Dáil Éireann Debate, Tuesday - 26 January 2016
141. Deputy Terence Flanagan asked the Minister for Finance the number of small self-administered pension arrangements (details supplied) in existence; and if he will make a statement on the matter. [3070/16]
Amharc ar fhreagraA pension scheme is generally regarded as a Small Self Administered Scheme (SSAPS) where it has less than 12 members and its fund is not fully administered and insured by a life office. Irrespective of the number of members involved, a scheme will also be regarded as small at any time when 65% or more of the value of the investments of the scheme relate to the provision of benefits for "20% directors" of the sponsoring employer(s) and their spouses, civil partners and dependants. A "20% director" is someone who, directly or indirectly, at any time in the preceding 3 years owned or controlled more than 20% of the voting rights in the employer company or in the parent company of the employer company.
In order for the SSAPS to be an exempt approved scheme it must appoint a Revenue approved Pensioner Trustee who has to give certain undertakings to Revenue in the prescribed form. These include a commitment not to consent to any action which is contrary to Revenue regulations; to supply annual accounts, periodic actuarial reports and any other information required by Revenue; and not agree to the termination of any scheme of which they are a Pensioner Trustee otherwise than in accordance with the terms of the approved winding up provisions.
In relation to the investment in property by a SSAPS, once the proposals meet certain conditions imposed by Revenue an investment of this nature is allowed. The Pensioner Trustees are fully aware of the conditions and these include the following:
- The vendor is at arm's length from the scheme and the employer including its directors and associated companies,
- The purpose of the acquisition is not for disposal or letting to the employer, including its directors and associated companies,
- Disposal of the property is on an arm's length basis,
- The scheme has sufficient liquid investments to ensure that the requirement to provide benefits, including ill-health and early retirement benefits can be met,
- Purchase of overseas property will only be permitted where there are appropriate arrangements in place to enable the Pensioner Trustee to maintain control of the asset to ensure that Revenue rules are complied with,
- A transaction which involves the scheme trustees directly in the acquisition and development of property with a view to its disposal will mean this investment will not constitute an investment exempt from taxation granted under the provisions of section 774 (2), Taxes Consolidation Act, 1997. In addition to these rules, there are also rules regarding self investment, which is the investment by the scheme in its sponsoring employer. In the case of a SSAPS the acquisition of property or other fixed assets from an employer is not allowed. Revenue does not hold specific information as to how many of these SSAPS have invested in property, however, once the conditions outlined above have been fulfilled the SSAPS can invest in commercial property. To date there are a total of 13,758 approved Small Self Administered Pension Schemes in existence.
