The Pensions Regulator’s suggestion that there should be a ban on the establishment of any new Small Self-Administered Scheme (SSAS) risks “throwing the baby out with the bathwater”, AJ Bell senior analyst Tom Selby has said.

In a blog published yesterday, by TPR executive director for regulatory policy Andrew Warwick-Thompson wrote that SSASs have gone “far beyond the scope of the policy intent that created them”.

“SSAS 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.

“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,” he stated.
Although Selby agrees that stricter controlled should be placed around SSASs to protect savers from scammer, he believes Warwick-Thompson’s suggestions are “extreme recommendations”.

“There is nothing inherently wrong with a SSAS as a product and for many business owners, particularly where there are multiple people involved, they offer a level of flexibility and control that cannot be found in any other type of pension. The focus needs to be on ensuring there are appropriate controls and governance arrangements in place to ensure SSASs cannot be abused by scammers.

“Rather than destroying a legitimate pension savings vehicle that is used appropriately by many UK businesses, the government should reintroduce mandatory professional trustees for SSASs. This would make it very difficult for criminals to abuse the SSAS structure to facilitate pension scams and would protect savers without taking the draconian and ill-considered measure proposed by The Pension Regulator.”

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