Transfer into a SSAS
amarshall
Member, Moderator
Our client has received the following email from L&G regarding the transfer of their pension into a new SSAS which is being used to purchase a commercial property.
Has anyone met obstructions like this before? It seems to me like they are hell bent on not allowing the transfer to go ahead. Every time we meet their conditions, they throw something new into the mix.
"Thank you for your recent correspondence in relation to your request to transfer your benefits from Legal & General to the new SSAS.
As you are aware, owing to a change in pensions legislation aimed at preventing members from falling victims to scams, we must undertake certain due diligence to assess whether a transfer request can proceed.
We are required by law to check whether the proposed transfer meets one of two new statutory conditions.
The first condition is that the receiving scheme is a “low risk scheme” (i.e. a public service scheme, an authorised master trust or an authorised collective defined contribution pension scheme). Your request does not fall within this condition.
If the first condition is not met, we must consider your transfer request against the second condition. This involves considering whether certain red and amber flags as set out in legislation are present in respect of your requested transfer. The presence of these red and amber flags indicate a heightened risk of a pension scam.
Your transfer request did not meet the first condition, so we have assessed it against the second condition.
Following our due diligence checks, we have concluded that your transfer request raises amber flags. We have reviewed all documents and would like to draw to your attention the following concerns that we have:
• Investments – You have advised that the transferred funds will be invested in Commercial Property. These investments are unregulated and are considered high-risk investments, and as such raises an Amber Flag as laid out in the regulations.
We are unable to confirm your scheme is a low risk transfer under conditions 1 and 2 of the transfer regulations, as such you will need to contact Money and Pensions Advice Service to book a consultation.
By law, this means that your transfer cannot go ahead unless you attend a free Pension Safeguarding Guidance appointment from the government-backed organisation, MoneyHelper. As such you will need to contact MoneyHelper to book a consultation.
How advice from MoneyHelper differs from advice provided by an independent financial advisor
We recognise that you may have already obtained independent financial advice in respect of your transfer. Please note that the requirement to attend a Pension Safeguarding Guidance appointment with MoneyHelper is a separate, distinct, and additional requirement.
MoneyHelper is set up to give free, impartial guidance with the intention of helping individuals understand the risk of being scammed and avoiding making a transfer that leads to them losing some or all of their pension savings. This is different to the role of a financial adviser.
Next steps
If you wish to proceed with the transfer following your appointment with MoneyHelper, I have included a member declaration which you will need to complete with a wet (handwritten) signature and return along with the email you will receive from MoneyHelper once you have completed your consultation with them.
Once we have received the MaPS Declaration and MoneyHelper email from you we can proceed with the transfer. The Declaration serves as written confirmation that you are aware of our concerns and wish to proceed and the MoneyHelper email is evidence that the regulatory process has been followed and all steps are complete. We cannot proceed without both of these.
Contact Information:
Website: https://www.moneyhelper.org.uk/pension-safeguarding
You can also book by calling 0800 015 4906 free or, if you’re overseas, by calling +4420 7932 5780
We cannot proceed with the transfer without evidence that you have contacted the Money and Pensions Advice Service.
If you are consolidating more than one pension, you may wish to wait until you have requested all transfers before booking your appointment. This will avoid you being asked to attend more than one safeguarding appointment.
We recommend that you seek advice from a financial adviser, authorised by the Financial Conduct Authority, with a view to transferring to a different arrangement. If you do not currently have a financial adviser you may find one at www.unbiased.co.uk.
If a scheme provides you with a lump sum or payment, other than to provide retirement benefits, then you will incur a tax liability of up to 55% on any payments that you receive. This is also the case if the scheme invests in assets that are not deemed to be permitted pension investments.
If you need more information or have any questions please contact us. For more details about Workplace Pensions please visit: www.legalandgeneral.com/workplacebenefits.
Comments
Yes, ReAssure issued broadly the same letter when we were trying to to transfer a PP into an existing SSAS. There wasn't even an intention to invest in property but we disclosed the SSAS held property. Weirdly SJP did not ask the client to attend a MoneyHelper call.
As an aside, we also had similar when a niche DFM played the same trick when transferring out of their white labelled SIPP, in specie, into an AJ Bell RIA! It's almost as if they knew the would be a six week wait to get a call and they would have to charge fees throughout the period...
You cynic!
Hi Andy.
Transfer to SSAS is auto amber flag in the (not so new anymore) regs. No ability to shortcut requirement to proceed to Moneyhelper call, which itself is then a box tick for the ceding scheme. Just give them the appointment reference number and you're good. For most providers they are just as annoyed with the rigidity of the situation, because it means having to deal with the inevitable frustration it causes everyone.
As an aside, did you see the recently closed DWP consultation on introducing a minimum £10k annual levy on SSAS? https://www.gov.uk/government/consultations/the-occupational-and-personal-pension-schemes-general-levy-regulations-review-2023
Hi Ben,
Yes, we'd seen that and I have to admit to having mixed feelings about it. My initial reaction was that its absurd (although I understand why they have suggest it) but I think several of our schemes will just wear it because they are sufficiently large for it to be without significant impact and the others, I'd rather weren't SSASs anyway.
With regard to the Moneyhelper thing, we did get round it with one of ceding schemes. Perhaps they should remain nameless!