Dentons has suspended the use of scheme pension on its Sipp and SSAS products due to uncertainty caused by the Government’s decision to reclassify the arrangements as defined-benefits.
In October, Money Marketing revealed an amendment to the Pensions Bill could kill off the market for scheme pension after the Department for Work and Pensions excluded the payments from its definition of a money-purchase scheme.
At the time, Sipp and SSAS industry trade body the Association of Member-directed Pension Schemes argued DB funding regulations mean SSASs with fewer than 12 members will be exempt. However, Standard Life warned that all Sipps and SSASs with scheme pension are likely to be hit and that the SSAS exemption was granted at the time when they were only providing money-purchase benefits.
Dentons previously offered scheme pension on its SSASs and Family Sipp products.
Dentons sales and marketing director Martin Tilley says: “We have temporarily suspended the use of scheme pension on our Sipp and SSAS products.
“We believe the impact of the Government’s decision to reclassify scheme pension as a defined-benefit is far from clear, and we felt that to suggest to new clients that they could go into scheme pension with any form of certainty would be wrong.
“It is unfortunate that this has happened at a time when interest in scheme pension is at a high due to the restrictions placed on capped drawdown income.”
Yesterday, Money Marketing revealed that James Hay had closed its Family Sipp to new business. The Sipp and SSAS provider insists the decision is not linked to the scheme pension issue.
Rowanmoor Pensions will continue to offer its Family Sipp product. However, the provider has been forced to link scheme pension increases for new business to the limited price index to comply with DB legislation.
Axa Wealth says it has no plans to pull its Family Sipp offering.
Head of pensions development Mike Morrison (pictured) says: “We are confident that the rules in the Pensions Bill will not impact on our Family Sipp because they only apply to occupational schemes.”