Skandia has rejected claims that it plans to leave the market for small self-administered schemes after telling clients its SSAS will no longer benefit from small scheme exemptions.
The company says provisions in the Pensions Act 2004 have changed the definition of a small scheme. This means it has to appoint an independent auditor for schemes with more than one member, who will audit the scheme annually and provide an auditor’s statement within seven months of the end of the scheme year.
Ernst & Young has already been appointed and will levy an annual charge of £1,750.
Skandia also indicates in its letter to clients that it may raise its charges after pointing out that current charging levels have not been changed for a number of years and are “significantly below comparable market rates”.
Pal Partners business development manager Richard Mattison claims the legislation contains no changes in the definition of small schemes and argues that Skandia is deliberately pricing itself out of the market.
Mattison says: “The changes Skandia is talking about were effected by the Pensions Act 1995, not the Pensions Act 2004. It could be using this legislation as a smokescreen because its actions imply it wants to pull out of the market.”
Skandia pensions marketing manager Nick Bladen says: “We have made no decision on whether to withdraw from the SSAS market. The changes are very much as a result of the 2004 legislation.”