Is the SSAS tide turning?

SSASs have been in for a bit of a battering over the last year or so. Tainted by misuse from scammers, efforts to control the rogues have had serious implications for legitimate businesses trying to set up and run these small occupational schemes. New SSAS registrations can now take several months rather than the previous matter of days.

Their image wasn’t helped by the then-executive director of the Pensions Regulator, Andrew Warwick-Thompson, declaring that an outright ban on the establishment of any more SSAS arrangements warranted serious consideration. Thankfully this hasn’t come to pass, but we have seen various pieces of new legislation drafted with implications for SSAS.

In September we had clauses in the draft finance bill that related to the status of the sponsoring employer of occupational schemes, a clear step to stop scammers using dormant companies to establish schemes.

Most recently DWP have launched draft regulations for consultation regarding the new master trusts regime. Master trusts aren’t necessarily the first thing that you think of when it comes to SSAS, however large numbers of these schemes looked to be caught under Pension Schemes Act 2017. Any occupational scheme that is used by multiple employers looked within the net, unless those employers were all part of one group.

So, a SSAS with more than one linked employer could be caught. This isn’t that unusual a situation. A business owner that uses a SSAS could well be a serial entrepreneur, so have more than one employer attached (think The Apprentice’s Michaela Wain!), and those employers aren’t necessarily structured as a group. Another example would be husband and wife who each own a business and have pooled their pension assets in the SSAS.

The good news is that a number of parties in the industry alerted the DWP to the issue, and the DWP have taken steps to exclude most SSASs. The new regulations not only provide an exemption for single member schemes with two or more employers, but also for small schemes where 50% or more of the trustees are members of the scheme. Under a SSAS all members will be trustees, so there would rarely be circumstances this requirement would not be met.

The consultation addresses the issue of SSAS with multiple unconnected employers potentially falling within the Master Trust definition, and the DWP state that they “do not feel it is necessary for the regime to apply to these schemes as they are not exposed to the same risks as Master Trust schemes.” A positive sign indeed.

There are still concerns about the wording of the draft regulations around common control that could mean that some SSAS are caught, but the consultation notes are clear that this is not the intention so there is a good chance these issues will be ironed out.

So, is the anti-SSAS tide turning? Perhaps. At the very least the rate of attack is slowing.

Senior Technical Consultant

Lisa is an Economics graduate who has been in the financial services industry since 2003. Prior to joining AJ Bell in 2014 she spent nine years working in senior technical and consultancy roles at a major SIPP and SSAS provider. Lisa is part of our Technical Team, responsible for providing regulatory and technical analysis to the business and outside world. She is also a regular speaker at adviser events.