Pension transfers to SSAS arrangements should be banned, while an outright ban on the establishment of any more SSAS arrangements warrants “serious consideration”, according to Andrew Warwick-Thompson.
In his latest blog, The Pensions Regulator (TPR) executive director argued small self-administered schemes (SSASs) had gone “far beyond the scope of the policy intent that created them”, and in fact self-invested personal pensions (SIPPs) were a safer vehicle for consumers who want control over the investment of their pension pot.
“SSASs are exempt from many of the legal duties designed to protect members that are applicable to larger schemes,” said Warwick-Thompson (pictured). 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.”
“I believe 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.”
‘Draconian and ill-considered’
AJ Bell senior analyst Tom Selby took a different view however, and while agreeing stricter controls should be placed around SSASs to protect savers, warned the “extreme” recommendations from TPR “risk throwing the baby out with the bathwater”.
Selby felt there was nothing inherently wrong with the product and instead argued the focus should be on ensuring there were controls and arrangements in place so SSASs cannot be abused by scammers.
He added: “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 pensions scams and would protect savers without taking the draconian and ill-considered measure proposed by The Pensions Regulator.”
In his blog, Warwick-Thompson also said the cold-calling ban should be extended to include cold texts and emails, and trustees and scheme managers should also be provided with a ‘safe scheme’ list.
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