Despite the current trend to move away from defined benefit (DB) provision in favour of more flexible defined contribution (DC) arrangements, employers wanting to maximise provision of pension benefits for key employees without breaching the Annual Allowance (AA) and Lifetime Allowance (LTA) limits (see our briefing note here on the AA and LTA limits) may find a DB SSAS suits their needs.
Furthermore, such pension provision is a significantly more tax-efficient way of enhancing remuneration packages compared with additional salary. Traditionally SSASs were set up on a DC basis and there is more information about DC SSASs here.
"The DB SSAS can provide generous benefits - (for example a high accrual rate, higher spouses pensions and even index linked increases to pensions in payment) - and can be flexible from year to year and are at the discretion of the sponsoring employer."
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