what is a self administered pension fund

[oaky9]

i am a company director in my late fifties and have a cash rich company what is the best way the get the funds into my pension from the companys current account

 

[Bez]

Use a self-administered fund, or any form of executive pension depends on your investment know how!

 

[LDFerguson]

Both a self-administered pension arrangement and an insured arrangement (i.e. a pension policy with an insurance company e.g. Eagle Star) are governed by the same rules regarding how much money you can contribute. So neither has any advantage in terms of extracting money from your company in a tax efficient way.

The primary difference is that in an insured scheme you pick a Managed Fund of some sort to invest your contributions in whereas with a self-administered scheme you choose the assets that your contributions invest in.

Liam D. Ferguson
www.ferga.com

 

[Bez]

I took this from an article I saw on the net:

A self-administered pension scheme is an employer-sponsored arrangement which does not rely on insurance contracts for administration.

Self-administered pension schemes can operate as defined benefit or defined contribution arrangements and can include as few or as many members as the employer requires. Schemes with twelve or less members are treated as small self-administered schemes (SSAS) and carry additional reporting requirements and investment restrictions.

The main advantage of self-administered pension schemes is the flexibility of investment options – trustees can access as many different investment manager funds as they want and can include directly-held property in the scheme assets.

 

[shaking]

Explanation below:

A self administered scheme is one which invests directly in the open market as opposed to holding a pension policy with a life assurance company.

The usual reasons why a company might establish such a scheme as opposed to using a pension contract from a life assurance company are:

If the company wants to use the services of an institutional fund manager but does not want to be tied to the performance of a single fund manager, a self administered scheme allows the fund to be split between several managers or switched from one manager to another without difficulty. The costs associated with a self administered scheme, particularly where contributions are significant, are often lower than with a standard pension contract.
In terms of restrictions on investment , there is a lot of leeway but there is a statutory requirement to notify the scheme members if more than 5% of the fund is invested in the employer's business ( self investment).

There are restrictions however on self investment if the scheme is regarded as a "small" scheme. A Small Self Administered Scheme is one which has fewer than 12 members or where 65% or more of the company is attributable to 20% directors, their spouses or dependents.

Self Admin schemes also allow you to invest in shares and direct property through your pension which is an attraction for alot of people. On the subject of borrowing the recent Finance Bill allowed it which is a major development and currently the banks have indicated that subject to certain criteria (e.g. rental income) they will look at loans to value of between 50% to 75%.

 

[Conan]

The self administered route is ceratinly an option if:

• You have the time to manage the portfolio
• You have a definite view as to how the portfolio should be managed
• You can access the assets you want

In reality many Self Administered schemes are established with the intention of buying property, but find it difficult (if not impossible) to acquire property at a reasonable price. Also bear in mind the issue of diversification (not putting all your eggs in one basket). For a small (in value terms) self administered scheme this may be difficult.

In fact it is not uncommon to see many self administered schemes "invested" in Cash because they cannot find the ideal asset or because not sufficient time is devoted to active management of the portfolio.

 

[Bez]

The OP could get the money out just as easily to an Executive Pension (insured arrangement) as he/she could to a Self-Admin Pension surely or at least that's what I was told?