Unfortunately, even if advisers wanted to obey this Treasury edict, they may not be able to.
First, as Standard Life is arguing, IFAs advising company schemes could be placing trustees at risk of breaching legislation outlawing discrimination on religious grounds.
The ASP is designed to give the Plymouth Brethren a way to receive their pension without buying an annuity. But in denying other non-Brethren members of a scheme they may be discriminating against them on religious grounds and could be in danger of breaking the law.
Now, Aifa has waded into the debate. It is telling IFAs that they must advise clients of all of the options, including Asps, regardless of their beliefs.
Aifa is saying that it does not matter what the Treasury thinks about how legislation and regulations should be used – what matters is that IFAs follow what the law and the regulations say.
In this case, IFAs must make their clients aware of Asps and their potential benefits, inheritance tax and all.
So it would appear that the industry and the Treasury are on a collision course.
The industry says it has to apply the law as the law stands, no matter what the intention of those who wrote the legislation was or is. The Treasury – blaming the industry – may axe Asps because it believes they have been abused.
Wouldn’t it be better if someone did some calculations into the actual impact of Asps being used widely on Government revenues.
If this is, as some suggest, a tax-neutral or even tax- beneficial situation, then the Government could adjust its position without having to make another dreaded U-turn. Then the pension industry could get on with giving proper pension advice.