Barnett Waddingham’s self-invested technical specialist has called the regulator’s proposal to ban small self-administered schemes (Ssas) an “over reaction” and encouraged it to improve guidelines.
Last month The Pensions Regulator (TPR) issued a statement that urged the government to issue a ban on Ssas as part of the regulator’s crackdown on pension scams.
James Jones-Tinsley, self-invested technical specialist at Barnett Waddingham, a provider of Ssas and self-invested personal pensions (Sipps), said that getting rid of Ssas all together was an over reaction, and called on the The Pensions Regulator to instead look at how these schemes could be better run.
“It’s working well for some so it would be better to look at how Ssas are regulated,” Mr Jones-Tinsley said.
He suggested a similar regulatory scheme to that of Sipps, where the individual must appoint a mandate pension trustee to “keep an eye on what’s going on”.
A more rigorous process to set up a Ssas, including the fit and proper test and thorough questions about how the scheme will be run, have already helped prevent potential scams through the use of the products.
“It’s better due diligence on both the company setting up the Ssas and those administrating the scheme and acting as trustees than before,” he said.
If The Pensions Regulator is to be successful in lobbying the government to ban Ssas products then Barnett Waddingham would still be left with an extensive book of legacy business to run.
“We support Ssas and put our full weight behind promoting them. The still have an important part to play in the pensions landscape.”
Mr Jones-Tinsley encouraged the regulator to work directly with providers to come to a solution.
Advisers have also voiced their disapproval of the The Pension Regulator’s suggestion that Ssas should be banned, but have also called for tighter controls and stricter guidelines on the schemes to help prevent potential scams.
Dennis Hall, chief executive and chartered financial planner at Yellowtail Financial Planning, agreed that Ssas has a place in the pensions market as they offer greater flexibility for businesses that need it.
He called the The Pensions Regulator’s suggestion to ban Ssas a “knee-jerk reaction”, and added that his financial planning firm often received inquiries about Ssas from companies.
“I think it is a knee-jerk reaction from someone who will probably never need that kind of pension because they probably get a good one with the regulator,” Mr Hall said.