Dentons has suspended the use of scheme pension on its Sipp and SSAS products due to uncertainty after by the Government’s decision to reclassify the arrangements as defined benefits.
In October, Money Marketing revealed that 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.
The Association of Member-directed Pension Schemes argues that DB funding regulations mean SSASs with fewer than 12 members will be exempt but Standard Life believes all schemes will be affected.
Dentons previously offered scheme pension on its SSASs and Family Sipp products.
Dentons sales and marketing director Martin Tilley says: “We have been forced to temporarily suspend the use of scheme pension on our Sipp and SSAS products. We believe the impact of the decision to reclassify scheme pension as a defined benefit is far from clear and to suggest to new clients they could go into scheme pension with any form of certainty would be wrong.
“It is unfortunate this has happened at a time when interest in scheme pension is at a high due to the restrictions placed on capped drawdown income.”
Last week, 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 head of pensions development Mike Morrison says: “We are confident that the rules in the Pensions Bill will not affect our Family Sipp because they only apply to occupational schemes.”