A massive 98 per cent of advisers believe that SSASs should not be banned, as proposed by The Pensions Regulator, but subject to tighter controls instead, according to a poll carried out by Sipp and SSAS provider Dentons Pension Management.
The poll, of 48 advisers, found 84 per cent would like to see an HMRC approved list of SSAS operators, while 54 per cent would like SSAS professional trustees made responsible for asset acceptance.
A further 47 per cent said they would like to see a SSAS permitted investment list introduced.
TPR executive director for regulatory policy Andrew Warwick-Thompson recently called for a ban on SSAS arrangements, arguing they pose a security risk to vulnerable retirees, as they do not offer the same security as Sipps or larger DC arrangements.
Figures from TPR show that of the 34,500 DC schemes in the market now, 32,000 are micro schemes with only 2 to 11 members, of which 21,000 are SSASs. In fact this understates the size of the problem – only SSAS with two or more members are obliged to register with us. The Government’s consultation that proposes abolishing SSAS arrangements suggests there may be in excess of 750,000 one-member SSASs in the market. TPR says policing such a large number of schemes presents a significant regulatory challenge.
Dentons director of technical services Martin Tilley says: “The results of the survey show there is a strong belief that SSAS is still a valuable financial planning tool and that they have a place in the pensions industry. We are under no doubt tighter controls are needed in order to protect clients from being scammed, a number of which have been suggested in responses to the recent consultation. It’s obvious that financial professionals are in need of some clear guidance on how to keep client funds safe in their request for a list of approved SSAS operators and permitted investments.”
Warwick-Thompson said: “SSASs are exempt from many of the legal duties designed to protect members that are applicable to larger schemes. Further, the ease with which a SSAS can be established, and the minimal legal and reporting requirements for such schemes, has made them the vehicle of choice for criminals setting up a scam.
“In my view, SSASs have gone far beyond the scope of the policy intent that created them. Self-invested personal pensions, which are the subject of far tougher regulation by the FCA, are a safer vehicle for consumers who want control over the investment of their pension pot.
“So, I believe that pension transfers to SSAS arrangements ought to be banned. In fact, to put a stop to their abuse, I believe that an outright ban on the establishment of any more SSAS arrangements also warrants serious consideration.”