Senior regulator wants ban on SSAS pension transfers

An executive director at The Pensions Regulator has called for pension transfers to SSAS to be banned. Andrew Warwick-Thompson, TPR executive director for regulatory policy, believes SSAS have “gone far beyond the scope of the policy intent that created them”.In a blog post about cracking down on scamming, he wrote: “we need to close off once and for all the second half of the ‘open goal’ – relevant small schemes (commonly referred to as small self-administered schemes or just ‘SSAS’).“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 pointed to DC Trust scheme return data research that showed that of the 34,500 DC schemes in the market now, 32,000 are micro schemes – those with only 2 to 11 members – and of these 21,000 are SSAS.He said: “In fact this understates the size of the problem – only SSAS with two or more members are obliged to register with us. In addition to the 21,000 we know about, the Government’s consultation suggests there may be in excess of 750,000 one-member SSAS.“Why is this a problem? To begin with, 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.“In my view, SSAS have gone far beyond the scope of the policy intent that created them. Self-invested personal pensions (SIPP), 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.”

Senior regulator wants ban on SSAS pension transfers

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