A family pension trust is a private pension scheme, independently established as a discretionary trust for the benefit of its members.
The family pension trust gives members access to personal pension principles with small self-administered scheme functionality.
Each scheme will be established as a separate trust by Cater Allen Pensions, as provider and will be registered with HMRC. Members have separate arrangements within the scheme and have full control of their own pension investments. The scheme also allows pooled funds within the trust and anyone in any employment status can be a member.
The flexibility of the trust means that members can join together to make specific investments, such as property. This is done through one or more common investment funds established within the scheme. There is no limit to the number of common investment funds which can be set up and not all members have to participate in these funds.
Investments allowed in the trust include commercial property, land, loans to unconnected third parties, unquoted shares, quoted equities on the LSE, quoted equities on recognised worldwide stock exchanges, Gilts, bond and Fixed Interest Stocks, investment trusts, unit trust and OEICs, insurance company managed and with profits pension funds, bank and building society deposits, heavy plant and machinery, offshore managed funds, futures and options, copyrights and gold bullion.
At retirement the member can have the same options as a SSAS, including a scheme pension, where the fund remains under the control of the of the Trustees and is used to provide a guaranteed pension. This is almost like purchasing an annuity but the member’s fund is not lost to the insurance company on death.
The Family Pension Trust is suitable for people who are not employed, self-employed, in a partnership, employed or retired and unlike a SSAS, minors may also be members.
Rowanmoor Pensions managing director Ian Hammond says: “We have sought to provide clients and advisers with an offering that provides the flexibility and functionality that we believe is not currently available in the pensions market. We offer the full range of investment and retirement options allowable under legislation. The product provides the best features of both SIPP and SSAS ”