SSAS Repair Shop branches out: Does my SSAS need an MOT?

Small Self-Administered Pension Scheme (SSAS) arrangements have not needed to have a professional trustee since the pensions tax reforms of April 2006. Not all of them have guidance from accountants or financial advisers either.

In some cases, SSASs have not been thoroughly checked for over 20 years, and that can bring with it a variety of issues. It can be a bit like an old classic car you've acquired, but left gathering dust in the garage. It looks okay from 20 yards or so, but get closer – or if you’re really brave, open the bonnet - and you realise that a lot needs doing to make it work as it should.

Fortunately for all concerned, this article isn’t about servicing a brake master cylinder. But it is worth raising the point that, like most things, there are some good things to look at that might help trustees and advisers. 

It is far better to address any potential issues before they become an emergency. Where you do find something that needs attention, in most cases SSAS clients can he helped with tricky problems in order to set their pension scheme on the right footing and preserve the tax-privileged funds for future generations. This article gives an idea of the areas you might want to look over.  

How old is the trust deed? 

The older the governing documents are, the more likely that they have not kept up with changes in the legislation. It is better to have a deed which accommodates the up-to-date rules. This is true even though some of the current options are available without updating the deed. The point is that if there were a conflict between the deed wording and some action the trustees are taking, that could breed time-consuming disputes, even if the Trustees might well be doing the right thing. 

Modern trust deeds are also more likely to suitably handle issues when a member trustee loses capacity to act as a trustee, which could otherwise introduce a barrier to investment transactions (see below).

Is the property documentation up to date? 

If the scheme owns property, then it is important to make sure the leases are up to date and rent reviews are being done, especially if the occupant is connected to the pension scheme in any way, such as your company or a related enterprise. 

If there is a tenant with a held-over lease, or a rent review has not been carried out, these can be danger signs. The documentation may not take account of the latest legislation and legal practice, and the scheme might not be as well protected as it might be. 

Another point to ponder is whether independent professional valuations have been taken to back up leases between the pension scheme and connected parties. If they have not been done, there can be unintended tax exposure. 

How up to date are your returns to HMRC?

Almost all SSASs have had to submit a registered pension scheme return to HMRC every year, except 2019-2020. If yours has not, or if you don’t know, there is a chance that this needs bringing up to date. HMRC may raise a £100 penalty plus £60 per day where the returns are submitted late.

Also, if there are members who have retired with sizable benefits, or who did so with a form of protection against the Lifetime Allowance (which was abolished from April 2024), then another sort of report called the Event Report may well have been needed. 

A tell-tale sign to look at might be if the trustees do not easily know who the scheme administrator is; that is, the person or entity responsible for making the returns to HMRC. All scheme administrators are required to migrate to HMRC’s Managing Pension Schemes service, and any registered pension scheme returns due after 5 April 2025 will need to include more granular information on scheme investments and member transactions than those previously.

Are all members trustees capable of acting?

If a scheme does not have all its members acting as trustees, or if a member trustee is not capable of fulfilling the role, there can be significant additional action and documentation needed to comply with legislation, and action may be needed in connection with the assets held by the scheme if they are related to an employer. 

Examples of investments causing concern would be loans to employers, shares in companies which participate in the pension scheme, or property let to employers. 

This is an area where there is increasing concern as the population ages.

Are members receiving mandatory information?

Scheme administrators are obliged to provide some information to members in various circumstances. These include statements where contributions exceed certain levels, and/or reminders of members’ lump sum allowance usage. A review can clear up whether any remedial work might be needed.

More information 

For more information about this topic, please contact your usual Barnett Waddingham consultant. Or you can get in touch with me below.

Please bear in mind that the SSAS team do not provide regulated financial advice. So while we can help with the review and any repair work, we cannot provide guidance on what might be the most suitable investments, or course of action regarding benefits, for individuals.