Question of Finance: How can I set up a self-administered pension?
QI'm interested in setting up a small self-administered pension scheme (SSAS).
As a company director, I have been told that this is an option available to me that allows the pension holder greater flexibility in terms of investments and also in terms of control and security.
How do I go about setting this up?
AAn SSAS is a corporate pension scheme that allows the greatest level of investment control.
An SSAS provides a tax-efficient environment in which a company's profits can be invested to provide retirement benefits for directors and employees.
There are a variety of investment options available and you can control the level and choice. A pensioner trustee will also be employed to act as a joint "custodian" of the scheme's assets. This is a pension expert approved by the Revenue Commissioners.
The trustees of an SSAS are responsible for and control all aspects of the SSAS investment strategy and payment of retirement benefits. This gives members confidence in the security and management of their assets.
A further advantage of the SSAS is that the assets in the SSAS established under trust are not part of the pension provider's own balance sheet.
Therefore, the SSAS member avoids the risk that his pension assets may be called upon if the provider gets into financial difficulties. At retirement, if you are a proprietary director you can take 25pc of the fund tax free and the balance can be transferred to an approved retirement fund. Alternatively, an annuity for life can be purchased with the balance of the money. It is necessary to keep some funds in your pension until you are 75.
An independent adviser will be able to guide you to the providers of these schemes.
- Sean McLoughlin, Director, Independent Trustee Company.