Small Self-Administered Pension Funds are aimed at business-owners attracted to the benign tax régime governing pensions and who like to keep a tight rein on investment options and charges. Until a surprise announcement in the Finance Bill 2004 that flagged authorisation to borrow, heretofore gearing or borrowing was proscribed, other than in limited syndicated investment situations. This relaxation of the rules to allow borrowings will see SSAPs assume a fresh impetus and direction. Property purchase at home and abroad is now readily realisable within one's pension fund.
Only one member schemes may borrow.
WHY MY OWN PENSION FUND?
Because it embodies options, flexibility, transparency and control. Business-owners warm to the idea of knowing what's going on - especially when it comes to a sizeable on-going investment of hard-earned money. This combination is ideally placed to give better value for money. Flexibility; a wide range of investment options presents itself - spanning Stock-market investments, deposits, tax-exempt unit-funds, property, forestry.
Transparency; means no more and no less than having a handle on what's happening to your money; how funds perform from year to year and charges incurred. Control; puts the business-owner in the driving seat. Borrowing ; borrowing within an SSAP is now available. INVESTMENT OPTIONS
- Direct Property Investment (with borrowing)
- Shares Portfolio
- Managed/ Equity Funds
- Property Funds
- Hedge Funds
- Currency Funds
- Tracker Bonds
- Government Stock
- Deposit-based instruments
INVESTMENT RESTRICTIONS The Retirement Benefits District (RBD) within the Revenue Commissioners hold wide discretionary powers in monitoring and controlling self-administered pensions. These powers are wielded to ensure, as far as possible, that the build-up of retirement benefits for the individual is the driving force - rather than the luxury of diverting corporate earnings in a current lifestyle agenda that circumvents the PAYE régime. And so things like yachts and works-of-art are not sanctioned. Property investment must be at arms length before and after. So a previously held property cannot be bought-out by one's pension fund. Nor is it allowed that one's business or one's family would enjoy anything approximating to own-door usage. Nor can one's fund invest in shares linked to the business. Even investment in foreign property is treated with suspicion - and an individual submission to RBD is required.
The role of Moneywise is to provide the requisite Pensioneer Trustee services - effectively acting on behalf of Revenue to ensure the rules are being met.
CHARGES
There are two principle charging structures in the market-place. Many providers of SSAPS charge an initial set-up fee of €1,500 to €2,000 followed by fund-based charging at 1% p.a. Significantly better value-for-money is to be had in a flat-fee situation that takes no account of fund size and having a higher start-up fee - and this is the Moneywise approach. We charge €3,000 plus VAT at outset and thereafter a yearly administration /trusteeship service fee of €1,500 increasing with cost-of-living index.
For a full report on SSAPs post your details HERE |
