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Actuaries warn on group Sipp choice

Watson Wyatt is warning employers to take particular care when choosing a group Sipp provider as a means to take the maturing proceeds of ShareSave arrangements.

Group Sipps allow employees to continue to hold their assets in the shares of their employer,or to sell them and diversify their portfolio.

But Watson Wyatt says there is only a handful of credible group Sipp providers offering markedly different services with varied fees and fee structures. The consultancy firm says the group Sipp market is still immature and backing the wrong provider could lead to expensive decisions in the future.

Watson Wyatt senior consultant Will Aitken says: “Helping employees use the tax advantages of pension contributions is an appealing way of enhancing the value of a ShareSave arrangement but thought needs to be given to the provider used to collect the contributions.

“We are not convinced that all the entrants to the immature group Sipp market are wholly committed. Some seem to be entering the market because they feel they should, rather than because of any strategic belief in the group Sipp market.

“Employers considering this route should ensure that they undertake a thorough review of the provider mar- ket – rather than just opt for the first one that comes along – and ideally meet with a short list of providers in a beauty parade.”

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