Adviser > Technical Central > Pre simplification > Occupational > Small Self Administered Schemes Changes To The Role Of Pensioneer Trustee
Small Self Administered Schemes Changes To The Role Of Pensioneer Trustee
The content of this page is based on our understanding of how pensions worked before A-Day, the 6 April 2006, and is provided for reference only.
PSO Update 69 "Enhancing the Role of the Pensioneer Trustee" was issued on 29 August 2000. This Update confirmed the expanded role of the Pensioneer Trustee.
Following the Update it became a regulatory requirement for the Pensioneer Trustee to be a:
- registered owner (along with other trustees) of all schemes assets
- mandatory co-signatory to all scheme bank accounts.
These regulations strengthened the role of the Pensioneer Trustee in order to reduce tax avoidance under a SSAS. The new requirements affect both existing and new schemes. The changes made by this Update are summarised below.
Pensioneer Trustee
All Pensioneer Trustees will be subject to audit and competency standards. They will also be required to enter into an undertaking with the Inland Revenue to ensure that Schemes do not break the rules.
Registration of Ownership of Assets
The rules vary depending on the type of asset and a brief explanation of each is as follows. This is subject to the guiding principle that where it is legally possible the Pensioneer Trustee should be a joint registered owner with the other Trustees.
Bank Accounts
The Pensioneer Trustee must now be a mandatory signatory to all Scheme bank and building society accounts including accounts with licensed deposit takers, except accounts only giving rise to a liability, e.g. loan and overdraft accounts. This had to be in place within six months of the date of the Update. Schemes had one year to comply with all other requirements.
Loanbacks
All repayments of loans made by the Scheme and any interest which is due must be paid into a Scheme bank account of which the Pensioneer Trustee is mandatory signatory. The legislation in this case was not retrospective but any loans made after 1 October 2000 require the Pensioneer Trustee to be a party to the Loan Agreement. If a loan was made before 1 October 2000, provided the amount does not increase, the changes do not apply. If the amount is increased then the Pensioneer Trustee must be party to the new Agreement.
Quoted/Unquoted Shares/Unit Trusts/Loan Stock/OEICS
The changes in these investments are retrospective and any of the investments shown above need to be re-registered showing the Pensioneer Trustee as a co-owner.
Land/Property
The rules for this registration depend primarily on where the property is situated. The overriding rule is that the name of the Pensioneer Trustee should appear on the document evidencing any interest in land/property owned by the Trustees of the SSAS together with the names of the other Trustees. Often there is a restriction on the number of Trustees that can be entered on the Title Deed, however the Pensioneer Trustee must always be included.
The Inland Revenue alternatives are as follows:-
Properties Registered in England and Wales
For these properties the requirements can be met by the application to register a restriction which means that the Pensioneer Trustee needs to be consulted before any sale is made.
Northern Ireland
An inhibition should be registered against such properties which has the same effect as a restriction. It has been confirmed that a 'caution' registered at the Northern Ireland Land Registers will not satisfy Inland Revenue requirements.
Scotland
For these properties the only option is that the Pensioneer Trustee must be entered on the Title Deed. However, if the property is subject to a mortgage then re-registration is not required until the mortgage is redeemed.
Portfolio of Securities/Investment Management Arrangements
The Pensioneer Trustee must be a signatory to any management agreement between the Trustees and the Fund Manager/Broker. It is vital that the proceeds of any such investment are paid into a bank account of which the Pensioneer Trustee is a mandatory signatory. If the Manager/Broker holds a nominee account, the requirements do not apply to this unless it can be accessed by the Trustees. If shares are dealt through the CREST System, there should be a written arrangement that any transfer from the Fund Manager cannot be made without the Pensioneer Trustee's written consent.
Insurance Polices/Annuity Contracts
The changes for these investments are not retrospective but policies which are entered into on or after 1 October 2000 need to include the Pensioneer Trustee as a party and be endorsed such that any surrender of these assets is paid only with the specific written agreement of the Pensioneer Trustee to the appropriate Insurance Company.
Other Assets
Any other assets not listed above should be documented to reflect the Trustees as owners and this document should show the Pensioneer Trustee as one of the owners. The Inland Revenue have confirmed that it is the duty of the Trustees, including the Pensioneer Trustee to ensure that the Scheme is properly administered and this is why the requirements have been made. This also includes the authorisation of payments from the Scheme for regular outgoings such as pension payments, loan, mortgage repayments etc.
SSAS Borrowings
Should the Scheme borrow to purchase an asset or for any other acceptable reason, the Pensioneer Trustee should be a party to the documentation. The change is not retrospective and is applicable to any new borrowings taken out on or after 1 October 2000.
The information given is based on our interpretation of the relevant legislation and regulations and may be subject to alteration as a result of changes in legislation or practice. Independent advice must be obtained regarding the effect on a specific scheme.
Updated 29 January 2004
Published 08 October 2002
For professional advisers only
