a Ssas, they may be unsuitable for individuals with small existing pension savings, although economies of scale typically apply to schemes with more members,” adds Mr Lamb.
“They may also be unsuitable for individuals without a great degree of investment experience, or who only wish to use a limited range of pension scheme investments, in which case a low-cost personal pension may be a better option.”
