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A small self-administered scheme (SSAS) pension is designed for small businesses that have fewer than 12 employees. You often see them used in small businesses or family-run businesses.
But what is a SSAS pension? Read on if you’re researching workplace pension options for your staff and want to find out more.
There are so many pension types out there, and selecting the right scheme that’ll help your staff plan for retirement is an important consideration. Here we explore how to set up a SSAS pension, the benefits, and important rules and regulations you need to follow.
SSAS is a contribution-based pension scheme that small businesses can manage themselves.
These self-administered schemes can be a good option if you have a limited company or partnership as you can have greater flexibility over your investments. You can even choose to invest in your own company.
You might also consider using one if you’re a landlord and have set up a property company and employ people to help you manage your buy-to-let.
A self-administered scheme gives you ultimate control of where your funds are invested. And with no SSAS pension providers, it’s entirely managed by you (or whoever you appoint as a scheme administrator in your business). This means you’ll need to take care of any admin too.
You’re only allowed one scheme for the whole company, which is why it’s more common in small family-run businesses. You simply invite your staff to become ‘members’ of the scheme (up to a total of 11 people), and they can input into decisions about where funds are invested.
You’ll also need to appoint ‘trustees’ of the scheme to operate the scheme on a day-to-day basis. This can be all of the members, or a select few.
When it comes to retirement, members can start withdrawing from age 55 (as with any workplace pension). The amount your members receive depends on how much has been paid into the pension pot, and for how long, as well as investment growth over time.
There are some important steps you need to take when opening a SSAS pension for your business:
You can (manage your registered pension)[https://www.gov.uk/guidance/manage-a-registered-pension-scheme] by signing in to the government website with your credentials.
A SSAS has to be registered with HMRC, which means the same rules as other workplace pensions apply. To be eligible, you must:
Other rules include:
The HMRC SSAS pension rules allow members to invest in things like commercial property or a company loan to buy an asset for your business.
As with any pension, members of the SSAS can claim tax relief. As the business owner, you may be able to reduce your tax liability depending on the contributions paid into the scheme.
You should make sure you register the scheme with HMRC in order to be eligible for tax reliefs. You’ll need to include information on any reliefs on your company tax return every year.
The government has got a number of websites you can use to help with pension planning. For guidance on setting up a SSAS pension for your business, take a look at:
As an employer you’re legally required to automatically-enrol your staff into a workplace pension.
Read our guide to workplace pensions for employers for more information on your responsibilities.
Tax and investments is a complex subject. You should treat this article as a guide only and always seek financial advice from a professional if you’re not sure of anything.
Is there anything else you’d like to know about the SSAS pension scheme?
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Catriona Smith is a content and marketing professional with 12 years’ experience across the financial services, higher education, and insurance sectors. She’s also a trained NCTJ Gold Standard journalist. As a Senior Copywriter at Simply Business, Catriona has in-depth knowledge of small business concerns and specialises in tax, marketing, and business operations. Catriona lives in the seaside city of Brighton where she’s also a freelance yoga teacher.
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