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Life offices warn over SSAS charges

The Inland Revenue&#39s new legislation on small self-administered schemes could force charges to rise and lead to some schemes changing to alternative arrangements, according to life offices.

The new rules increase the responsibilities of pensioneer trustees and consequently life offices&#39 admin costs.

Experts argue this will cause certain schemes which do not fully utilise SSAS features, such as property purchase, to switch to executive pension plan arrangements.

Scottish Life says it has already increased its charges, pre-empting the more onerous burden that the new rules will lay on life offices.

Following the announcement from the Revenue&#39s Pension Schemes Office, Axa Sun Life said it predicted higher costs and would not rule out the possibility of raising charges.

The industry has known since the 1998 Budget that the regulations were to change. Last week, the Revenue unveiled the plans which effectively expand the role of the pensioneer trustee of an SSAS, making them more accountable. It also requires a separate trustee expert to be appointed to oversee the scheme and ensure its compliance.

Axa Sun Life marketing manager Steve Muir says: “We mailed IFAs and managing trustees last week to let them know about the changes. We plan to put in place a review of the costs.

“I would expect the new responsibilities would make some marginal schemes think about converting to EPPs but this will depend on the charges.”

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